What's in the Article 6.2?
The Paris Agreement's Article 6 focuses on inter-country collaboration, which includes carbon trading. During the COP26 summit in 2021, an agreement was reached to establish guidelines for reporting and accounting for "internationally transferred mitigation outcomes" (ITMOs) as outlined in Article 6.2. Additionally, preliminary regulations for the newly introduced Article 6.4 crediting mechanism were also established.
The number of countries interested in collaborating under Article 6.2 is steadily increasing. In 2022, numerous countries engaged in bilateral agreements under Article 6.2 (refer to the Figure 15). Additionally, Blue Carbon, a company based in the United Arab Emirates, signed memoranda of understanding (MoUs) with the governments of Liberia, Tanzania, and Zambia. The Republic of Korea is currently in negotiations with several countries to establish cooperation agreements. During COP27, Ghana and Vanuatu, in partnership with Switzerland and the United Nations Development Programme, presented the first projects that generate authorized emissions reductions under Article 6.2. Furthermore, Thailand and Switzerland authorized the first Article 6 program in Asia in February 2023. Singapore has also entered into several MoUs with carbon crediting mechanisms to provide credits for its carbon tax. The growing number of agreements highlights the increasing importance of Article 6 as a tool for countries to achieve their NDC targets. As these agreements evolve into comprehensive cooperative approaches under Article 6.2, it will become clearer how countries are leveraging Article 6 to enhance their NDC ambition while managing the potential risks of lowering future ambition to maximize credit generation.