Carbon Credits: Article 6 Paris Agreement

I. Definition

Carbon credits under Article 6 of the Paris Agreement are units that represent a measured and verified reduction of greenhouse gas emissions between countries.
One carbon credit usually equals one tonne of CO₂ equivalent avoided or removed.

Article 6 allows countries to cooperate to reach their climate targets (NDCs).
This cooperation can include the transfer of carbon credits from one country to another, under strict accounting rules to avoid double counting.

In simple words: a country that reduces emissions beyond its target can transfer this extra reduction to another country that needs it.

II. Context

The Paris Agreement sets climate targets for each country, called Nationally Determined Contributions (NDCs).
Not all countries can reduce emissions at the same speed or cost.
Article 6 was created to make cooperation possible while keeping environmental integrity.

Article 6 has different mechanisms.
The most known are Article 6.2, which allows bilateral transfers of credits, and Article 6.4, which creates a centralized UN-supervised carbon market.
Both require strong measurement, reporting, and verification (MRV) systems.

A key rule under Article 6 is corresponding adjustment.
When a carbon credit is transferred, the selling country adds emissions back to its balance, and the buying country subtracts them.
This ensures that the same reduction is not counted twice.

III. Why it matters

At Orizscore, we see Article 6 as a major test for the credibility of carbon markets.
Carbon credits only have value if they are real, traceable, and proven.

The risk is not cooperation.
The risk is poor data, weak accounting, and unclear proof.
Without transparency, carbon credits become numbers without meaning.

Article 6 forces a clear question:
Can we follow one tonne of CO₂ from reduction to transfer to final use?
If the answer is not clear, trust disappears.

This is why data reliability, auditability, and clear documentation are strategic.
Strong evidence is the difference between climate action and climate claims.

IV. Related terms

• Paris Agreement
  https://www.orizscore.com/blogs/paris-agreement
• Nationally Determined Contributions (NDCs)
  https://www.orizscore.com/blogs/nationally-determined-contributions-ndcs
• Carbon Credits
  https://www.orizscore.com/blogs/carbon-credits

V. Example

Country A invests in a renewable energy project that reduces emissions beyond its NDC target.
These extra reductions are converted into carbon credits under Article 6.4.

Country B struggles to meet its climate target.
It purchases these credits from Country A.
A corresponding adjustment is applied so the reduction is counted only once.

The result:
Country B meets its target legally,
Country A finances clean projects,
and the climate benefit is clearly measured, documented, and verified.