With COP29 behind us, the search for optimism following this year’s agreement text has been a challenge. Yet, amidst the debates over missed transformative wins, one breakthrough in climate finance could redefine global climate action in the years to come.

I am referring to carbon credits and a global market for carbon trading. These are not new ideas; yet, their significance has only grown year by year. Now, after a decade of negotiations, Article 6 of the Paris Agreement has finally been established, more specifically the Paris Agreement Crediting Mechanism (PACM). This breakthrough sets the stage for a global system of carbon trading – one that promises real, measurable emissions reductions.

Here’s why this is good news:

By enabling countries to trade carbon credits across borders, Article 6 can unlock funding for renewable energy, reforestation and climate adaptation projects. It is a mechanism that supports developing countries while giving wealthier nations a practical path to meet their targets.

Strong safeguards against double counting and new transparency measures will make carbon credits more reliable. This could encourage governments and businesses to set more ambitious climate goals ahead of COP30, knowing they have dependable tools to meet them.

As global climate discussions shift toward COP30 in Brazil, Denmark, together with the EU, is doubling down on its leadership for ambitious climate action. As Lars Aagaard, Denmark’s Minister for Climate, Energy, and Utilities, puts it: “We will strive to improve the outcome in the further negotiations next year, to lay the groundwork for the real progress needed at COP30 in Brazil, where Denmark, together with the European Commission, will lead the EU.”

Here at State of Green, we see partnerships as the way forward. That is why we are proud to have joined forces with the World Business Council for Sustainable Development (WBCSD) through a new collaborative agreement signed at the Denmark Pavilion during COP29. Together, we’re aiming to expand Denmark’s approach to public-private collaboration globally in the lead-up to COP30.

The writer is with the Communications Division at State of Green, Denmark. He may be contacted at info@stateofgreen.com.