The UN’s Article 6.4 Supervisory Body, which oversees the Paris Agreement’s carbon market, has adopted a landmark “suppressed demand” standard aimed at extending climate finance to communities without reliable access to basic services such as clean water, sanitation, and energy. Suppressed demand describes situations where low energy or service use results not from lack of need, but from lack of affordability or infrastructure. Under the new standard, projects that address these unmet needs can earn carbon credits—even if emissions rise as access improves—by using baselines that reflect the emissions such communities would generate if their needs were met under normal conditions.
This approach is designed to ensure fairer crediting for development-focused initiatives and to promote cleaner, more sustainable ways of meeting essential human needs in low-income regions. It represents a major step toward making the Paris Agreement Crediting Mechanism more inclusive, recognizing that climate action and social development must advance together. By linking the expansion of basic services with high-integrity carbon crediting, the standard opens the door for more projects that directly improve quality of life while contributing to global climate goals.
Alongside this decision, the Supervisory Body is finalizing work on a non-permanence and reversals standard—intended to address the risk that emission reductions could be undone—which is expected to be adopted in October 2025. The Body also approved its 2026–2027 business and resource allocation plan, identifying the capacity needed to fully operationalize the mechanism and launching targeted fundraising efforts to secure essential infrastructure. Together, these measures strengthen the mechanism’s dual focus on environmental integrity and equitable development.
