Article 6 of the Paris Agreement allows for the use of co-operative approaches, such as internationally transferred mitigation outcomes (ITMOs), to increase ambition and promote sustainable development. However, rules involving the use of ITMOs have yet to be agreed-upon by the parties to the United Nations Framework Convention on Climate Change (UNFCCC). Currently, no countries are on track to meet their nationally determined contributions (NDCs). Climate ambition needs to be significantly scaled up to limit average global temperature rise to 1.5°C to avoid planetary tipping points caused by climate change. The final negotiated text for Article 6 will define our ability to achieve this goal.
- After 20 years of experience with the Clean Development Mechanism (CDM) and Joint Implementation (JI), several accounting and credibility concerns have been identified. These concerns must be addressed, and lessons learned must be applied in the design of ITMOs.
- ITMOs must adhere to the basic rules of a credible offset mechanism. These include ensuring credited emissions reductions are additional to what would have occurred in the absence of the ITMO, can be verified as reductions from a credibly determined and agreed-upon benchmark, and are monitored and reported on over time.
- ITMOs represent a fundamental change from CDM and JI in two important ways. First, all countries, not just developed countries, have now set emissions targets under their NDCs. Within this new context, ITMOs should be used in accordance with the objectives of the Paris Agreement, to increase global climate ambition and not create perverse incentives that impair ambition. Second, while the types of activities and projects eligible to generate mitigation outcomes under Article 6 remain a matter of debate, the eligibility of low-carbon exports (not eligible under CDM/JI), in particular, raises significant challenges. These concerns have yet to be fully addressed and are critical to the integrity and effectiveness of international co-operation on climate action.
