Options for fostering increasing ambition levels under the Article 6.4 mechanism

Article 6 of the Paris Agreement establishes mechanisms for Parties to “pursue voluntary cooperation in the implementation of their nationally determined contributions to allow for higher ambition in their mitigation and adaptation actions […]” (Article 6.1). I. e. the mechanisms are explicitly designed to foster higher ambition. However, without additional guidance and rules, the economic incentives of carbon markets may work against increasing host country ambition. For example, setting ambitious NDC targets may directly reduce the amount of mitigation outcomes that go beyond the NDC target and that a host country can transfer abroad. The report presents four options on how the risks can be addressed and ambition can be increased