Article 6 Of The Paris Agreement

• After over a decade of negotiations, the rules under Article 6 of the Paris Agreement governing international carbon trading have been finalized. 
• This marks a major step in enhancing global cooperation for climate action.

What is Article 6?

• Article 6 provides a framework that allows countries to cooperate voluntarily to meet their Nationally Determined Contributions (NDCs) targets them set under the Paris Agreement to reduce greenhouse gas (GHG) emissions.
• This cooperation can happen via carbon markets, which allow for the transfer of emission reductions between countries, or through non-market-based mechanisms aimed at broader climate collaboration.

What is a Carbon Market?

• A carbon market allows entities (countries or companies) to buy carbon credits to offset their greenhouse gas (GHG) emissions.
• 1 carbon credit = 1 metric tonne of CO₂ (or equivalent GHG) reduced, removed, or avoided.
• First introduced under the Kyoto Protocol (1997).

Mechanisms under Article 6

What is Corresponding Adjustment (under 6.2)?

• Adjustments made in a country's emissions inventory to account for the transfer or receipt of ITMOs.
• Applies to:
  • GHG metrics (e.g., national GHG emission limits)
  • Non-GHG metrics (e.g., installed renewable energy capacity)
  • Policies and measures (e.g., energy efficiency programs)

Kyoto Protocol vs. Paris Agreement (Article 6)

Why Article 6 of the Paris Agreement Matters

Facilitates International Climate Cooperation

• Article 6 provides a framework for countries to collaborate in achieving their climate goals (NDCs), enhancing global solidarity in combating climate change.

Mobilizes Finance for Developing Countries

• Through market mechanisms, developing nations can attract investments for climate-resilient and low-carbon development projects, bridging the climate finance gap.

Promotes Transparency and Environmental Integrity

• By requiring corresponding adjustments and robust accounting, Article 6 ensures that emission reductions are real, verifiable, and not double-counted.

Strengthens Global Adaptation Efforts

• A portion of the revenue from carbon market transactions (under Article 6.4) is directed to the Global Adaptation Fund, supporting vulnerable countries in building climate resilience.