UN Sets Standards for Credible Carbon Crediting Under Paris Agreement

In a major move toward enhancing climate accountability, the United Nations Supervisory Body overseeing the Paris Agreement carbon market framework has adopted essential standards that will shape the future of carbon crediting around the world.

The newly approved rules fall under the Paris Agreement Crediting Mechanism (PACM), which enables countries and private sector actors to collaborate on greenhouse gas reduction projects and generate high-integrity carbon credits aligned with global climate goals.

Key Standards for Climate Crediting

Two foundational standards were endorsed during the May 2025 meeting:

• Baseline Emissions Standard: This sets a methodology for estimating what emissions would have occurred without the project. Crucially, it mandates a minimum 10% reduction below business-as-usual levels and requires a progressive 1% annual downward adjustment. These measures are designed to prevent inflated claims and ensure that credited emissions reductions reflect actual progress toward climate targets.
• Leakage Accounting Standard: This ensures that any unintended increases in emissions elsewhere—caused by the project—are properly accounted for. Particularly for forest conservation initiatives (REDD+), the new rule requires alignment with national climate strategies, reinforcing the reliability and integrity of credited reductions.
  
  
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Reinforcing Integrity and Equity

The Supervisory Body also agreed on additional decisions to strengthen the credibility and fairness of PACM:

• Equitable Benefit Sharing: A formal consultation process will explore how the benefits of credit-generating projects can be fairly distributed with host countries.
• Capacity Building: Efforts are being renewed to support developing countries in building robust carbon market infrastructure, with clearer guidance on roles and responsibilities.
• Cookstove Transition Rules: Existing cookstove projects will now be required to apply updated methodologies to maintain environmental integrity.

Leadership Remarks

“This is a groundbreaking step that aligns carbon crediting with a net-zero pathway,” said Martin Hession, Chair of the Supervisory Body. “We’re enhancing communication with host countries and prioritizing quality and fairness in every aspect of this mechanism.”

Vice Chair Maria AlJishi added, “These standards give developers the clarity they need to begin designing impactful projects. They’re key to operationalizing the mechanism effectively.”

Looking Ahead

With these core standards in place, the PACM is expected to begin accelerating project implementation. However, a temporary funding gap is likely as transitions from the older Clean Development Mechanism slow, and new PACM-based projects begin to scale up in 2026.

The first methodologies under PACM are expected to receive final approval by year-end 2025. The UN Supervisory Body will also continue developing tools, guidelines, and the official PACM Registry to support transparency and accountability in this next phase of climate action.