COP29 started with a bang last week when delegates approved the Article 6.4 mechanism whereby countries can transfer carbon credits earned from the reduction of greenhouse gas emissions to enable higher emitting economies to achieve their climate goals – also referred to as Nationally Determined Contributions (NDCs).

While the move drew criticism from opponents on the basis of issues including the impact of carbon removal, which is seen by some environmental organizations as questionable, COP29 President Mukhtar Babayev, said: “By matching buyers and sellers efficiently, such markets could reduce the cost of implementing NDCs by 250 billion dollars a year.” Mr Babyev also praised the “spirit of compromise” that made the deal a reality.

Writing for The Carbon Herald, Vasil Vele opined that this UN-issued standard could become “the foundation for standardizing all types of carbon removal that span atmospheric, geological and ocean approaches, as well as utilization.”

In a related story published by Energy News on November 14, Indonesia’s Ministry of Environment announced during the conference that Indonesia and Japan have signed a Mutual Recognition Arrangement (MRA) for bilateral carbon trading. The agreement has been in effect since October 28.

The MRA is the first global model of bilateral collaboration under the framework of Article 6.2 of the Paris Agreement. It aims to align the national carbon credit systems of both countries, including methodologies for calculating emission reductions, monitoring systems, and carbon credit certification.

Under the MRA, Indonesian carbon credits will be recognised as equivalent to Japan’s, provided they adhere to Indonesian environmental standards.  To ensure a smooth transition, Indonesia’s Ministry of Environment, along with the JCM Secretariat, plans to conduct an inventory of existing projects by the end of 2024.

The initiative will include analysing previously generated credits, ongoing projects, and Japan’s future investment plans in Indonesia’s emission reduction projects.

Read the full story here.

Further reading: COP climate talks not fit for purpose and need reform, say climate leaders