COP29 deal unlocks global carbon markets, boosts climate finance

A landmark agreement reached at the 2024 UN Climate Change
Conference (COP29) in Baku could significantly boost international
carbon trading and drive critical investment into low-income
countries, Azernews reports, citing the World
Bank.

The deal finalizes long-awaited rules for cross-border carbon
trading under Article 6 of the Paris Agreement, resolving years of
deadlock that had stalled progress on one of the agreement’s most
complex elements. With the framework now in place, attention is
shifting toward implementation — including the creation of national
regulatory systems, robust carbon registries, and transparent
tracking mechanisms.

“The agreement brings much-needed clarity to the rules governing
international carbon markets,” the World Bank noted. “The next step
is for countries to build the institutional and market
infrastructure needed to make these mechanisms operational.”

World Bank analysts underscore that the formalization of Article
6 opens up new opportunities for countries to collaborate on
emissions reductions, at a time when voluntary carbon markets have
faced increasing scrutiny over their transparency and environmental
integrity.

In November 2024, the COP29 Presidency announced the conclusion
of negotiations that had stretched on for years, describing the
outcome as a “major diplomatic success.” The resolution of the
final, contentious elements of Article 6 marks a key achievement
for the Azerbaijani-led COP Presidency, which had made the issue a
top priority.

Article 6 allows countries to cooperate in meeting their climate
targets through carbon trading and other collaborative efforts,
potentially slashing the cost of implementing national climate
plans (NDCs) by as much as $250 billion annually, according to the
World Bank.

Experts say the newly agreed framework not only brings greater
integrity to international carbon markets but also positions them
as a powerful tool for accelerating global climate finance,
especially for countries most in need of support.

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