Article 6 of the Paris Agreement
Article 6 of the Paris Agreement regulates mechanisms for cooperation between countries and global trading with emissions.
Article 6 of the Paris Agreement allows for countries to voluntarily cooperate to reach their respective mitigation targets. The goal is that cooperation between countries will increase ambitions. By working together, countries can achieve larger emission reductions than what they otherwise would have been able to do with their own resources. The emission reductions can then be distributed between the cooperating participants and transferred between countries.
According to the reporting requirements to the UNFCCC secretariat, countries that wish to transfer mitigation outcomes (emission reductions and removals) internationally must report on and adjust for these in their respective emission balances. Adjusting emission balances is crucial to prevent double counting of mitigation outcomes. Double counting can lead to increased emissions and must therefore be avoided to ensure effective Article 6 cooperation.
Three forms of cooperation within Article 6
Article 6 includes three different forms of cooperation. These are described by Articles 6.2, 6.4 and 6.8
- Article 6.2 states that countries can cooperate and transfer mitigation outcomes between each other to achieve the objectives of their climate plans.
- Article 6.4 outlines the framework of a market mechanism for global trade with emission outcomes. An official supervisory body shall monitor the market mechanism and have the mandate to review and approve emission outcomes which can be transferred and used in emissions trading.
- Article 6.8 deals with non-market approaches to assist in the implementation of NDCs, in the context of sustainable development and poverty eradication. Such non-market approaches can include activities within for example mitigation, adaptation, finance, technology development and transfer and capacity building.
The Swedish Energy Agency is focusing on establishing collaborations under Article 6.2.
What is the purpose of Article 6?
Under the Paris Agreement, ratifying countries have committed to reduce their greenhouse gas emissions. All countries must express the highest possible ambition in their respective nationally determined contributions (NDCs). However, there are great differences between countries when it comes to the conditions for reducing emissions.
Under Article 6, cooperation between two countries should be based on voluntary participation and should contribute to globally reduced emissions and increased climate ambition.
A global increase in climate ambition is necessary to meet the Paris Agreement's goal of keeping global warming well below 2 °C, aiming at 1.5 °C. With the current policies in place, global warming is estimated to be limited to 3°C.
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Figure: From UNEP Emissions Gap Report 2023. The figure shows that current policies and ambitions fall short of both a 2°C and 1,5°C pathway, meaning they are insufficient in limiting global warming in accordance with the Paris Agreement.
Article 6 partnerships are cost-effective
An Article 6 collaboration is an opportunity to reduce emissions in a cost-effective way, since mitigation can be performed where costs are lower.
Well-functioning emissions trading under Article 6 of the Paris Agreement enables countries to reach their climate targets at a significantly lower cost. If countries reinvest these cost-savings into additional mitigation, cooperation under Article 6 can contribute to larger emission reductions globally. In a study for the University of Maryland, researchers found that this can double global emission reductions.
Modelling the Economic Benefits of Article 6, IETA
Cooperation for the green transition and sustainable development
In addition to reducing greenhouse gas emissions, Article 6 collaborations can facilitate capacity-building and the transfer of mitigation technology, assisting participating countries to accelerate a green transition. Furthermore, cooperation within Article 6 shall promote sustainable development.
The Swedish Energy Agency is currently working on developing methods to measure and follow up the contribution to sustainable development in our Article 6 collaborations.
