Paris Agreement’s Article 6.4 international carbon market mechanism

Why in News?

The world’s first carbon credits issued under the Paris Agreement’s Article 6.4 international carbon market mechanism have come under scrutiny after civil society organizations raised concerns regarding governance, human rights, emissions accounting, and the alleged involvement of institutions linked to Myanmar’s military junta.

Key Developments

• A report released on 11 June 2026 by the Myanmar Policy Institute, Global Forest Coalition, and Plan 1.5 questioned the integrity of a cookstove project in Myanmar.
• The project became the first in the world to issue carbon credits under Article 6.4 of the Paris Agreement in February 2026.
• The initiative distributes energy-efficient cookstoves, which:
  • Reduce household air pollution.
  • Lower fuelwood consumption.
  • Reduce pressure on local forests.
  • Contribute to greenhouse gas emission reductions.
• The project is implemented with authorized participants from the Republic of Korea.

About Article 6.4 of the Paris Agreement

• Article 6.4 establishes the Paris Agreement Crediting Mechanism (PACM), a UN-supervised global carbon market mechanism.
• It aims to replace and improve upon earlier carbon offset systems established under the Kyoto Protocol.
• The mechanism seeks to ensure:
  • Greater environmental integrity.
  • Robust monitoring and verification.
  • Stronger safeguards against double counting of emissions reductions.
  • Sustainable development benefits for host countries.

How the Mechanism Works

• Projects that achieve verifiable greenhouse gas emission reductions can generate carbon credits.
• These credits can be transferred internationally and used by countries or entities to meet climate commitments.
• The mechanism encourages:
  • International cooperation on climate action.
  • Mobilization of climate finance.
  • Cost-effective achievement of emission reduction targets.

Link with Nationally Determined Contributions (NDCs)

• Credits authorized for use by the Republic of Korea can be transferred to Korean entities and utilized under the Korean Emissions Trading System (K-ETS).
• These credits contribute to South Korea’s Nationally Determined Contribution (NDC) under the Paris Agreement.
• The remaining emission reductions are counted toward Myanmar’s NDC, ensuring benefits for the host country as well.

Source: DTE & UN