Enel Foundation at COP26. Advancing International Cooperation under the Paris Agreement: Issues and Options for Article 6

A new paper by Michael A. Mehling, Deputy Director at the Center for Energy and Environmental Policy Research of MIT, recently came out on the Harvard Project on Climate Agreements with the scientific contribution of Enel Foundation.

This paper explores key areas of disagreement on Article 6 and explores possible outcomes from the upcoming Conference of the Parties to the United Nations Framework Convention on Climate Change (COP-26) in November 2021 in Glasgow.

Article 6 of the Paris Agreement provides opportunities for national governments and the private sector to cooperate internationally as they implement their nationally determined contributions (NDCs) to address climate change. Specifically, it sets out three pathways for voluntary cooperation:

1.    cooperative approaches through the use of internationally transferred mitigation outcomes (ITMOs) in Article 6.2;

2.    a new crediting mechanism, sometimes referred to as the “Sustainable Development Mechanism”, in Article 6.4; and

3.    a framework for non-market approaches in Article 6.8.1

Given the substantial shortfall between currently pledged NDCs and the ambition required to achieve the temperature stabilization targets of the Paris Agreement, international cooperation under Article 6 has been described as a necessary “tool to promote more mitigation action … and pave the way for progress within the next NDC cycle.” Critics have countered that Article 6 could weaken ambition under the Paris Agreement if it lacks sufficient integrity or creates a distorted incentive for future NDCs. With a recent synthesis report of NDCs confirming that a majority of Parties intends to use Article 6 as a source of climate finance or as a means to achieve pledged emission reductions, the stakes for Article 6 are high.

Importantly, however, the treaty provision that constitutes Article 6 in the Paris Agreement is sparsely worded and replete with vague concepts. Such “constructive ambiguity” — often a deliberate choice to accommodate conflicting viewpoints — can compromise implementation of Article 6 by leaving room for divergent interpretations of key operational elements and creating uncertainty. Parties have therefore been engaged in developing rules and guidance for implementation of Article 6 since adoption of the Paris Agreement. Just as Article 6 was the last provision Parties agreed upon when the Paris Agreement was adopted, its operationalization continues to defy a negotiated outcome.

Download the full paper here.