UN carbon market issues first credits under Paris Agreement

Yesterday 08:20

By: Dakir Madiha

UN carbon market issues first credits under Paris Agreement

The United Nations has signed off on the first batch of carbon credits generated under the Paris Agreement’s new carbon market, marking a pivotal test of global efforts to channel finance into climate action while maintaining environmental integrity. The credits come from a clean‑cooking initiative in Myanmar that distributes more efficient wood‑burning stoves, aiming to cut household air pollution and ease pressure on nearby forests. Developed under the Paris Agreement Crediting Mechanism, the project is the first among more than 160 activities to complete the transition from the older Clean Development Mechanism, which is due to close by the end of the year. Myanmar has authorized the credits to count toward national climate pledges, and the UN climate body expects most of the units to be used by South Korea to help meet its own targets, with a portion retained by Myanmar.

Under the Paris‑era rules, the volume of carbon savings recognised for the cookstove activity is significantly lower than it would have been under the previous system, because updated assumptions about how much firewood drives deforestation have sharply reduced the so‑called fraction of non‑renewable biomass. This recalibration has cut the project’s annual credited reductions by around forty percent compared with what it could have claimed under older methodologies, reflecting efforts to tighten baselines and avoid inflated climate benefits. UN officials say starting with a household‑level clean‑cooking effort underscores the mechanism’s potential to deliver both emission cuts and social co‑benefits such as improved indoor air quality.

Even as the first issuance moves ahead, the project is drawing scrutiny from campaigners and analysts who have long warned that carbon markets risk enabling greenwashing if credits fail to reflect real‑world emission cuts. Carbon Market Watch and other experts argue that the methodology used for the Myanmar programme can dramatically overstate climate impacts, pointing to peer‑reviewed research that found some similar cookstove schemes overstated reductions by more than an order of magnitude. The baseline approach at the heart of the project, known as AMS‑II.G, has been rejected by the Integrity Council for the Voluntary Carbon Market for lacking robust safeguards on how fuel savings and stove usage are measured over time. Critics say the decision to rely on a legacy cookstove method for the first Paris Agreement credits sets a troubling precedent for a system that aspires to become the gold standard for international offsets.

The approval is subject to a short appeal period, after which the credits, known as Article 6.4 emission reductions, can be formally issued into the UN‑run registry. A wave of other legacy projects is lining up behind the Myanmar cookstove programme, with more than a thousand activities seeking to migrate from the Clean Development Mechanism into the Paris‑era framework across sectors ranging from renewable energy to waste management. Governments and market participants will now be watching closely to see whether the stricter rules, new registry infrastructure and closer scrutiny from civil society can produce a pipeline of credits that investors and regulators view as trustworthy tools for meeting national climate goals.