Countries agreed to the implementing rules for three instruments that help Parties cooperate to meet their intended emission reductions and adaptation aims as captured in their national climate action plans under the Paris Agreement (Nationally Determined Contributions, or NDCs).

The first two of these instruments involve cooperation which will result in the transfer of mitigation of emissions between countries, from the country that achieved the reduction to the country that will acquire that reduction. The instruments are designed to enable and incentivize private sector involvement.

Under non-market approaches, countries are enabled to work together to achieve mitigation and adaptation, as well as sustainable development and poverty reduction.

Decisions on implementation rules were adopted for all three instruments:

• Firstly, guidance was adopted for cooperative approaches – where Parties in bilateral arrangements recognize the transfer of emission reductions between them. This enables mitigation programmes like emission trading systems in countries to link to each other.
• Secondly, rules, modalities and procedures were adopted for the new UNFCCC Mechanism, which credits emission reducing activities. This enables a company in one country to reduce emissions in that country and have those reductions credited so that it can sell them to another company in another country. That second company may use them for complying with its own emission reduction obligations or to help it meet net-zero.
• Thirdly, Parties adopted a work programme to support non-market approaches being implemented between Parties. The work programme helps different countries and their institutions and stakeholder develop cooperation in a number of areas, such as development of clean energy sources.

Strengthened cooperation enables Parties to be more ambitious in their actions to curb greenhouse gas emissions and to build resilience to climate change. 

This could be through making it more cost-efficient for them to meet their NDC, enabling them to consider going further in mitigation than their NDC had intended, or it could be to have extra adaptation action resulting from emission reduction efforts.

Both cooperative approaches and the UNFCCC mechanism incentivize the private sector to implement mitigation activities across the world, in a range of sectors and technologies for example, energy efficiency, transport and reforestation.

These mitigation activities allow for the development of carbon credits that can be transferred internationally and used in other countries towards meeting the aims of NDCs or other compliance uses.

These instruments, by delivering an investment signal to the private sector, enable countries to achieve scale in mitigation action that in turn may help to contribute to adaptation action.

For the private sector, the adoption of the rules enables new mitigation activities to start in particular to implement mitigation projects under the new UNFCCC   mechanism.

In addition, many activities that already operated under the clean development mechanism of the Kyoto Protocol will be able to move over to the new UNFCCC mechanism by using the rules adopted that provide for this transition.

For cooperative approaches, countries that are cooperating already to deliver their NDCs with cooperative approaches will now start to provide the details of those approaches through reports.

The reports will be reviewed and all the details made available on a public interface on the UNFCCC website.

The purpose of the reports is to allow for accurate accounting of transfers and to provide transparency as to the way in which countries are cooperating. 

For the project mechanisms, the bodies that supervise the clean development mechanism and the new UNFCCC mechanism will each meet early next year, to start to deliver the rules for the new projects and the processes for transitioning existing projects over to the new system under the Paris Agreement.

In relation to cooperation that does not involve carbon credits, a committee will start to meet in mid-2022 to implement the programme of work that Parties agreed in Glasgow.

All the rules are decided – further aspects will be worked on by Parties in the SBSTA next year to add some details for implementation.