Climate change has become one of the most active areas of law in the world right now, as we are facing several consequences with the damage caused to the ecosystem. Courts, regulators, and international negotiators are all focusing on: how do we actually make the people and institutions responsible for emissions change their behaviour, and who pays for the damage already done? This blog looks at two of the tools revolving around that question today, carbon markets, which basically puts a price on emissions, and climate litigation, which is aiming on courts to step in where legislatures have not.
Carbon Markets: Progress in theory, lack in Practice
At the international level, the legal foundation for carbon markets is Article 6 of the Paris Agreement.[1] Article 6 lets countries cooperate with one another to meet their climate targets, instead of acting entirely on their own within their own countries. Two crucial mechanism here are the Article 6.2 allows countries to trade what are called “internationally transferred mitigation outcomes,” essentially carbon credits, through bilateral deals.[2] Article 6.4 creates a new, UN-supervised carbon market open to both countries and private companies, which is called the Paris Agreement Crediting Mechanism.[3]
For almost nine years after the Paris Agreement was signed, the detailed rules under Article 6 stayed unfinished and were far from being implemented, mainly due to the countries disagreeing on how strict the accounting and verification standards should be.[4] That changed at the COP29 in Baku in November, 2024, when negotiators finally reached an agreement to make both the Article 6.2 and Article 6.4 operational. COP29’s lead negotiator claimed the mechanism could help save up to $250 billion a year in the cost of implementing climate plans once it is fully running.[5]
But the Baku deal has not settled the debate. Civil society groups such as Carbon Market Watch argue that the rules on transparency and quality were not implement in the proper manner, and that countries facing issues under Article 6.2 deals face no real consequences for non-compliance.[6] Other observers raises a concern that a fast-growing global carbon market could end up harming the communities in the South, who may host offset projects without meaningfully benefiting from them.[7] The underlying problems with carbon markets has not really changed since the Kyoto Protocol’s Clean Development Mechanism which is where a credit is only as beneficial as long as the systems are verifying it, and once trust in that system slips or breaks, the markets are usually the first place where bad incentives show up.
Climate Litigation: Courts fixing the loopholes
While negotiators argue over market design, courts around the world have become an increasingly important way of resolving the climate issues. Two judgments from 2024 portray this well.
In April 2024, the Grand Chamber of the European Court of Human Rights delivered its judgment in Verein KlimaSeniorinnen Schweiz and Others v. Switzerland.[8]The case was brought in by an association of more than two thousand elderly Swiss women who argued that Switzerland’s weak climate policy put their health and lives at risk, given their particular vulnerability to heatwaves. The Court found that Switzerland had violated Article 8 of the European Convention on Human Rights, the right to respect for the private and family life, because it had failed to put in place an adequate regulatory framework for dealing with the greenhouse gas emissions, including an appropriate carbon budget. It was the first time an international court had held a state responsible under human rights law for insufficient climate action, and commentators have already flagged it as a basis for the future cases across the Council of Europe system.[9] But still in March 2025, the Committee of Ministers came to know that Switzerland was still not fully complying with the judgment.
India delivered its own landmark climate judgment the same year. In the case of M.K. Ranjitsinh and Others v. Union of India, a three-judge bench led by then Chief Justice D.Y. Chandrachud recognised a distinct constitutional right to be free from the adverse effects of climate change, drawing this right from Articles 14 and 21 of the Constitution, read alongside the Directive Principle under the Article 48A and the fundamental duty in Article 51A(g).[10] Furthermore, this case began as a petition to protect the Great Indian Bustard, a critically endangered bird threatened by power transmission lines connected to solar and wind installations.[11] The Court used the occasion to note that India still has no single, comprehensive climate legislation, even though it has taken on binding international commitments under the Paris Agreement.[12]
Commentators have pointed to an irony in the same judgment which is while recognising a fundamental right against climate change, the Court also allowed an energy project to proceed through habitat needed to protect the very bird species at the centre of the case. This gap between rights-based theory and the real outcomes is common across climate litigation globally, and is one reason some scholars have called India’s judgment a hollow or partial victory rather than a clean one.[13]
Two Tools, One Underlying Problem
Carbon markets and climate litigation are really two different answers to the same underlying problem. The world has climate commitments in theory that are not being followed by enough action on the ground. Litigation tries to solve it by forcing governments and companies to actually follow through on obligations they have already accepted, whether under a constitution, a human rights treaty, or their own domestic statute.
Neither tool works perfectly on its own. Markets work well when the verification is weak, as critics of the COP29 Article 6 deal have pointed out. Courts can declare a right without being able to enforce compliance, as Switzerland’s continued non-compliance with the KlimaSeniorinnen case shows. What both fields have in common, though, is that they are pushing climate change further into the theory of enforceable obligation and further away from the practicality of aspiration and voluntary pledges. That shift, more than any single judgment or negotiated text, may be the most important development in this area of law right now.
[1]Paris Agreement art. 6, Dec. 12, 2015, T.I.A.S.
[2]Osborne Clarke, COP29 Delivers Breakthrough Article 6 Deal for International Carbon Markets (28 Nov. 2024), https://www.osborneclarke.com/insights/cop29-delivers-breakthrough-article-6-deal-international-carbon-markets
[3]ESG Dive, COP29 Negotiators Approve Article 6.4, Establish Standards for Global Carbon Market (Nov. 14, 2024), https://www.esgdive.com/news/cop29-negotiators-approve-article-6-4-establish-global-carbon-market-standards/732980/
[4]Smith School of Enterprise and the Environment, Article 6 in Focus: Outcomes from COP29 (Dec 19th . 2024), https://www.smithschool.ox.ac.uk/news/article-6-focus-outcomes-cop29
[5]COP29 Draft Deal Proposes Wealthy Nations Give $250 Billion in Climate Finance, U.N. News (Nov. 22, 2024) https://news.un.org/en/story/2024/11/1157346
[6]Carbon Market Watch, COP29: Complex Article 6 Rules Pave Way to Unruly Carbon Markets (Nov. 23rd , 2024), https://carbonmarketwatch.org/2024/11/23/cop29-complex-article-6-rules-pave-way-to-unruly-carbon-markets/.
[7]REDD-Monitor, COP29 Approval of Article 6.4 Is “Opening the Floodgates” for a Global Carbon Market (Nov.12th 2024), https://reddmonitor.substack.com/p/cop29-approval-of-article-64-is-opening.
[8]Verein KlimaSeniorinnen Schweiz and Others v. Switzerland, App. No. 53600/20, Eur (Apr. 9th, 2024), https://hudoc.echr.coe.int/eng#{%22itemid%22:[%22001-233206%22]}
[9]Climate Protection Obligations under the European Convention on Human Rights: The KlimaSeniorinnen Judgment, Eur. Const. L. Rev. (Cambridge Core), April 9th 2024, https://www.researchgate.net/publication/394054739_Climate_Protection_Obligations_under_the_European_C onvention_on_Human_Rights_The_KlimaSeniorinnen_Judgment_ECtHR_9_April_2024_No_5360020_Verein
_KlimaSeniorinnen_Schweiz_and_Others_v_Switzerland
[10]M.K. Ranjitsinh v. Union of India, 2024 INSC 280 (India).
[11]Supreme Court Observer, Supreme Court Review 2024: Speaking Green, Acting Grey on Key Environmental Issues (Jan 4th. 2025), https://www.scobserver.in/journal/supreme-court-review-2024-speaking-green-acting-grey-on-key-environmental-issues/
[12]M.K. Ranjitsinh and Others v. Union of India and Others, 2024 INSC 280, (Cambridge Core), https://www.cambridge.org/core/journals/american-journal-of-international-law/article/mk-ranjitsinh-and- others-v-union-of-india-and-others-2024-insc-280/832AB7E45AC56D2363D674381D9A2D0F
[13]Garima Thakur, The Supreme Court’s Climate Constitutionalism Judgment: A Hollow Hope?, Indian Const. L. & Phil. Blog (July 9, 2024), https://indconlawphil.wordpress.com/2024/07/09/the-supreme-courts-climate-constitutionalism-judgment-a-hollow-hope-guest-post/
Author NAVYA SHARMA | Fourth year Law Student at Symbiosis Law School, Nagpur