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The First Methodology Agreed under the Paris Agreement to Facilitate Internationally Transferable Carbon Credits
2 min 13 sec
Written by
k.alkarimi@tamimi.com
The Paris Agreement is the landmark international climate treaty that was entered into in 2015. Currently, 195 countries are parties to the Paris Agreement.
The primary aim of the Paris Agreement is to combat climate change by limiting global warming to below 2 degrees celsius above pre-industrial levels, and to pursue efforts to limit the increase to 1.5 degrees celsius. To achieve this goal, signatory countries commit to reducing their greenhouse gas emissions and to strengthening these commitments over time.
Signatories to the Paris Agreement are required to align their national climate action plans with carbon markets, integrating those mechanisms into their overall strategies to meet emission targets. The Paris Agreement encourages cooperation among countries to achieve these goals in the most cost effective and efficient ways.
Establishment of carbon markets
One of the key tools to support emission reductions provided for by the Paris Agreement is the establishment of international carbon markets to enable verified reductions in greenhouse gas emissions, known as “carbon credits” to be traded. Trading carbon credits allows parties to meet their climate targets more flexibly, while at the same time encouraging investment in clean and sustainable projects.
The Paris Agreement crediting mechanism
The Supervisory Body of the Paris Agreement has established several key standards to promote transparency and integrity in relation to carbon markets. These include:
- Standards for measuring project impact, including establishing baselines (estimating what emissions would have occurred without the project) and accounting for leakage (unintended increases in emissions elsewhere).
- A reversal standard to ensure that climate benefits from projects that store emissions are not lost over time.
- A standard to support projects in communities lacking basic needs, ensuring that climate actions also contribute to social development.
Article 6.4 of the Paris Agreement provides for the establishment of a crediting mechanism designed to facilitate internationally transferable carbon credits. This mechanism aims to foster higher ambition in emission reductions, promote sustainable development, and ensure environmental integrity and transparency.
Mechanisms which are established under Article 6.4 must have clear rules and standards for how emission reductions are measured, verified, and credited. This is where agreed crediting methodologies come into play. They provide detailed guidance on how to calculate the emission reductions from specific project activities, ensuring that the credits issued are credible and will therefore make a genuine contribution to the achievement of climate goals.
Participation in an Article 6.4 mechanism triggers several obligations.
- Projects must comply with the approved methodologies to receive carbon credits.
- Transparent monitoring, reporting, and verification systems must be put in place to demonstrate emission reductions and guard against double counting.
- National climate action plans must be aligned with carbon markets, integrating the mechanisms into their overall strategies to meet emission targets.
Written by
·The Paris Agreement’s Article 6.4 mechanism is reshaping the global carbon market by ensuring that emission reductions are credible, transparent, and aligned with international climate goals.
The first Paris Agreement-aligned methodology: Managing methane emissions from landfill sites
Methane is one of the most potent greenhouse gases, with a much higher global warming potential than carbon dioxide over a short period. Landfills are a major source of methane emissions, due to the decomposition of organic waste.
In a significant development announced in October 2025, the UN body responsible for overseeing the Paris Agreement agreed its first methodology focusing on the management of methane emissions from landfill sites (Methane Emissions Methodology). The new methodology sets out how to calculate reductions in methane emissions achieved by projects that capture and either burn off methane (flaring) or use it to generate energy.
The Methane Emissions Methodology is the world’s first approved methodology aligned explicitly with the Article 6.4 mechanism. Being Paris Agreement-aligned indicates that the methodology incorporates the Agreement’s goals and ensures that emission reductions which are credited are consistent with the goal of limiting global warming.
The Methane Emissions Methodology rewards more sustainable practices, encourages innovation, and prevents locking in less effective solutions.
The methodology applies a concept known as “downward adjustment”, which gradually reduces the crediting levels over time and which varies by the type of methane management. For example, projects that flare methane will see their crediting levels decline faster than those using methane for energy production.
The methodology includes an investment analysis tool requiring project developers to demonstrate “additionality”. Additionality means showing that the project would not be financially viable without the revenue from carbon credits. This ensures that credits are only issued for emission reductions beyond what would have otherwise happened, maintaining the integrity of the carbon market.
Conclusion
The Paris Agreement Crediting Mechanism will play a vital role in ensuring that emission reductions are genuine, verifiable, and aligned with the shared ambition of all parties to the Paris Agreement to limit global warming.
The adoption of the Methane Emissions Methodology is a significant milestone. It serves as an important tool to achieve reduction in emissions of a key greenhouse gas. It also sets a precedent for further methodologies to be developed to foster the development of internationally credible carbon markets and action plans which are both affordable and sustainable.
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