Most legacy carbon credits from the Clean Development Mechanism have been kept out of the emerging United Nations carbon market after key host countries did not complete the transition process. The outcome reduces the risk that older, potentially low-integrity credits will overwhelm the new system.
Why the transition matters
The transition was designed to allow eligible projects from the Kyoto-era Clean Development Mechanism to move into the Article 6.4 mechanism created under the Paris Agreement. Critics had warned that transferring large volumes of old credits could weaken prices and allow companies or governments to claim reductions with limited additional climate benefit.
Carbon markets depend on the credibility of the projects behind each credit. A project should represent emissions reductions that would not otherwise have happened, be measured transparently and avoid double counting.
Implications for climate policy
Excluding most older credits may give the new market a stronger starting point, but it does not remove wider concerns about verification, national oversight and the quality of future projects. Regulators will still need to demonstrate that credits correspond to measurable and durable emissions reductions.
The issue also shows how difficult it is to create common rules across countries with different economic priorities and administrative systems. Strong standards will be essential if the market is to attract climate finance without becoming a substitute for direct emissions cuts.
Read more about environmental regulation and public accountability.
