Nations have failed to agree on a set of rules for international emission markets beyond 2020 at the COP 25 climate summit in Madrid over the last two weeks.
The US, China, India, Japan and Saudi Arabia were among the countries to have blocked progress, according to the WWF, which said that the talks demonstrated “a complete lack of urgency“.
As well as failing to reach a consensus on carbon market rules under Article 6 of the Paris Agreement, no progress was made on respect for human rights, public participation, or financing loss and damage from climate impacts.
“The lack of commitment to scale up climate action by big emitting countries was too much to overcome,“ said WWF's leader of global climate and energy practice, Manuel Pulgar-Vidal.
“Their position is in stark contrast to science, rising demands from the streets, and the harsh impacts already felt in vulnerable countries.“
The Article 6 rules that govern global carbon markets were a priority at COP 25 as it was the only issue of the Paris rulebook that was not concluded at last year's summit in Katowice.
Disagreements over the integrity of the carbon market through avoiding double counting, keeping outdated efforts out of the Paris Agreement, and implementing social and environmental safeguards, hindered progress.
This is despite studies showing that robust international carbon markets could save $360bn (£270bn) per year by 2030, compared to a scenario in which nations work independently.
The collapse of the Article 6 talks means that individual countries will have to pilot carbon markets set out in the Paris Agreement.
Eyes will now turn to next year's COP 26 summit in Glasgow, where high-emitting nations will come under renewed pressure to conclude carbon market rules.
The negotiations on carbon markets focused on creating loopholes and ways to slice out climate ambition in the current and already inadequate targets, said international climate policy coordinator at CAN Europe, Ulriikka Aarnio.
“Anything that undermines climate ambition and harms communities who are the least responsible for the climate crisis would be a backsliding from the promises made in Paris.“
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