ARTICLE-6-PARIS

Article 6 Paris international carbon markets NDCs.

Definition

Article 6 mechanisms: (1) Article 6.2 ITMOs (Internationally Transferred Mitigation Outcomes): bilateral country-to-country agreements transfer ITMOs (typically 1 ITMO = 1 tCO2e reduced/removed) between Parties, buyer country uses ITMO toward its NDC, seller country corresponding adjustment (subtract ITMO from its accounting to avoid double-counting), examples Switzerland-Ghana ($/Peru/Senegal/Thailand) bilateral agreements signed 2020-2023, Japan + Singapore actively pursuing bilateral. (2) Article 6.4 Mechanism: UN Supervisory Body (SBSTA + CMA decisions) governs centralized crediting mechanism (CDM Clean Development Mechanism Kyoto Protocol successor), credits called A6.4ERs (Article 6.4 Emission Reductions), can be used by buyer countries for NDC + voluntary buyers companies, methodologies + projects approval process. (3) Glasgow Pact COP26 2021 finalized core Article 6 rules ; COP27 2022 Sharm finalized A6.4 mechanism details ; COP28 Dubai 2023 + COP29 Baku 2024 finalized methodologies + transition CDM to A6.4. (4) Issues: corresponding adjustments accounting integrity, transparency requirements, share of proceeds 5% adaptation fund + 5% overall mitigation. Potential volumes: ~hundreds millions ITMOs/year emerging 2025+ market.

Origin

Article 6 included Paris Agreement adopted COP21 2015 + entered into force November 2016 ; rules finalized Glasgow Pact COP26 2021 + COP27/28/29 ; first ITMO transfers 2023+.

Example in context

Switzerland-Thailand bilateral agreement Article 6.2 ITMOs: Switzerland buys ITMOs from Thailand's e-mobility project (electric bus replacing diesel buses Bangkok) ; ~500K tCO2e ITMOs transferred 2023, Switzerland uses ITMOs toward its NDC 50% reduction by 2030, Thailand corresponding adjustment subtract ITMOs from accounting.

Related terms

• Voluntary Carbon Market — complementary compliance.