COP29 in Baku, Azerbaijan, was labeled “the Finance COP”—a summit where the intersection of climate action and global finance took center stage. For me, the week revolved around one critical question: Would Articles 6.2 and 6.4 of the Paris Agreement finally move forward after years of complex negotiations?
I received the first piece of exciting news while on a layover at the Istanbul Airport: Articles 6.2 and 6.4 were confirmed as core agenda items for the week. The possibility of these articles advancing filled the halls of the Baku Convention Center with a sense of urgency and anticipation. Over the next several days, I had the unique privilege of observing negotiations, participating in side events, and witnessing the often polarized discussions shaping the future of global carbon markets.
Diverging Visions for Carbon Markets
Inside negotiation rooms, the mood fluctuated between cautious optimism and intense debate. In side-rooms, the potential of Articles 6.2 and 6.4 to fund avoidance-based offsets like deforestation and cookstoves sparked rounds of applause, while suggestions to include engineered removals elicited boos. This dichotomy laid bare the tension within the climate community: Is the role of carbon markets to advance broader Sustainable Development Goals (SDGs) like community development, or should they focus exclusively on climate mitigation through measurable emissions reductions?
Discussions on carbon removals painted a different picture, one of industry leaders strategizing how to bring buyers and regulators to the table to help scale expensive removal projects. While removals are included in 6.2 and 6.4. Many expressed concerns about capacity for project approval under Article 6.4’s centralized UN oversight. The technical methodologies for these projects will undergo review starting mid-2025, with the first credits expected to hit the market within two to three years. This timeline reflects both the opportunity and the uncertainty that continue to shape the future of the carbon market.
Hope and Hesitation on the Road Ahead
COP29 showed me the full spectrum of hopes, concerns, and power dynamics embedded in international climate finance. From pavilions hosting lively public debates to formal negotiating rooms closed to all but key government officials, every conversation reinforced that climate finance, especially through carbon markets, must strike a delicate balance between scalability and environmental integrity.
It is important to note that carbon market finance as part of the New Collective Quantified Goal (NCQG) remains a contentious issue. Many countries emphasized the need for equitable climate financing that accounts for their disproportionate burden from the consequences of climate change. The conversations underscored that while carbon markets can drive investment, they must be coupled with fair and transparent mechanisms recognizing historical emissions responsibilities and supporting the most vulnerable nations.
Despite the differing views, one truth stood out: many actors, whether governments, nonprofits, or private sector leaders, see carbon finance as a powerful tool for advancing climate goals. The challenge ahead will be ensuring that these mechanisms support real emissions reductions while navigating competing priorities. If this can be achieved, the next three years could define a new era for international carbon markets.
