November 2019 - For this year's climate conference in Madrid, the goal is set to adopt a rule book to operationalize the use of market based instruments under the Paris Agreement. The German Environment Agency has now published two preliminary discussion papers in which key aspects of the Article 6.4. mechanism are examined in more detail.
One discussion paper explores the question of how the Article 6.4 mechanism may contribute towards achieving the long-term objective of net-zero GHG emissions world. The authors analyse three different approaches that may help to contribute to this goal through the operationalization of Article 6.4, namely positive and negative lists, additionality with regard to a baseline consistent with both, NDCs and long-term targets, as well as adaptation of existing instruments and criteria from climate finance. From the analyses, two storylines emerge how to combine aspects of the different approaches in a reasonable way to foster the achievement of the long-term objective of net-zero GHG emissions under Article 6.4. Another discussion paper analyses how to incentivize and facilitate the participation of private entities under Article 6.4. The study provides an overview on key factors and barriers determining private sector participation. The authors identify different options to mitigate or overcome barriers and to incentivise the participation of private sector actors.
The discussion papers have been prepared in the context of the UBA project "Designing the New Global Market Mechanism" that is being implemented by the Wuppertal Institute together with INFRAS and Fraunhofer ISI.The papers are aimed at the international community of experts and intended to promote the discussion on Article 6.4.