Analysis of options for determining OMGE, SOP and transition within Article 6

The report analyzes how varying rates of OMGE and SOP, alongside CDM transition rules, affect global GHG abatement and adaptation funding. It finds that higher OMGE rates increase net global abatement and credit prices, while higher SOP rates increase revenues for the Adaptation Fund without affecting net global abatement. The transition of CDM units and activities is found to potentially increase global emissions unless limited to vulnerable projects.

• Increasing OMGE cancellation rates lead to higher net global abatement in both buyer and host countries. Specifically, a 30% OMGE rate is estimated to provide approximately 800 MtCO2 of additional abatement between 2021 and 2030, which could prevent global damages valued between $45 billion and $181 billion.
• Higher SOP percentage levels increase revenues for the Adaptation Fund, though they do not change net global abatement because host country emission increases are offset by buyer country emission decreases. When combined with OMGE, SOP revenues increase because higher credit prices outweigh the lower volume of transacted credits; a 5% SOP rate could generate between €2.7 billion and €4.6 billion for adaptation from 2021-2030, depending on OMGE rates of 2-30%.
• The transition of CDM CP2 CERs directly increases global GHG emissions, with a potential increase of up to 320 MtCO2e if projects registered from 1 January 2013 onwards are eligible. Similarly, transitioning CDM activities could increase global emissions by about 763 MtCO2e if 30% of projects transition, as many do not require carbon market revenues to maintain abatement.
• To maximize global GHG emission reductions, the report suggests limiting CDM activity transition only to 'vulnerable' projects—those that would stop abatement without credit revenues—provided there is a robust assessment process. Additionally, applying SOP and OMGE to Article 6.4 credits without applying them to Article 6.2 ITMO transfers may undermine the intended mitigation and adaptation benefits.

APA

NewClimate Institute (2021). Analysis of options for determining OMGE, SOP and transition within Article 6. http://www.newclimate.org/resources/publications/analysis-of-options-for-determining-omge-sop-and-transition-within-article-6

Chicago

NewClimate Institute. Analysis of options for determining OMGE, SOP and transition within Article 6. 2021. http://www.newclimate.org/resources/publications/analysis-of-options-for-determining-omge-sop-and-transition-within-article-6.

Wikipedia

{{cite report |author=NewClimate Institute |title=Analysis of options for determining OMGE, SOP and transition within Article 6 |date=31 May 2021 |url=http://www.newclimate.org/resources/publications/analysis-of-options-for-determining-omge-sop-and-transition-within-article-6 |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{newclimateinstitute2021analysis, author = {{NewClimate Institute}}, title = {{Analysis of options for determining OMGE, SOP and transition within Article 6}}, institution = {NewClimate Institute}, year = {2021}, month = may, url = {http://www.newclimate.org/resources/publications/analysis-of-options-for-determining-omge-sop-and-transition-within-article-6}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }