Article 6 changes coming out of COP27 and the latest document updates in the voluntary carbon market

The latest Sharm El-Sheikh COP decisions under Article 6 of the Paris Agreement provide guidance on the processes required for the international trading and transfer of carbon credits and mitigation outcomes. In addition, ISDA has published its Verified Carbon Credit Transaction Definitions, which represent an important step toward greater standardization in the basic terms for trading in voluntary carbon credits.

The interests of many actors, including countries and private sector companies, are in play. Reed Smith partners Brett Hillis and Jennifer Smokelin shed light on the areas where more regulatory clarity may be required and how to achieve “market” transaction terms.