About

• The Paris Agreement Crediting Mechanism, established under Article 6.4 of the Paris Agreement, facilitates international cooperation in reducing greenhouse gas emissions. 
• This mechanism enables countries to generate and trade carbon credits from verified emission reduction projects, contributing to their Nationally Determined Contributions (NDCs) and supporting sustainable development. 
  • A carbon credit is a tradable permit representing the reduction or removal of carbon emissions, measured in metric tons of carbon dioxide equivalent (tCO₂e), from the atmosphere.

How does it work?

• The carbon crediting mechanism under the Paris Agreement enables countries to enhance climate ambition and implement national action plans more cost-effectively.
• This system allows a company in one country to reduce emissions locally and earn credits, which can then be sold to a company in another country.
• The purchasing company can use these credits to fulfill its emission reduction commitments or support its net-zero targets.

Why in the News?

• The 15th meeting of the Article 6.4 Supervisory Body concluded in Bhutan, marking further progress on the remaining guidance needed to operationalise the Article 6.4 carbon market and finalising its work calendar for the year ahead.
  • The Supervisory Body is a 12-member United Nations body responsible for developing and overseeing guidance to operationalise the global carbon market established under Article 6.4 of the Paris Agreement.