Understanding Article 6 of the Paris Agreement (2025): A Simple Guide to Global Carbon Markets

What if countries could work together to fight climate change and save money doing it? That’s the big idea behind Article 6 of the Paris Agreement. It gives countries the tools to collaborate on their climate goals using both carbon markets and non-market approaches.

Let’s break it down, especially focusing on Articles 6.2 and 6.4, the two sections that deal with international carbon trading.

What Is Article 6?

Article 6 helps countries cooperate to meet their climate targets, known as Nationally Determined Contributions (NDCs). There are three main parts:

• Article 6.2: Countries trade carbon reductions directly with each other.

• Article 6.4: A global carbon market run by the UN.

• Article 6.8: Support that doesn’t involve trading, like sharing technology or funding climate projects.

All three aim to increase ambition, boost climate finance, and make the system fairer, especially for developing countries.

Article 6 Paris Agreement - Article 6.2: Country-to-Country Carbon Trading

Article 6.2 of the Paris Agreement allows countries to collaborate directly by trading emission reductions, known as Internationally Transferred Mitigation Outcomes (ITMOs). This system enables one country to support a climate project in another such as renewable energy or reforestation and then counts the resulting emissions savings toward its own climate goals. 

These cooperative approaches are decentralized, meaning countries can design their own agreements and choose the methodologies they use, provided they follow international transparency and accounting rules.

A well-known example is the agreement between Switzerland and Peru, where Switzerland financed clean energy projects in Peru and, in return, claimed the verified emission reductions to help meet its national targets. Peru benefits from foreign investment, while Switzerland achieves its goals more cost-effectively.

However, these trades must be carefully tracked to avoid double counting—ensuring that only one country claims credit for each tonne of CO₂ reduced.

By mid-2025, nearly 100 bilateral agreements had been signed under this framework, reflecting growing interest in cooperative carbon trading.

Article 6 Paris Agreement - Article 6.4: A UN-Run Global Carbon Market

Article 6.4 creates a central carbon market, a bit like a global stock exchange for carbon credits.

Here’s how it works:

1. A project (like reforestation or renewable energy) applies to be part of the system.

2. If approved, it earns carbon credits for each tonne of CO₂ it removes or avoids.

3. These credits can then be sold to countries or companies looking to reduce their footprint.

Unlike the flexible, country-driven approach of Article 6.2, this system operates under standardized UN rules and uses a centralized registry to make sure transparency and accountability. The goal is to guarantee that each credit represents a real, measurable, and additional reduction in emissions, strengthening trust in the market. The Article 6.4 mechanism is expected to go live by 2025, once the final operational details are in place.

Article 6.8: Working Together Without Trading

Unlike Articles 6.2 and 6.4, Article 6.8 is purely about working together on climate solutions without market transactions. Not every climate solution has to involve money or carbon credits. Article 6.8 focuses on non-market cooperation such as:

• Donating clean tech to other countries

• Providing climate finance

• Sharing policies, training, or data

The idea is to promote mitigation and adaptation through collaboration and support, beyond what markets alone can achieve. It’s about helping each other without expecting something in return. 

6.2 vs. 6.4 Agreement: What's the Difference?

Feature	Article 6.2	Article 6.4
Type	Decentralized	Centralized by UN
Participants	Governments only	Governments + Private Sector
Flexibility	More flexible	More standardized
Oversight	Country-led	UN-supervised
Speed	Faster to implement	More complex, slower to launch
Examples	Switzerland–Peru, Japan–Vietnam	Expected to launch globally by 2025

Case Study: Switzerland and Peru’s Article 6.2 Agreement

In 2020, Switzerland and Peru became pioneers in implementing Article 6.2 by signing a bilateral climate cooperation agreement. Through this deal, Switzerland finances emission-reduction projects in Peru, such as renewable energy or energy efficiency, and in return, it receives internationally recognized carbon credits to help meet its own climate targets. To ensure environmental integrity, both countries agreed on strict rules to verify that the reductions are real and not double-counted.

Switzerland plans to meet up to 12.5% of its 2030 climate target through such international partnerships. This agreement set an important precedent for how cooperative approaches under Article 6.2 can work in practice.

Following its success, Switzerland has since entered into similar agreements with other countries and, in 2022, completed the first official Article 6 carbon credit transfer with Ghana. Countries like Japan, Singapore, and Vietnam are now developing their own bilateral Article 6.2 arrangements, signaling a growing global interest in this collaborative model.

Conclusion

Article 6 of the Paris Agreement is about helping countries work together to fight climate change. It includes:

Article 6.2—where countries can trade emission reductions through agreements

Article 6.4—a UN-run carbon market for projects that reduce emissions

Article 6.8—ways countries can cooperate without trading, like sharing knowledge or funding

The main goal is to make climate action faster, fairer, and more affordable. For example, if one country can reduce emissions more cheaply than another, Article 6 allows them to work together—saving money and cutting more carbon overall.

If used well, these tools could nearly double the world’s climate progress at no extra cost. But strong rules are key. Every carbon credit must be real, measurable, and not counted twice. And importantly, some of the money from these credits will go to help vulnerable countries adapt to climate change.

Final Thought from Carbon Tide

At Carbon Tide, we see Article 6 as a chance to bring integrity, equity, and real impact into carbon markets. We're especially focused on how this can support nature-based solutions and frontline communities. As the rules settle and the system takes shape, we’ll keep watching, learning, and doing our part.

Because fighting climate change is easier when we work together.