BAKU, Azerbaijan, June 7. Cross-border carbon market flows could exceed $1 trillion per year by 2050 if countries successfully align their climate strategies under Article 6 of the Paris Agreement, according to Gas Exporting Countries Forum (GECF) expert Masoumeh Moradzadeh, Trend reports.
In her expert commentary, Moradzadeh stressed that the operationalization of the Paris Agreement Crediting Mechanism (PACM) is set to significantly accelerate the growth of global carbon markets. By advancing Article 6, PACM allows governments to purchase carbon offsets to meet their climate goals, including Nationally Determined Contributions (NDCs).
“With the forthcoming updates to countries’ NDCs, we expect more specific targets regarding the use of carbon offsets,” said Moradzadeh. “This clarity will guide how each country integrates carbon markets into its broader climate strategy, creating more predictable demand and encouraging international cooperation.”
Moradzadeh noted that increased transparency and guidance on offset use will drive demand for carbon credits, further embedding carbon markets into national and global climate strategies.
However, she cautioned that the success of PACM hinges on the engagement of major economies. “The withdrawal of the United States from the Paris Agreement would deal a significant blow to the global carbon market,” Moradzadeh warned. “As the world’s largest economy and one of the top emitters, the absence of the U.S. would fragment global markets, hinder price convergence, and reduce both demand and liquidity.”
Despite this risk, the potential benefits of effective Article 6 implementation are enormous. According to research from the International Emissions Trading Association (IETA) and the University of Maryland’s Center for Global Sustainability, cooperation through Article 6 could reduce emissions-reduction costs by up to $250 billion annually by 2030.
Looking ahead, if countries align their net-zero targets using Article 6 mechanisms, global carbon market flows could surpass $1 trillion per year by 2050. Over the 2020–2050 period, such cooperation could reduce global mitigation costs by approximately $21 trillion.
“These flows would predominantly benefit developing countries, enabling greater investment in clean technologies and progress toward sustainable development goals,” Moradzadeh said. “Realizing this vision will require sustained political will and the effective scaling up of Article 6 implementation.”
She concluded that PACM holds transformative potential but must be supported by strong global participation to deliver on its promise of climate action through market-based solutions.
