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Analytical paper
Carbon trading: helping or hindering global climate action?
05.11.2025, Climate justice
At the climate conference in Baku a year ago, the international community adopted new rules on the trade of Internationally Transferred Mitigation Outcomes (ITMOs) between countries. Some countries are hoping to attract investments, others are using ITMOs to achieve their nationally determined contributions. Taking the example of Switzerland, Alliance Sud and Fastenaktion question whether Article 6 of the Paris Agreement, which regulates ITMO trading, is really leading to more climate action.
Delia Berner
Expert on international climate policy
A wrong turn or fast track to energy transition: Switzerland is offsetting CO2 emissions cheaply abroad and continuing as before with domestic transport and consumption. © KEYSTONE/Gian Ehrenzeller
Switzerland considers itself a pioneer under the Paris Agreement which, 10 years ago, was widely hailed as a breakthrough in international climate policy. The Swiss Confederation was the quickest to implement Article 6, under which countries may trade in ITMOs in order to achieve their climate goals: the first bilateral agreements have been concluded, first projects approved, and the first ITMOs have been bought. On paper, Switzerland can achieve its climate targets by purchasing ITMOs despite only a negligible decline in Swiss greenhouse gas emissions. In exchange, climate action projects are being implemented in the Global South – e.g., by selling efficient cooking stoves, and promoting e-buses and e-bikes; the resulting emission reductions are then attributed to Switzerland. What does this trade in ITMOs mean for global climate action? Criticism of carbon offset projects is often countered with the assertion that they are expressly contemplated in the Paris Agreement. This is true on the sole condition that, overall, the trade in ITMOs generates more, not less climate action.
The experts from Alliance Sud and Fastenaktion investigated and analysed just how far Switzerland meets this condition as a pioneer of the Article 6 mechanism and unearthed a surprising number of puzzle pieces relevant to answering this question.