December, 2021

Our member`s Slaughter and May publication – GLOBAL CARBON MARKETS AFTER COP26: THE PAST, PRESENT, AND FUTURE.

The new rules on Article 6 of the Paris Agreement, agreed at COP26, offer an international governance framework for deploying environmentally effective and transparent carbon markets. These carbon markets could help enable companies, and other private actors, to achieve their net zero targets at lower cost. Article 6 carbon market mechanisms can also generate additional revenues for emissions reduction projects, which might help enhance the commercial viability of those projects.

However, work remains for private actors, industry groups, governments, and regulators to refine, and ratchet up, the Article 6 rules. This work may help to progressively increase the environmental and social integrity, liquidity, and value of international carbon markets. Within this dynamic policy environment, we analyse some key features of the new rules on Article 6, and highlight several factors that companies might wish to consider if they decide to participate as investors, project operators, purchasers, or sellers in these markets.

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