GENEVA, 27 October - Nations will gather next week in Glasgow to increase climate ambition, to fulfil financial pledges to the Green Climate Fund and to reach agreement on rules to operationalise the Paris Agreement.
For many in the business community, one of the crucial goals at this year’s summit is to conclude nearly five years of talks over details of implementing the market integrity provisions of the Agreement, found in Article 6, according to IETA’s CEO Dirk Forrister.
“Article 6 is vital to the success of the Paris Agreement because it enables ambition,” Forrister said. “The temperature goals set out in the agreement will only be realised if countries cooperate across borders and sectors, leveraging the innovation, ingenuity and investment of the private sector.”
“Since the Paris Agreement was adopted in 2015, the business community has urged nations to complete the accounting and integrity guidelines for international market cooperation,” Forrister added. “In order to reach the Paris goals, we need to scale up private investment through carbon markets as soon as possible.”
IETA has published its priorities for the Article 6 negotiations, as well as a briefing guide to the Glasgow COP.
New research has shown that when aimed at net zero goals for holding temperatures to 1.5 degrees, cooperation through Article 6 would stimulate market growth from $300 billion/year in 2030 to about $1 trillion/year by 2050. An efficient global market could deliver countries’ emissions reduction potential, ensuring sustainable development and driving down the cost of climate action.
Article 6 deals with the international transfer of emissions reductions among countries, allowing them to achieve targets at lowest cost. Within the Article are two main market tools: Article 6.2, which sets down a robust accounting and reporting system for internationally transferred emissions reductions; and Article 6.4 which sets out a crediting mechanism for emissions reduction and sustainable development.
“Over 85% of the new set of Nationally Determined Contributions have stated their interest in using Article 6 to deliver their targets, and most industries need Article 6 to deliver net zero commitments,” said Andrea Bonzanni, IETA’s Director of International Policy.
“COP26 needs to give business a clear investment signal by completing the guidelines that will bring Article 6 to life and allow it to reach its full potential.”
IETA staff will be attending COP26; join us at the IETA COP26 Business Hub in Hall 5 at the Scottish Event Campus.