Getting ready for Art 6 of Paris Agreement ?

Working on a series of agreements to accommodate Art 6 of Paris Agreement so that carbon credits created (1) are endorsed by the governments. This is perhaps the most important issue given that in the last 14 years most were under the radar and local governments were not involved. The biggest take was when Indonesia took a stand by making an order that all projects in Indonesia will need to seek approval ( The implications will be felt by current external proponents verifiers such as GoldStandard and Verra also served as a trusted registry for those volunteer carbon credits (bulk of all carbon credits). I envisaged that local governments would want to have their own process to be taken first similar to the process in Australia where they have

Under Article 6, a host government has the right to decide whether mitigation outcomes achieved within its jurisdiction are authorised for use towards (i) an NDC ( Nationally Determined Contributions) of another country, and/or (ii) ‘international mitigation purposes’, which is generally understood to include use by an airline operator to comply with CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation), the international aviation sector’s offsetting regime.

So why fixed a unbroken process ? Traditional national governments have a role under the CDM process and after that is finished the process is now formalized in this Art 6. It is not a big surprise except for the fact that whenever regulation comes in the process will be costly, less efficient and eventually died a natural death. This can be seen by the popularity of the voluntary carbon market vs the CDM issuances. This is notwithstanding the expenses involved with the voluntary carbon market (say in GoldStandard which is the benchmark averaging close to 40K for registering ( but excluding the costs of external Verifier (

It is no secret that this cost shows the average costs of carbon sold on their markets is double digits while actually paid to the landowners or “guardians” is in single digits. Say

Be that as it may, Art 6 perhaps will be able to assist. The pricing of carbon credits is perhaps the most difficult given different players, projects, and consistency even between themselves. This makes it very difficult for parties to distinguish other than by looking at a project that appeals to them rather than the scientific backing behind the technology to capture or avoid carbon emissions. A simple example, mangroves can take TEN times more carbon as compared to a real forest for the same area. This is because mangroves have a lot of utilities as it sits in the divide between the sea and river, most don’t even know it has a filter usage and mitigates flood. Most see mangroves as a development potential for beach-frontage.  On the other hand, some see forests through a romantic lens and therefore prefer such projects and would be willing to pay more for such carbons (this is also because it is less as it is TEN times less as compared to mangroves). Art 6 will allow the authorities to price what is basically unpriceable.


There is a good paper about Art 6 so please have a read (30+ pages)

The paper above also alluded to the English law position on Carbon Credits in the case of Armstrong v Winnington [2012] EWHC 10, [2013] Ch 156




Leave a Reply