The Paris Agreement, adopted by 196 Parties to the United Nations Framework Convention on Climate Change (UNFCCC) in December 2015, aims to limit global warming to well below 2 degrees Celsius compared to pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 degrees Celsius.
However, the cost of adaptation and mitigation are huge. That is why Article 6 of the Paris Agreement can play a key role in unlocking the finance required for Nationally Determined Contributions (NDC) implementation by enabling cooperative approaches between Parties. Article 6 outlines the rules and guidelines that will allow Cambodia to cooperate with other Parties of the Paris Agreement in the implementation of their NDCs.
Check out our introduction video to understand more about Article 6 and why it is a game changer!
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We are in a race against time to tackle the climate crisis, and urgent action is needed to reduce emissions and limit further increases in the global temperature. A key problem, however, is that not all countries have the finance to achieve it. Let's take a closer look. In 2015, 196 nations adopted the Paris Agreement, a legally binding international treaty on climate change. Its goal is to limit global warming to well below 2��C. To achieve this goal, countries including both larger and smaller emitters, industrialized or not, set their targets for reducing greenhouse gas emissions. These are known as nationally Determined Contributions, or NDCS. Here is where finance comes into the picture. Many NDCS outline mitigation targets that require the use of newer, more expensive technologies than those that are already in use. Therefore, for developing countries in particular, mobilizing the financing required to implement and achieve their NDC's is a significant challenge. Through Article 6, the Paris Agreement gives one potential opportunity to overcome this barrier. Trading greenhouse gas emission reduction credits and an international carbon market. Article 6 permits countries to pursue voluntary cooperation in the implementation of their NDCS through the international transfer of emission reductions, meaning that the reduction generated in one country can be transferred and counted towards the climate targets of another. This mechanism allows countries to speed up their implementation of their NDC's and raise the level of ambition in their climate targets. How exactly does such voluntary cooperation work? Essentially, it allows the trading of emission reductions or mitigation outcomes between countries in exchange for carbon finance. Let's say that Country A has set very high mitigation targets, cutting emissions by more than 50% by 2030. However, they acknowledged that some emissions are extremely expensive to reduce with their current technologies. They see that international cooperation provides an opportunity to reduce these emissions in a more efficient way. At the same time, in country B that also has its own mitigation targets, the actual cost of reducing emissions is much lower, but it lacks the means to meet most of its targets. Article 6 provides a way for both countries to help each other. Country A can purchase credits for the mitigation outcomes generated by Country B and use these to meet or go beyond its own targets. For Country B, the results based finance provided by Country A's purchase of mitigation outcomes. Allows it to reduce emissions through the use of new and cleaner technologies, while also contributing to national sustainable development objectives such as green job creation. It should be mentioned that a country selling their mitigation outcomes cannot count these reductions towards its own NDC achievement because the owner is the country that buys them. This mechanism, known as corresponding adjustments, is designed to avoid the double counting of mitigation outcomes. Because the global impact of reducing emissions anywhere is the same, Article 6 allows for channeling funding to where it is cheapest to reduce emissions, helping to speed U climate change mitigation and raise countries level of climate ambition. To learn more about Gigi's work on Article 6, visit Gigis website.
