LACLIMA has released the policy brief “The Transition from CDM to Article 6.4: Integrity, Asymmetries and the Future of the Carbon Market,” which analyzes one of the major changes in the international architecture of climate policy. The study shows how the replacement of the Clean Development Mechanism (CDM) with the Article 6.4 mechanism redefines carbon markets, expands the role of national governments, and establishes new parameters for environmental integrity.

According to the publication, the change goes beyond a regulatory update: it transforms the relationship between carbon markets, countries' climate goals, the financing of climate action, and the commitments of the Paris Agreement.

“This is a structural transformation. While seeking to correct weaknesses in the previous model, the new mechanism introduces challenges related to governance, regulatory predictability, and the institutional capacity necessary for its implementation,” says Yago Freire, coordinator of Climate Policies and Carbon Markets at LACLIMA and co-author of the report.

The study details the rules for project migration and shows that emission reductions are now directly linked to Nationally Determined Contributions (NDCs). Governments thus assume a central role in authorizing, using, and transferring credits.

The analysis highlights challenges related to environmental integrity, credit quality, and operational predictability. In February 2026, the first credit issued under Article 6.4 had a volume 40% lower than what would be recognized under CDM rules for the same activity, signaling greater methodological rigor.

The report also points to the slow pace of the transition. By May 2026, only 13% of eligible activities had received approval from host countries. China and India, which accounted for about two-thirds of the projects, had not yet granted approvals.

The publication indicates a shift in focus: instead of prioritizing the volume of credits, the new mechanism tends to value the quality, traceability, and credibility of emission reductions. It also presents choices and trade-offs, such as the balance between methodological rigor and continuity of existing projects, and between uniform requirements or those adjusted to the institutional capacity of each country.

Read the policy brief: https://www.laclima.org/publicacoes/a-transi%C3%A7%C3%A3o-do-mdl-ao-artigo-6.4%3A-integridade%2C-assimetrias-eo-futuro-dos-mercados-de-carbono

The second edition of the “Guide to Understanding Carbon Markets and Cooperation Instruments of Article 6 of the Paris Agreement” is also available: https://www.laclima.org/publicacoes/guia-para-entender-os-mercados-de-carbono-e-instrumentos-de-coopera%C3%A7%C3%A3o-do-artigo-6-do-acordo-de-paris