Delegates at the UN’s COP25 climate change conference in Madrid failed to reach consensus in many areas, including settling on rules for carbon markets and other forms of international cooperation under Article 6 of the Paris Agreement.

The idea behind carbon markets is that the most polluting countries can buy the right to pollute more from countries that have not reached their emissions limits.

Such markets are generally designed for trading in “carbon credits”. A company or country that exceeds certain carbon reduction targets can buy credits from another that does not exceed them.

What was being negotiated in Madrid, with the implementation of Article 6 of the Paris Agreement, was how to regulate existing markets.