Article 6.4

Article 6.4 of the Paris Agreement establishes a UN-supervised crediting mechanism for mitigation outcomes, sometimes informally called the "Paris Agreement Crediting Mechanism" (PACM) or the successor to the Kyoto Protocol's Clean Development Mechanism (CDM). It allows public and private entities to develop projects or programs that reduce or remove greenhouse gas emissions, generate certified credits, and have those credits used by Parties toward their Nationally Determined Contributions (NDCs) or by other actors for voluntary or compliance purposes.

The mechanism is overseen by the Article 6.4 Supervisory Body, established under the COP/CMA, which sets methodologies, accredits validators, and registers activities. Unlike Article 6.2 (which governs bilateral cooperative approaches and Internationally Transferred Mitigation Outcomes, or ITMOs), Article 6.4 is centralized and produces standardized units sometimes referred to as A6.4ERs (Article 6.4 Emission Reductions).

Key design features negotiated at COP26 in Glasgow (2021) and refined at subsequent COPs include:

• A share of proceeds levied on issuance to fund the Adaptation Fund and cover administrative costs.
• Overall Mitigation in Global Emissions (OMGE) through mandatory cancellation of a portion of credits.
• Corresponding adjustments when credits are used internationally, to prevent double counting against host-country NDCs.
• A transition pathway for eligible CDM activities and pre-2020 credits, with restrictions on vintages and registration deadlines.

At COP29 in Baku (2024), Parties adopted standards on methodologies and on removal activities developed by the Supervisory Body, operationalizing the mechanism after years of technical deadlock. Implementation issues remain contested, including the integrity of removals accounting, treatment of reversals, human rights safeguards, and how Article 6.4 interacts with voluntary carbon markets and corporate net-zero claims.