This article was originally published by S&P Global and has been edited for length.
While the 2021 UN Climate Change Conference, or COP26, laid out landmark decisions on Article 6 of the Paris Agreement, market participants remain fraught with confusion on the intricacies around Articles 6.2 and 6.4, the application of corresponding adjustment, and the future of the voluntary carbon market as it stands today.
S&P Global Commodity Insights spoke to key players in the VCM on their expectations ahead of COP27, which will be held at Sharm El Sheikh in Egypt on Nov. 6-18.
One of the big topics for market actors was a more streamlined Article 6.4, which lays down guidelines for the mechanism that is set to succeed the CDM. Carbon market players say they need more clarity on the credits that would qualify under this mechanism, and more standardization on the process for countries to issue corresponding adjustments.
South Pole, one of the largest players in VCM, says much work remains on procedures and tools for Article 6.4 to become operational, particularly in demonstrating the additionality of projects and adopting quantification methodologies.
"This work is critical for project developers to start investing in developing projects under the new mechanism," said Mireia Vilaplana, who heads the Climate Policy, Finance and Carbon Markets unit at South Pole.
Read the full article on S&P Global.
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