More on Article 6
In the last blog, we noted one of the outcomes of COP26 was the Article 6 agreement to a set of unified and internationally-controlled standards including provisions to avoid situations where the same emissions reductions are claimed by multiple companies or countries. The focus of the agreement relates to Articles 6.2, 6.4 and 6.8.
Article 6.2 provides for ‘cooperative approaches‘ to be established directly between countries for the purpose of trading Internationally Traded Mitigation Outcomes (ITMOs) between jurisdictions. Countries can cooperate to develop emissions reduction activities in a host country, generating ITMOs that can be transferred to the partner country for use towards their Nationally Determined Contribution (NDC), or to other stakeholders for other international mitigation purposes. The agreement details are at https://unfccc.int/sites/default/files/resource/cma3_auv_12a_PA_6.2.pdf.
An example ITMO project is the commitment by the Australian Government of AUD$104 million to develop an Indo-Pacific Carbon Offsets Scheme, under which it will share technical expertise in carbon accounting with its regional partners, enabling them to meet new Paris Agreement emissions reporting obligations.
Article 6.2 programs must deliver overall mitigation in global emissions, ensuring no net-increase in emissions of participating countries (using appropriate safeguards/limits). Another important requirement is that the activities contribute to Parties’ sustainable development objectives, acknowledging that countries should appropriately respect, promote and consider their respective obligations on human rights, right to health, the rights of indigenous peoples, local communities, migrants, children, persons with disabilities and people in vulnerable situations and the right to development, as well as gender equality, empowerment of women and intergenerational equity.
ITMOs are measured in tonnes CO2-e or in other non-GHG metrics determined by parties that are consistent with their NDCs. Units that can be authorised for use towards an NDC or authorised for use for other international mitigation purposes outside of an NDC.