What’s Delaying Article 6 Carbon Trading Progress Post-COP29? | ESG Decoded Podcast #167

May 27, 2025

Peter Zaman, a Climate Finance Lawyer and COP Veteran with over 20 years of experience, delves into the hurdles stalling Article 6 carbon trading. He discusses the complexities of carbon markets post-COP29, including legal ambiguities and the challenges countries face in securing carbon credits. Peter highlights issues surrounding letters of authorization and how national priorities impact progress. The conversation also touches on the evolving role of bilateral frameworks and the tensions between regulatory environments and private sector participation.

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INSIGHT

Article 6.4: Paper-Operational Only

Article 6.4 is fully operational on paper but likely two years away from practical use.
Many procedural steps like project registration and registry setup remain unfinished.

INSIGHT

Cooperative Approach Ambiguity

The cooperative approach in Article 6.2 is legally ambiguous with limited guidance.
Unilateral declarations exist but bilateral or multilateral agreements are more widely accepted.

ANECDOTE

Ghana and Kenya's Contrasting Carbon Strategies

Ghana has bilateral agreements with multiple countries for carbon credit trading.
Kenya currently pursues mostly unilateral approaches without signed bilateral frameworks.

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Article 6 is a section of the Paris Agreement that enables countries to trade emissions reductions to meet their climate goals more cost-effectively.

What’s holding up progress on Article 6? In this episode, host Anna Stablum is joined by Peter Zaman, Climate Finance Lawyer, COP Veteran, and Partner at HFW, to examine the legal and regulatory hurdles facing carbon markets after COP29.

They discuss the operational status of Articles 6.2 and 6.4 of the Paris Agreement, explaining how complex rules, shifting market preferences, and individual country priorities are slowing progress. From the cost of emission abatement to reaching national net-zero targets, this conversation highlights why many nations are proceeding cautiously—and how bilateral frameworks may offer a more secure path forward.

You will also gain insight into the challenges around letters of authorization (LOAs), how host countries are evaluating the real cost of corresponding adjustments, and the uncertainties still facing private sector participation as these markets evolve.

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Episode Resources:

Paris Agreement – Article 6: https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement/article-6 COP29 – UN Climate Change Conference: https://unfccc.int/cop29UNFCCC Template: Letter of Authorization (LOA): https://unfccc.int/sites/default/files/resource/LOA_Template_Article6.2.pdf CORSIA – ICAO Aviation Offset Program: https://www.icao.int/environmental-protection/CORSIA/Pages/default.aspx MIGA – World Bank Political Risk Insurance: https://www.miga.org/

About ESG Decoded

ESG Decoded is a podcast powered by ClimeCo to share updates related to business innovation and sustainability in a clear and actionable manner. Join Emma Cox, Erika Schiller, and Anna Stablum for thoughtful, nuanced conversations with industry leaders and subject matter experts that explore the complexities about the risks and opportunities connected to (E)nvironmental, (S)ocial and (G)overnance. We like to say that “ESG is everything that’s not on your balance sheet.” This leaves room for misunderstanding and oversimplification – two things that we’ll bust on this podcast.

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