Article 6 provides a policy foundation for trading in emissions reductions between states, a critical element for business in the drive to achieve net zero emissions by the second half of the century.
Parties were unable to find agreement on Article 6 at COP24, resulting in the absence of its rules from the Katowice Climate Package. Instead, they forwarded negotiating texts to Bonn that will serve as a starting point for discussions this week, led by Paul Watkinson (France), Chair of the UNFCCC’s Subsidiary Body for Science and Technical Advice (SBSTA).
“We believe the business community’s ability to deliver ambitious targets with large scale investments depends on strong, clear rules on market mechanisms,” said Dirk Forrister, IETA’s President and CEO. “With clarity on Article 6, they can invest with confidence in the vast opportunities for reductions and removals that are spread around the globe – and trade together to achieve net zero emissions.”
“Article 6 is crucial to all businesses, big and small, from all sectors of the economy and from all countries” said Majda Dabaghi, Director of Inclusive and Green Growth at the International Chamber of Commerce (ICC). “Our members – 45 million businesses from over 100 countries – are eagerly awaiting clarity on Article 6 rules, which are essential to fully engage the private sector in the decarbonisation challenge”
Mr Forrister added: “We need clear guidance on how to account for transfers of emissions reductions, on the type of projects that can earn reductions and on measurement and verification rules. Absent that guidance, the private sector will not have the clarity it needs to deploy the billions – even trillions in capital expenditure that are needed.”
ICC and IETA are among the signatories of a declaration on the need to promote robust accounting rules for international carbon markets, which was released at COP24.
“The declaration is more relevant than ever, in light of the COP24 outcome, and we urge Parties to work constructively to ensure a good outcome at COP25 in Santiago,” explained Ms Dabaghi.
Negotiators will meet for two weeks in Bonn. The outcomes of the talks will be forwarded for final decision at the 25th Conference of Parties in December in Santiago, Chile.