Article 6 – Business Brief
Article 6 is a critical piece of the Paris Agreement and offers great potential to significantly raise climate ambition and action and lower costs, by engaging the private sector and spreading finance, technology and expertise into new areas of climate action.
Under the landmark 2015 Paris Climate Agreement, all participating countries are required to set national greenhouse gas (GHG) emissions reductions targets—also called Nationally Determined Contributions (NDCs). This bottom-up approach means that governments decide how fast to decarbonise their economies.
According to recent calculations, the sum of all national climate targets submitted to date is expected to result in a dangerous 2.7°C warming increase by the end of the century.
One of the keys to accelerating the necessary decarbonisation lies in the implementation of cross-border greenhouse gas emission markets—in particular carbon markets. This is important as it enables countries and businesses to cost-effectively manage their emissions reductions both domestically and through co-operation with other countries and businesses globally.
Such a system, however, requires governments to agree a common rulebook to operationalise Article 6 of the Paris Agreement at the next UN Climate Change Conference (COP26), which will be held in Glasgow, 31 October—12 November 2021.
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