Deciphering Article 6 of the Paris Agreement

The document clarifies the distinctions between Article 6.2 and 6.4 mechanisms, the role of 'corresponding adjustments' in preventing double counting, and the transition of the Kyoto Protocol's Clean Development Mechanism (CDM) into the new framework. It highlights risks such as the potential for 2.8 billion 'dud' credits from transitioning CDM projects and the lack of mandatory cancellation for ITMOs under Article 6.2.

• Article 6 establishes two distinct market mechanisms: Article 6.2 allows for bilateral or multilateral trade of Internationally Transferred Mitigation Outcomes (ITMOs), while Article 6.4 creates a UN-overseen global carbon market issuing A6.4ERs.
• To prevent double counting, the rules require 'corresponding adjustments' where a selling country deducts credits from its own greenhouse gas inventory. However, this is not airtight; unregulated private voluntary credits may still allow double counting, and specific accounting for aviation offsets under CORSIA could lead to significant double-counting of credits.
• The Kyoto Protocol's Clean Development Mechanism (CDM) is transitioning to Article 6. Projects may use old methodologies until December 31, 2025, potentially allowing up to 2.8 billion credits to be rebranded as A6.4ERs. Additionally, up to 300 million CERs from projects registered on or after January 1, 2013, can be used toward countries' first NDCs until 2030.
• The Article 6.4 mechanism includes mandatory levies to support climate adaptation (5% of A6.4ERs to the Adaptation Fund) and a 2% cancellation rate to ensure overall mitigation in global emissions (OMGE). In contrast, Article 6.2 has no mandatory levy for adaptation and its OMGE cancellation is purely voluntary.
• Avoided emissions are currently not eligible as a basis for generating carbon credits under Article 6, maintaining the standard set by the Kyoto Protocol's CDM.

APA

Dufrasne, G., & Crook, J. (2021). Deciphering Article 6 of the Paris Agreement. Carbon Market Watch. https://carbonmarketwatch.org/2021/12/10/faq-deciphering-article-6-of-the-paris-agreement/

Chicago

Dufrasne, Gilles, and Jonathan Crook. Deciphering Article 6 of the Paris Agreement. Carbon Market Watch, 2021. https://carbonmarketwatch.org/2021/12/10/faq-deciphering-article-6-of-the-paris-agreement/.

Wikipedia

{{cite report |last1=Dufrasne |first1=Gilles |last2=Crook |first2=Jonathan |title=Deciphering Article 6 of the Paris Agreement |publisher=Carbon Market Watch |date=10 December 2021 |url=https://carbonmarketwatch.org/2021/12/10/faq-deciphering-article-6-of-the-paris-agreement/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{dufrasne2021deciphering, author = {Dufrasne, Gilles and Crook, Jonathan}, title = {{Deciphering Article 6 of the Paris Agreement}}, institution = {Carbon Market Watch}, year = {2021}, month = dec, url = {https://carbonmarketwatch.org/2021/12/10/faq-deciphering-article-6-of-the-paris-agreement/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }