As the world gathered in Baku, Azerbaijan, for the 29th United Nations Climate Change Conference (COP29), the weight of unfinished business from previous COPs loomed large and the urgency to address the escalating climate crisis echoed across every discussion. Against the backdrop of intensifying natural disasters and delayed critical decisions at COP 28, the negotiations to chart new pathways for international climate action extended over nearly two weeks.

Despite all challenges and compromises that left some parties unsatisfied, COP29 marked critical progress in the global effort to uphold the Paris Agreement, laying the groundwork for transformative changes in climate finance, carbon markets, and international collaboration.

In this article, we highlighted the 3 key advancements made at COP 29: 

After nine years of protracted negotiations, a historic breakthrough was achieved at COP29 with the finalization of the rules governing international carbon markets under Article 6 of the Paris Agreement. Article 6 provides the framework for international cooperation on carbon markets, allowing countries to collaborate in achieving their Nationally Determined Contributions (NDCs), through mechanisms such as international trade of mitigation outcomes under Article 6.2 and Article 6.4 centralized market. The completion of the Article 6 rulebook delivers long-awaited clarity on reporting requirements, authorization procedures, and registry architecture, enabling countries and private entities to participate in international carbon market mechanisms with greater confidence.

ITMOs (Internationally Transferred Mitigation Outcomes) are credits representing emission reductions achieved in one country but transferred for use in another’s climate targets. At COP29, Parties finally agreed that corresponding adjustments are now mandatory for all ITMOs authorized by the host country, whether for use toward another country’s NDCs or for other international purposes, such as corporate sustainability goals. A centralized UNFCCC system is to monitor all ITMO transactions, seamlessly integrated with national registries to facilitate tracking and reporting across multiple jurisdictions.

A hard-won agreement was reached at COP29 on the key standards and integrity safeguards for implementing carbon reduction and removal projects under the Article 6.4 mechanism (widely referred to as A6.4 ERs). Among the critical rules established were criteria for the avoidance of double counting, robust baseline setting, and mandatory third-party verification of projects. Central to this is the establishment of an Article 6.4 mechanism registry, set to be operational by 2025, which will enable the management of credits.

Supervisory body to the Article 6.4 mechanism (SBM) was officially mandated to oversee the project development, approval, and implementation, ensuring adherence to environmental and social safeguards. To achieve this, the Supervisory Body is tasked to engage independent scientific and technical expertise while also consulting relevant stakeholders, including local communities and Indigenous Peoples.

COP29 delivered clear guidance on the transition of projects and credits from the Clean Development Mechanism (CDM) under the Kyoto Protocol into the Article 6.4 framework, now referred to as the Paris Agreement Crediting Mechanism (PACM). Existing CDM projects that meet the updated criteria can transition into the new system, ensuring their continued contribution to climate goals. However, older credits face strict limitations to prevent an oversupply of legacy units that could undermine the integrity and credibility of the new carbon market.

In a last-minute agreement, developed nations committed to mobilizing $300 billion annually by 2035 to support developing countries in mitigating and adapting to climate change. Known as the New Collective Quantified Goal (NCQG), this commitment represents the largest financial promise ever made in the history of UN climate negotiations. Its significance is amplified by the context in which it was negotiated – amid two ongoing wars, the rise of populism worldwide, and inflationary pressures straining national budgets.

COP29 marked the culmination of a decade-long journey to finalize the foundational frameworks of international carbon markets and global climate cooperation.  Despite the progress, however, challenges remain. Uncertainties persist regarding the implementation of certain mechanisms, and further attention is required to establish robust systems to monitor progress.

As the world moves forward from COP29, the focus must shift from negotiation to implementation. Addressing unresolved issues will be essential to maintaining the integrity of the Paris Agreement and achieving its ambitious climate goals. COP30 in Belem, Brazil, will serve as a critical checkpoint to evaluate progress and ensure that global climate action remains on track.