Piloting the A6.4 Sustainable Development Tool – Lessons From Early Use

With the Baku decisions on operationalizing Article 6, the Paris Agreement Crediting Mechanism (PACM) has made a decisive step towards implementation. The development is accompanied by the growing policy attention being given by major global economies to international market mechanisms. As of late, the European Union (EU) has announced in its latest 2040 target that it intends to utilize markets to reach its ambitious goals, emphasizing that these must adhere to strict standards. Specifically, the EU has articulated its NDC target for 2035 to include “an adequate contribution of high-quality international credits under Article 6 of the Paris Agreement in a way that is both ambitious and cost-effective” to deliver the 2040 target (EU 2025).

However, the long-term viability and ultimate success of carbon markets hinge on three fundamental principles: environment integrity, robust accounting, and project quality. A critical component of quality is the assurance of Sustainable Development (SD) impacts and adherence to the “do no harm principle”. While the primary objective of carbon market transactions is the mitigation of greenhouse gas emissions, Article 6 explicitly recognizes and mandates that cooperative approaches must promote sustainable development.

As implementation of Article 6 has moved from negotiations to reality, the need to demonstrate genuine and measurable SD impacts beyond the carbon metric becomes paramount – as is the safeguarding against unintended negative impacts of Article 6 activities. Stakeholders, including host countries, investors, and civil society, increasingly demand evidence that carbon projects are truly transformative, avoiding negative environmental and social impacts while positively contributing to local economies and communities. This heightened scrutiny underscores the vital importance of robust and standardized frameworks for assessing and verifying SD impacts aligned with national development priorities.

The Article 6.4 Sustainable Development tool (A6.4 SD tool)1 is the PACM’s instrument to measure, report and verify sustainable development impact and to safeguard against harmful,  unintended consequences due to the project activity. Adopted in October 2024, the SD tool is mandatory for every Art. 6.4 activity; for CDM projects transitioning to Art. 6.4, the final validation and registration under the Article 6.4 mechanism is contingent on successfully applying the A6.4 SD Tool, while initial transition requests had to rely on existing CDM documentation.

This paper analyses lessons learnt from piloting early use of the A6.4 SD tool in different cases. The paper is structured as follows: we first explain the methodology and the pilot use cases, followed by an introduction of the A6.4 SD tool. Chapter 4 analyses the pilot cases with respect to the safeguards and SDGs covered, but mainly regarding the insights gained and the lessons learnt. We then  resent options for improving the tool, looking at different time horizons / steps in the tool development. Chapter 6 discusses conclusions and next steps.

Webinar on lessons from early use

In December 2025 a webinar presented the key findings from the pilots and discussed how the A6.4 SD tool can support a “race to the top” on sustainable development in carbon markets:

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