By Abbas Nazil
Climate negotiators may have reached preliminary agreement to retire the Clean Development Mechanism (CDM) by the end of 2026, ending one of the earliest UN-run carbon credit systems.
The CDM, established under the 1997 Kyoto Protocol, was designed to direct investments into emission-reduction projects in developing countries, generating certified emission reduction credits, or CERs.
Demand for these credits declined sharply after the Paris Agreement shifted climate responsibilities to nearly all countries, replacing Kyoto’s division between rich and poor nations.
Since that shift, the CDM has remained largely inactive, with millions of outdated credits lingering on registries and ongoing disputes over their future use.
Under the emerging COP30 framework, the Paris Agreement’s Article 6.4 mechanism is set to take over, reflecting international pressure to transition to a modern global carbon market.
Governments and industry groups have argued that the old CDM system is no longer compatible with contemporary climate goals, while NGOs caution that allowing legacy CERs into new markets could undermine credibility and trust.
Draft proposals under discussion include firm deadlines for ending credit issuance and transfers, alongside debates on how to allocate remaining CDM funds.
Negotiators are considering whether leftover resources will support the new Paris-era carbon market or be redirected toward climate adaptation and resilience projects.
If finalized, the decision will mark the closure of a major chapter in UN carbon trading, signaling a shift toward next-generation international credit systems designed to better align with global net-zero targets.
The transition from Kyoto-era mechanisms to Article 6.4 emphasizes the evolving nature of international climate finance and carbon markets, highlighting the need for robust, credible, and transparent tools to achieve emission reductions worldwide.
The move also underscores COP30’s broader efforts to streamline carbon trading frameworks while ensuring environmental integrity and support for climate action in developing nations.
