A lot was hanging in balance when it came to the recent climate change international conference, COP26 in Glasgow.Chief amongst this was the issue around international cooperation, or carbon markets as we know it. Rules around the trading of emissions reductions under the Paris Agreement were delayed by several years, to the extent that many got so tired that bilateral approaches – as opposed to multilateral – were considered the only way forward if you wanted to buy and sell credits.But the last few weeks, particularly the last few days of the COP, have shown good developments. The international community has agreed on rules around how trading will take place under Article 6 of the Paris Agreement.The decisions are not perfect, but an excellent step forward in terms of forming a global market. Here’s why:Environmental integrityThe guidance has strong provisions around double counting. One of the biggest concerns – first of environmentalists, and then almost everyone else – was that credits generated once could be counted twice.In other words, a credit generated in seller country X should either be counted towards the reduction commitments of that seller country or the commitments of the buyer country, but not both.Also read: At COP26, Has PM Modi Dragged India Onto Path of Decarbonisation Before It’s Ready?The text requires that all assets under the Paris Agreement – called International Traded Mitigation Outcomes – that are authorised for use in another country’s NDC are subject to an adjustment mechanism to ensure that only one party takes credit for these reductions.What this means for countries that wish to engage in ITMO trading is that a mechanism for “adjusting” the netting off needs to be in place. The starting point for this is to have a registry in place and track ITMO trades.Carryover creditsCertified Emissions Reductions – the carbon assets under the Kyoto Protocol that had no “compliance home” off late, and generated in the 2013-2020 period, are now eligible to be recognised under the NDCs of the Paris Agreement.While this may not be the most ambitious outcome, it maintains the flow of finance to developing countries where these projects are located. Some 150-300M tonnes of such credits are available in the market.A market for sequestration benefits, or “removals”, arising from the reversal of land degradation or the maintenance of forest stock is now clearly eligible for compliance under the Paris Agreement. This is a big win for sequestration projects – and particularly helpful given that most such projects have almost no revenue source beyond carbon finance to be made commercially viable.India for example, has at least 100 million hectares of degraded land that could potentially benefit from carbon finance.Funds for adaptationThere has been ongoing disagreement over a tax on certain carbon trades intended to fund adaptation projects in poorer nations. In a compromise, countries agreed to tax 2% of trades that were under the centralised mechanism, and urged others under the Article 6.2 mechanism to voluntarily contribute towards an adaptation fund similar in concept to one under the Kyoto Protocol.Also read: COP26: Glasgow Pact Criticised for Keeping Mum on Who Should Pay and How MuchThe text carries a clear roadmap on the frequency, details, content of report submission and other vital details that relate to international trades under the Paris Agreement. The United Nations Framework Convention on Climate Change has the huge task to ensure consistency, but assuming much of this were to become digital, a global database would ensure that recorded trades, corresponding adjustments, and all information on ITMOs. This step is crucial to maintain transparency.Overall, the text is clear and sets up a new structure for how carbon markets will work under the Paris Agreement. Article 6 has arguably been the most complicated and contentious section of the Paris Agreement, having resulted in many deadlocks in the past years and months. The finalisation of these rules was much needed – especially since carbon pricing is on the rise, countries are enhancing their mitigation ambitious, and the use of offsets will play a critical role to sustain the effort.European carbon futures climbed to a record after the agreement at COP 26 was struck – to a record $76.25 per tonne. The voluntary carbon market is now at $1 billion, set to increase fifteen fold by 2030. While there is much work to be done to ensure that the voluntary carbon market delivers the mitigation outcomes at the scale that is necessary to meet nationally determined contributions, the recent developments at Glasgow confirmed the re-emergence of an international market. This unlocks the potential for serious levels of green finance to reach climate projects in developing countries.It is now up to countries to deliver against the framework.Mahua Acharya is CEO, Convergence Energy Services Ltd (CESL).