Negotiators are also divided on what to do with the billions of carbon credits created under the Clean Development Mechanism (CER), which aims to help countries meet their commitments under the 1997 Kyoto Protocol. This highlights a cause for disagreement over Article 6(4), namely that the CDM hosts did not have their own Kyoto emission reduction targets, meaning that it was impossible to “double count” savings for more than one target. Although Article 6.7 states that the annual COP establishes “rules, modalities and procedures” for the carbon market under Article 6.4, there is disagreement on the extent of national control of its operation in relation to the UN regulatory body that approves each individual project or methodology. To finalize the settlement, negotiators must navigate through a thicket of impenetrable jargon, a series of technical accounting challenges, and traps of “constructive ambiguity” in the text, often hiding incompatible visions of how Article 6 should work and what it was created for in the first place. CO2 equivalent reductions are likely to offset aviation emissions under the International Civil Aviation Authority`s (ICAO) Corsia system, although they are not directly mentioned in the Paris text. (Corsia is the United Nations system for offsetting airline emissions.) Somewhat enigmatically, the draft regulation in Article 6.4 instead refers to “purposes other than contributions to NDCs” and uses language that could cover Korsia or other future systems. The current negotiating text includes various “baseline” tests to ensure additionality, including a square bracketed option that could set the bar as a measure that goes beyond what the host country would need to meet its climate commitment (NDC). The text of the option states: It adds that a full conversion of current and potentially available CDM credits “carries a significant risk” that Article 6.4 will not result in further emission reductions beyond what would have happened anyway, which “could undermine environmental benefits”. The Article 6 negotiations in Glasgow concluded three important sub-articles through “decisions” of the parties to the UNFCCC and the Paris Agreement, namely AMC 12a, AMC 12b and AMC 12c. The MAC refers to the Conference of the Parties, which serves as the meeting of the Parties to the Paris Agreement – in other words, the forum where countries meet to monitor how the Paris Agreement is put into practice. There are also annexes to the consultation (6.2), rules (6.4) and a work programme (6.8).
According to the text of the Paris Decision, the emission reductions created by Article 6.4 must be in addition to any emission reductions that would otherwise occur. There is a debate about what that means and how to measure the baseline of what “would have happened otherwise.” Article 6 is the latest article to be implemented of the 29 separate articles that make up the 2015 Paris Climate Agreement and sets out the carbon credit mechanism used by governments to meet their reduction targets under the nationally established contribution system. Paragraph 6.4 identifies the United Nations as the certifier of carbon projects that can generate credits for governments to achieve these NDCs. For example, cross-border energy integration in the Greater Mekong region has been underway for more than a decade. In September 2021, Laos signed a power purchase agreement with Vietnam for the import of 600 MW of wind power. The new Rules in Article 6 deter this type of undertaking by prohibiting any sharing of avoided emissions between two or more countries sharing a single electricity generation module. At the COP25 International Climate Summit in Madrid in December 2019, climate negotiators will again try to finalise the Article 6 “settlement” that will govern voluntary international cooperation on climate change, including carbon markets. To fully understand the task they face and the key areas of the remaining disagreements, the first port of call is the text of Article 6 of the Paris Agreement itself, which is presented in annotated form in the following graph.