The standards known as the Paris Agreement Crediting Mechanism (PACM) was agreed on at a recent meeting of the UN body, and is expected to reduce greenhouse gas emissions by generating high-integrity carbon credits that support global efforts to fight climate change. 

It set out how emission-reducing projects will measure their actual climate impact to ensure that credits issued under the mechanism are “ambitious, real, additional, and verifiable” — a crucial principle long demanded by African countries to ensure fairness in the global carbon market pricing system.

This standard estimates the emissions that would have happened without a project under the mechanism.

It measures the true impact of a project by setting its base line lower than usual — at least 10 percent below what is considered business as usual, to avoid giving too much credit for small or exaggerated improvements.

Over time, these baselines must keep getting lower by at least 1 percent to help push projects to keep improving and ensure that the carbon credits they earn are truly helping reduce emissions in a way that supports the bigger goals of the Paris Agreement.

This is a standard that accounts for any unintended increases in emissions that might happen elsewhere as a result of a project.

When a project like planting trees or protecting forests is set up to reduce carbon emissions, it can sometimes unintentionally cause more emissions in another area. For instance if logging is restricted in one forest, people might cut down trees in a nearby, unprotected area instead. This is referred to as leakage.

This standard helps project developers think carefully about where these unintended emissions might happen and include them in their planning.

The rule also stipulates that any forest-protection projects (REDD+ projects) must be part of the country’s overall plan to fight deforestation. This way, everything stays coordinated and trustworthy, and the carbon credits earned from these projects are real and meaningful.

Unlike the earlier Clean Development Mechanism (CDM), which let developed countries earn carbon credits by funding projects in developing nations, the PACM focuses on national ownership and aligning projects with the host country’s climate goals.

This difference is especially important for African countries, which have contributed the least to global emissions but are among the hardest hit by the effects of climate change.

Beyond these two standards, the UN body also agreed to support implementation — which includes a process of consultation on how project benefits can be shared equitably with host countries, and a renewed focus on capacity building to help countries build the systems they need to take part in the mechanism.

This approach supports the broader calls from African negotiators for climate justice, especially in ongoing debates about loss and damage and carbon pricing at COP summits.

It also adopted a decision on the transition of cookstove activities, bringing earlier projects in line with the latest available data and guidance.

Cookstove programmes have been widely adopted across Africa, providing both climate and health benefits by replacing traditional open-fire cooking with cleaner and more efficient alternatives.

However, the shift from the CDM to the PACM has been slower and less widespread than expected.

The supervisory body recognised that the lower-than-expected number of CDM project transitions could lead to a short-term funding gap until new projects start to take shape from 2026 onward.

To help bridge this gap, there will be a stronger focus on building capacity in developing countries. This includes clearly defining the responsibilities of host countries, supporting the development of national registries, and providing technical guidance to local project developers.

Martin Hession, chair of the supervisory body, expressed satisfaction over the outcome of the meeting, describing it as a groundbreaking decision that will ensure the standards for earning carbon credits becomes stricter over time—helping to steadily reduce emissions and move the world closer to net-zero.

Hession noted that the body will support countries that want to earn carbon credits by creating a clear process to help them receive their fair share of the benefits from reducing emissions.

“This was a very significant meeting. We finally adopted a groundbreaking decision ensuring crediting levels are set consistently with a pathway to net neutrality, through a process of minimum downward adjustment of crediting levels over time,” Hession said.

“We are already uniquely placed to support host countries considering crediting, and have decided here to enhance communication with countries, by providing a dedicated channel for them to secure their fair share of mitigation benefits, initiating a dialogue on host country roles and responsibilities, as well as exploring options for enhanced and targeted capacity building.

“We have also moved to ensure the quality of certain transition projects by requesting the application of the most recent applicable data.” 

Maria AlJishi, vice chair of the body, said “We are grateful for the ongoing engagement and feedback from stakeholders throughout this process, and for the methodology panel’s work in helping to draft these standards.

AlJishi added that their feedback provides the clarity developers need to begin designing activities under the PACM and are key to fully operationalising it.