These standards provide for a centralized carbon market under United Nations (UN), a landmark step towards the conclusion of negotiations under Article 6 of the Paris Agreement.
Article 6 of the Paris Agreement
- It provides principles through which countries can “pursue voluntary cooperation” to reach their climate targets.
- Allows countries to transfer carbon credits earned from the reduction of greenhouse gas emissions helping other countries meet their climate targets.
- It comprises two sub-sections: Article 6.2 and Article 6.4
- Article 6.2: Countries can trade emission reductions/removals through bilateral or multilateral agreements.
- Traded credits are called Internationally Transferred Mitigation Outcomes (ITMOs) measured in carbon dioxide equivalent (CO2e) or any other metric.
- Article 6.4 or the Paris Agreement Crediting Mechanism: Seeks to create a global carbon market overseen by a UN entity called Article 6.4 Supervisory Body (6.4SB).
- Credits under this are called A6.4ERs, and can be bought by countries, companies, or individuals.
- Currently agreed standards were proposed at the meeting of the Supervisory Body for Article 6.4 at Baku last month.
- Article 6.2: Countries can trade emission reductions/removals through bilateral or multilateral agreements.
Significance of the agreed Carbon Market Standards
- Unlock financial support to developing countries.
- Facilitate post-credit monitoring and long-term market reliability.
Carbon Markets or Carbon Pricing Instruments
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