Article 6 Background
The stated purpose of Paris Agreement Article 6 is to provide opportunities for international cooperation to increase mitigation ambition. When the Paris Agreement was negotiated in 2015, developing countries assumed that Article 6 would unlock different types of climate finance to help them achieve the targets found in their Nationally Determined Contribution (NDC). It includes both ‘market’ and ‘non-market’ mechanisms.
But since the Paris meeting, the focus has been on the creation of rules to govern a global carbon market, and to provide opportunities for ‘internationally traded mitigation obligations’ (ITMOs). Rich countries – or big companies – can finance emissions reductions and gain the carbon credits for those actions.
The reduction in emissions is unfortunately then ‘offset’ by continued emissions from that country or company. The use of carbon offsets under Article 6 market mechanisms undermines its original purpose. Only a small percentage of credits are ‘retired’ – that is, not made available for offsetting.
By contrast, in the Article 6.8 setting, all mitigation benefits are derived by the host country. Plus, 6.8 assures an overall global mitigation benefit – no offsetting. This mechanism also considers mitigation and adaptation together – important for forests and other ecosystems, because biodiversity conservation and carbon storage are connected.
Several recent resources help explain what’s going on with Article 6 in more detail:
The UNFCCC summarized progress made on Article 6 rules after COP26 (2021).
CLARA member Carbon Market Watch developed this FAQ about Article 6’s market mechanisms for COP27.
These 2022 blogs from the World Bank and UNDP show their support for Article 6 carbon market approaches.
CLARA outlines why our members think the Article 6.8 non-market mechanism is better.