After nearly a decade of negotiations, leaders on the first day of a United Nations climate conference settled on some of the finer points of a hotly contested dispute aimed at reducing planet-warming emissions from coal, oil and gas.

Known as Article 6, it was created as part of the 2015 Paris Agreement to help nations work together to reduce climate-causing pollution. Part of this was a system of carbon credits that would allow countries to release planet-warming gases into the air if they offset emissions elsewhere.

But the implementation of Article 6 late Monday was criticized by climate justice groups, who said carbon markets were allowing big polluters to continue emitting emissions at the expense of people and the environment.

This year’s summit, known as COP29, brought together world leaders to discuss ways to limit and adapt to the climate crisis. Scientists agree that warming of the atmosphere, primarily from human-caused fossil fuels, is fueling deadlier and increasingly destructive droughts, floods, hurricanes and heat.

Here’s a look at Article 6 and the carbon credits system it aims to implement.

What is Article 6?

Article 6 first appeared at the Paris climate talks in 2015; where world leaders agreed to try to keep global warming below 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels.

Its aim is to outline how countries and companies can trade off emissions reductions to prevent and eliminate more carbon pollution from reaching the atmosphere. The idea is to set up carbon trading markets, allowing higher polluters to offset some of the pollution they produce by purchasing carbon credits from less polluting countries.

Article 6 gives countries two ways to do this. First, the two countries set their own rules and standards for carbon credit trading. Some countries are already signing agreements to achieve this, including Singapore and the Philippines, Costa Rica and Sri Lanka, Switzerland and Ghana, Peru and Ukraine.

The second option creates a UN-run international market where anyone can buy credits.

Isa Mulder, an expert on global carbon markets from the research group Carbon Market Watch, said the idea behind Article 6 was for countries to find the cheapest way to reduce emissions. It makes reducing global pollution cheaper and more efficient by trading carbon credits.

However, Article 6 is controversial and has led to years of delays. Negotiations at COP28 collapsed after disagreements over transparency, rules on tradeable credits and what constitutes a good decarbonization credit.

“There are other issues, too, such as local communities not having a say in the project and being forced to resettle,” Mulder said, referring to how some tree-planting carbon credit plans could be made on Indigenous lands. “So there are a lot of human rights concerns.”

United Nations secretary-general Antonio Guterres called on negotiators to “agree on rules for fair, effective carbon markets” and “leave no room for greenwashing or land grabbing.”

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How can it help reduce carbon pollution?

The hope of Article 6 is that it will encourage countries to cooperate to achieve climate goals.

Countries can generate carbon credits based on projects aimed at meeting their climate goals, such as protecting existing forests from development or shutting down coal-fired plants.

Private players or other high-carbon-polluting countries can then purchase the credits, allowing them to emit a certain amount of carbon dioxide or other greenhouse gases. Heavy polluting companies will be important customers.

Each credit will be equal to one tonne of CO2 or the equivalent of other greenhouse gases in the air that could be reduced, sequestered or avoided by using green energies instead.

The money generated from the loans created will go to local projects. The price per tonne of carbon will fluctuate in the market, meaning the higher it rises, the more green projects can be brought in through new credits created.

In carbon markets, countries that reduce their emissions by establishing clean energy projects such as solar or wind energy or by electrifying public transportation systems can sell carbon credits.

But critics question whether it will be effective and worry it could lead to similar problems seen in the Kyoto Protocol, a 1997 agreement that required developed countries to reduce emissions of heat-trapping gases to 1990 levels or below. The agreement suffered a major blow when the then US administration withdrew from the agreement.

“There’s a lot of concern about whether this credit really represents what it represents,” said Mulder of Carbon Market Watch.

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What could happen in the Baku climate talks?

Monday’s decision signaled early momentum on crafting Article 6, which the COP29 presidency has said it will prioritize this year.

But leaders still need to agree on other parts of the issue, including the rules for bi-national carbon credit trading and the final details of the UN-run international market.

According to UN estimates, Article 6, once completed, could reduce the cost of implementing national climate plans by $250 billion annually. The COP29 presidency will then encourage countries to participate in carbon trading.

On Monday, COP29 President Mukhtar Babayev said Article 6 “will be a game-changing tool for directing resources to the developing world.”

But given how it was developed, concerns remain about how it will work.

“Communities’ consent and ownership of these initiatives is not only necessary, it is a matter of respect and participation,” said David Nicholson, chief climate officer at Mercy Corps, a nonprofit organization that works on poverty, climate and other issues.

“We are concerned that the agreement does not provide adequate human rights protections and undermines rather than supports the goals of the Paris Agreement. If these concerns are not addressed, the decision could allow carbon trading to replace real, much-needed climate finance commitments,” added Nicholson.