About This Opportunity
Reflecting Article 6 of the Paris Agreement in NDCs centers on effectively integrating voluntary cooperation mechanisms to enhance climate mitigation efforts, complementing domestic mitigation measures. This involves careful planning and transparent reporting to ensure that international cooperation under Article 6 contributes positively to achieving global climate goals.
Effectively reflecting Article 6 in NDCs requires a balanced, strategic approach that enhances international cooperation while firmly rooting climate actions in national priorities and capabilities. This not only supports global efforts to mitigate climate change but also ensures that such efforts are sustainable, equitable, and aligned with the long-term development goals of participating countries.
The following strategies could help to implement this Opportunity:
Ensuring a clear national approach to Article 6:
Developing a coherent and strategic national framework for engaging with Article 6 instruments is essential. This framework should define how voluntary cooperation will be used to supplement domestic mitigation measures and clarify the role of different Article 6 instruments, including cooperative approaches (6.2), the mechanism (6.4), and non-market approaches (6.8). It is important to ensure that the use of Article 6 instruments aims to enhance overall mitigation and/or adaptation efforts rather than serve as a substitute for domestic climate action. This involves setting appropriate conditions and limits on the use of these instruments to maintain a balance between domestic efforts and international cooperation. By establishing clear limits on the use of voluntary cooperation, countries can ensure that these instruments are used responsibly and effectively. This includes setting standards to prevent issues like double counting of emission reductions and ensuring the additionality and permanence of emission reductions. Ensuring that Article 6 instruments are well-aligned with domestic policies enhances their effectiveness and supports broader national objectives, including economic development and social well-being. The ICAT guide on transparency for Article 6 provides guidance on how to plan Article 6 activities as an integral part of the NDC implementation planning.
Transparency in Article 6 Activities:
Detailed and transparent reporting on how Article 6 instruments are used is necessary for both domestic accountability and international credibility. This includes disclosing the conditions under which voluntary cooperation is employed and the impacts on overall mitigation outcomes. Guidance for Accounting for NDCs with Greenhouse Gas Emissions Targets (GIZ) provides a detailed overview of the different approaches to international cooperation under Article 6. The guidance underscores the importance of robust accounting to prevent double counting, which is vital for the credibility of international carbon markets and achievement of NDC targets using internationally transferred mitigation outcomes (ITMOs). This is reflected in both the operational guidance and historical perspectives, emphasizing the new mandatory nature of NDC accounting for all parties, a significant evolution from previous protocols which applied primarily to developed countries. It also discusses the integration of these instruments for international cooperation with national reporting frameworks under the Enhanced Transparency Framework (ETF), emphasizing the need for seamless integration to facilitate transparent, complete, comparable, consistent and accurate reporting.
Country Examples
Costa Rica has effectively articulated a comprehensive strategy to engage with Article 6 of the Paris Agreement, prioritizing a coherent national framework and transparent reporting mechanisms. The country reserves the right to use international compensation units, which will complement actions within its National Contribution and its newly developed Domestic Compensation Market, the MCCR. Financial strategies include strengthening financial instruments like payments for ecosystem services, implementing a green tax reform by 2030, and developing support mechanisms with the national banking system to facilitate energy transition. These efforts are aligned with the San Jose Principles for high ambition and integrity in international carbon markets, underscoring Costa Rica’s commitment to robust accounting practices. This approach aims to prevent double counting and ensures that voluntary cooperation mechanisms enhance rather than replace domestic climate action, thereby supporting broader national objectives of economic development and environmental sustainability in a transparent and accountable manner. (Source: “NDC Checklist Costa Rica Analysis,” WWF)
Chile is developing a coherent framework for engaging with Article 6 mechanisms, exemplified by the establishment of a public-private dialogue roundtable. This initiative demonstrates Chile’s commitment to defining specific policies for market use while preserving environmental integrity and promoting sustainable development. Chile recognizes the importance of detailed and transparent reporting on the use of Article 6 mechanisms. By creating internal institutions and engaging in participatory climate governance structures, Chile aims to ensure accountability and credibility in its implementation of market-based approaches. Chile’s approach emphasizes robust accounting to prevent issues like double counting of emission reductions. The integration of international mechanisms with national reporting frameworks underscores Chile’s commitment to comprehensive and accurate reporting, aligning with broader national objectives of economic development and social well-being. (Source: “NDC Checklist Chile Analysis,” WWF)
Further Resources
Transparency for cooperative approaches under the Paris Agreement: A guide to navigating the links between Articles 6 and 13 (ICAT, 2023)
This guide aims to support countries exploring opportunities for engaging in activities under Article 6 of the Paris Agreement, and, in particular, understand the related reporting and accounting requirements. Article 6 sets out the basic rules for international carbon markets and non-market approaches. It has strong interlinkages with other elements of the Paris Agreement; in particular Article 13, which defines the contours of the enhanced transparency framework (ETF). Another aim is to provide stakeholders with an understanding of the opportunities and risks linked to participation in Article 6, and the requirements
Guidance for Accounting for NDCs with Greenhouse Gas Emissions Targets (GIZ, 2022)
This document serves as an in-depth instructional resource to help countries, particularly under the framework of the Paris Agreement, to establish robust accounting mechanisms for Nationally Determined Contributions (NDCs) that are in alignment with the Enhanced Transparency Framework (ETF). It provides comprehensive methodologies and examples for tracking and accounting for greenhouse gas emissions, with a significant focus on integrating and improving the transparency of these processes. This guidance is particularly relevant to the opportunity of reflecting Article 6, as it addresses the accounting for cooperative approaches under Article 6 and the use of Internationally Transferred Mitigation Outcomes (ITMOs).
Article 6 explainer questions and answers about the cop27 decisions on carbon markets and what they mean for NDCs, nature, and the voluntary carbon markets (The Nature Conservancy, 2023)
This document offers guidance on what was decided at COP27 on this topic and explores the implications of Article 6 for NDCs, nature and the voluntary carbon market (VCM). Exploring questions such as: Why have countries not yet started trading under Article 6? Is nature included in Article 6? What about REDD+? How does Article 6 impact the Voluntary Carbon Market (VCM)? Will all offsets require a corresponding adjustment? What are the decisions yet to be made around carbon trading?
Article 6 Readiness Toolkit (NDC Partnership, Perspectives Climate Research, 2024)
The Article 6 Readiness Toolkit developed by the NDC Partnership and Perspectives Climate Research is designed for national Article 6 decision-makers and development partners to identify country-specific Article 6 readiness needs and priorities in order to better understand how they can be addressed. The toolkit aims to enable users to define pathways for making strategic decisions about Article 6 engagement; identify existing capacities, resources, as well as requirements for capacity development; and to identify where requests for support are needed. The Toolkit also enables users to identify and better understand the interlinkages between Article 6 objectives and other critical areas of NDC implementation such as Monitoring, Reporting and Verification (MRV) systems.
Promoting Article 6 readiness in NDCs and NDC Implementation Plans (Perspectives Climate Group, 2021)
This document aims to provide guidance on how countries can enhance their readiness for Article 6 of the Paris Agreement. The document focuses on the necessary capacities, systems, and strategies that countries need to develop and implement to engage effectively in these cooperation mechanisms, ensuring environmental integrity and transformational change. It also aims to assist both public and private stakeholders in understanding how to align their Article 6 cooperation initiatives with national NDC targets and Implementation Plans.
How This Links to Other Routes
Some specific linkages to other Routes that are particularly relevant include the following. Navigate to these to read more:
Route: Aligned to the Paris Agreement Temperature Goal
Integrating Article 6 mechanisms into NDCs offers a pathway to strengthen climate mitigation efforts. This involves strategically incorporating international cooperation alongside domestic actions, ensuring additionality, transparency and sustainability.
Additional Opportunities
The following Opportunities are a non-exhaustive set of options for enhancing technically sound and transparent documents.
