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How does the conditionality of NDC targets impact Article 6 cooperation?

Photo by Climate Finance Innovators

June 2021 - In the new or updated Nationally Determined Contributions (NDCs), many countries have maintained the distinction between unconditional and conditional targets. A new study examines how the conditionality of NDC targets can influence Article 6 cooperation by looking at the NDCs of several African countries. In the absence of clear guidance from UNFCCC on what exactly NDC conditionality means and how it should be applied, many countries have developed their own interpretation of how to use the carbon market to achieve their targets.

Potential buyers of certificates from Article 6 mitigation activities tend to think that only mitigation activities pertaining to conditional NDC components or going beyond conditional targets are suitable for Article 6 cooperation. However, this does not necessarily align with the application of conditionality in the analyzed updated NDCs of Zambia, Rwanda, Senegal, Ethiopia, Cabo Verde and Kenya. The study presents four different approaches to how the conditionality of NDC targets in these countries relates to Article 6. While Zambia considers its entire NDC to be "conditional", other countries strictly separate the conditional and unconditional parts and only allow the transfer of mitigation outcomes (ITMOs) in the conditional part. A third category of countries allows Article 6 activities in both the conditional and unconditional parts of the NDCs. Kenya, by way of contrast, is pursuing a completely different approach: to implement its climate target, the country wants to mobilize 13% of the necessary budget itself, while 87% of the budget is to be covered by international financial support. Which mitigation activities are to be implemented either by means of external financial support or through carbon markets remains open.

The study therefore concludes that conditionality alone should not determine whether Article 6 activities can be implemented – even though at first glance, the use of Article 6 for unconditional NDC targets seems to contradict the idea that these measures should be achieved without international support. In the absence of clear rules and in light of Parties’ sovereign right to define ‘nationally determined’ targets and conditions, the authors argue that solutions may need to be found that ensure that Article 6 cooperation contributes to strengthening NDC ambition. Against this background, the work on a shared understanding of NDC conditionality with regard to Article 6 cooperation is of particular importance.

The study is available for download here.

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