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Parties Envisage Greater Use of Mechanisms

Party positions on market mechanisms in latest NDCs

Party positions on market mechanisms in latest NDCs

New Paper on Market Mechanisms in Recent NDC Updates

April 2021 - A new research paper has examined how Parties to the Paris Agreement position themselves on market mechanisms in the latest NDCs. Five years after the adoption of the Paris Agreement in 2015, Parties were requested to prepare new or updated NDCs and submit them to the UNFCCC Secretariat by 2020. The paper surveys text passages regarding international cooperation under Article 6 in the 51 NDCs that were submitted until 28 February 2021.

Most Parties are open to using market mechanisms in the future. The paper also compares the positions on market mechanisms in the new or recently updated NDCs with the positions in the previous NDCs of the same 51 Parties. The comparison shows that market mechanisms now have a stronger resonance. Of the 51 NDCs analysed, 20 express a stronger interest in market mechanisms compared to the previous NDCs. 

Another aspect explored is whether Parties intend to become sellers or buyers of mitigation outcomes. In addition, the first part of the paper looks at the pilot activities of Parties and how this engagement relates to the Parties' position towards carbon markets in their NDCs.

The authors note that despite positive trends, major progress in the NDCs on market mechanisms was not to be expected. The statements on market mechanisms are very vague and overall do not suggest that there is an increased role for international market mechanisms in climate change mitigation.

However, the 51 NDCs analysed correspond to only about 40 % of the Parties to the Paris Agreement, so that the analysis can only be regarded as an interim assessment. An updated version of the paper will be published at a later stage, which will include the remaining NDCs that have not yet been submitted.

Implementing Paris cooperatively - Market mechanisms in the latest NDC submissions

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