COP29 Deal Unlocks Global Carbon Markets, Boosts Climate Finance - World Bank Says

A landmark agreement reached at the 2024 UN Climate Change Conference (COP29) in Baku could significantly boost international carbon trading and drive critical investment into low-income countries, Azernews reports, citing the World Bank.

The deal finalizes long-awaited rules for cross-border carbon trading under Article 6 of the Paris Agreement, resolving years of deadlock that had stalled progress on one of the agreement's most complex elements. With the framework now in place, attention is shifting toward implementation - including the creation of national regulatory systems, robust carbon registries, and transparent tracking mechanisms.

“The agreement brings much-needed clarity to the rules governing international carbon markets,” the World Bank noted.“The next step is for countries to build the institutional and market infrastructure needed to make these mechanisms operational.”

World Bank analysts underscore that the formalization of Article 6 opens up new opportunities for countries to collaborate on emissions reductions, at a time when voluntary carbon markets have faced increasing scrutiny over their transparency and environmental integrity.

In November 2024, the COP29 Presidency announced the conclusion of negotiations that had stretched on for years, describing the outcome as a“major diplomatic success.” The resolution of the final, contentious elements of Article 6 marks a key achievement for the Azerbaijani-led COP Presidency, which had made the issue a top priority.

Article 6 allows countries to cooperate in meeting their climate targets through carbon trading and other collaborative efforts, potentially slashing the cost of implementing national climate plans (NDCs) by as much as $250 billion annually, according to the World Bank.

Experts say the newly agreed framework not only brings greater integrity to international carbon markets but also positions them as a powerful tool for accelerating global climate finance, especially for countries most in need of support.

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