Article 6.4 of the Paris Agreement establishes a new mechanism for Parties to cooperate in achieving their nationally determined contributions (NDCs). One key innovation of the Article 6.4 mechanism is its objective to "deliver an overall mitigation in global emissions" (Art. 6.4(d)). This report develops recommendations on how to implement this objective. A key difficulty lies in the fact that even basics of how the mechanism is supposed to function have so far not been clarified by the Parties. The report therefore first sketches out what has so far been agreed and discussed on the mechanism’s activity cycle. Second, as the concept of overall mitigation has so far also not been clearly defined by Parties, the report derives a working definition from the language that was agreed in the Paris Agreement. In the next step, the report provides a survey of the options to achieve overall mitigation that have so far been discussed in the relevant literature and in the Article 6 negotiations. Many of these options were developed in the context of the Kyoto mechanisms. The report therefore discusses to what extent the options are also applicable under the Paris Agreement or whether adjustments need to be made. In the following, the options that are applicable under the Agreement are assessed on the basis of a number of criteria. The report concludes with a summary of the main findings and recommendations.
Although it is not part of what has been called the "ambition mechanism" or "ratchet mechanism", Article 6 of the Paris Agreement also has an explicit requirement to promote ambition. Article 6 specifically highlights that some Parties choose to pursue voluntary cooperation in the implementation of their nationally determined contributions to allow for higher ambition in their mitigation and adaptation actions. Despite the common purpose, the two elements have to date been discussed mostly in isolation, both in the negotiations as well as in the wider literature. This JIKO Policy Paper sets out to change this by exploring the relationship between Article 6 and the Global Stocktake.
The Paris Agreement adopted in December 2015 provides the basis for future international cooperation on the field of climate change mitigation. While truly global in reach, the agreement will however result in an increasingly complex new climate regime: Instead of using a uniform formula, Parties are allowed to autonomously define their NDCs (nationally determined contributions), resulting in a large diversity of contributions. This poses significant challenges for emissions accounting and the transfer of emission units.
This Policy Paper explores how these challenges can be addressed by analysing different types of NDCs and assessing their compatibility with the export and use of emission units. On that basis, the authors develop opt-in provisions for Parties willing to participate in unit transfers under the new climate regime and illustrate how potential risks to environmental integrity can be addressed.
City-wide programmes of activities : an option for significant emission reductions in cities?
(2012)
More and more companies are announcing their intention to become climate-neutral and numerous companies already offer climate-neutral products or services: From climate-neutral parcel delivery to air travel. But what exactly do the companies' net-zero targets mean? Is the target set ambitious? And what role does offsetting play, i.e., purchasing carbon credits that are accounted against the company's own climate target? The approaches behind the proclaimed targets are often difficult to understand. Against this background, this Zukunftsimpuls provides ten recommendations for the definition and implementation of neutrality targets. Among other things, the authors advocate the use of a robust database as the basis for net-zero targets, emphasize the importance of transparent communication, and highlight the role that offsetting should play. Purchased carbon credits should make as limited a contribution as possible for meeting climate targets and should only be used to offset emissions that cannot be reduced or avoided. More generally, net-zero targets should not be made the sole criterion for ambitious climate strategies. Rather, they are a building block of a much more comprehensive strategy of corporate climate action.
The Clean Development Mechanism (CDM) is in crisis. More and more market participants are leaving the sector. In the light of this development, some argue that governments should step in as buyers of Certified Emission Reductions (CERs). Given the limited volumes of public funding, however, governments will have to prioritise some projects over others. This policy brief therefore analyses national purchase programmes and multilateral carbon funds in order to identify criteria public investors are applying in the selection of the projects they finance. The aim is to identify a vision of a high quality CDM project that be can be made use of when designing a possible support programme.
This Policy Brief outlines the "identity crisis" in which voluntary carbon standards find themselves after the adoption of the Paris Agreement. It describes how the new international legal framework threatens to undermine the legitimation and credibility of voluntary carbon standards and discusses first ideas how the arising challenges could be dealt with.
Article 6.4 of the Paris Agreement explicitly acknowledges the need to incentivize and facilitate the participation of private entities in the mitigation of greenhouse gas emissions. Under the Clean Development Mechanism (CDM), private sector actors had already the opportunity to participate in a new and fast-growing market. However, they faced numerous challenging investment barriers. The study provides an overview on key factors and barriers determining private sector participation in Article 6 mechanisms. It distinguishes between the three topics demand side factors, rules and standards for market mechanisms, and supply side factors and provides for each of them options to mitigate or overcome barriers.
In a short analysis, it further explores three of the identified options:
- Improving the design and support of national systems and capacities is an important pre-requisite for the private sector to be able to generate and sell ITMOs
- The up-scaling of mitigation activities e. g. through (sub-) sector level crediting, and policy crediting helps private sector actors to benefit from economies of scale
- Exploring the potential of digitization of measuring, reporting and verification (MRV), e. g. the use of sensors, internet of things, artificial intelligence and blockchain to make the project cycle more efficient and reduce transaction costs.
Overall, the report stresses the importance of host country readiness to provide the private sector with a robust and trusted environment that allows for the adoption of Article 6 mechanisms.