UN Climate Change News, 17 February 2022 – In an address to an international conference organized by the Japanese Ministry of Environment today, UN Climate Change Executive Secretary Patricia Espinosa highlighted the benefits of a highly complex but critically important piece of the climate action puzzle: Article 6 of the Paris Agreement.

Article 6 clarifies how international carbon markets involving governments should function, essentially supporting the transfer of emission reductions between countries while also incentivizing the private sector to invest in climate-friendly solutions.

At the UN Climate Change Conference in Glasgow last November, the rules related to Article 6 were adopted. Their adoption ensures the Paris Agreement is fully operational, and its unique combination of both market and non-market approaches will support both efforts to curb greenhouse gas emissions and to build resilience.

“The rules are highly technical,” Ms. Espinosa said. “The benefits however, are clear. For example, the rules provide the groundwork to help unlock resources on support for developing nations. This is important for developing and especially least developed countries and small island states. After all, many do not currently have the means or resources necessary to energize an economy-wide transition towards a low emissions future.”

With Article 6, countries can both raise ambition to fight climate change – which is crucial to achieve the Paris Agreement’s central goal of holding global average rise to as close as possible to 1.5 degrees C – and implement their national climate action plans far more cheaply.

According to the International Emission Trading Association, Article 6 has the potential to halve the cost of implementing national climate action plans, (Nationally Determined Contributions, or NDCs). This could save an estimated $250 billion annually by 2030 alone.

Very significantly, Article 6 can be a source of climate finance for developing nations, with a share of proceeds going towards efforts to green rapidly growing economies and to build resilience to the inevitable impacts of climate change.

UN Climate Change has been tasked by governments though regional collaboration centers (RCCs) — to work with Parties and supervisory bodies to roll out the capacity-building support necessary for this work

There is already lot to build on. “RCCs are already assisting countries on the ground with respect to broad climate action, including the implementation of the Clean Development Mechanism, or CDM, the predecessor of Article 6, which provided the backbone for the Kyoto Protocol,” Ms. Espinosa said.

See the statement below:

It’s a pleasure to be here and I want to begin by thanking Japan for organizing today’s event.

Japan has always played significant leadership role in our process, but I want to note that Japan has long been a champion of Article 6. We thank Japan for its leadership and technical expertise on this issue.

Ladies and gentlemen, let’s begin with COP26 and by acknowledging that while we achieved significant progress in several areas, not everyone got what they wanted. That’s the nature of consensus.

Nevertheless, the final package agreed multilaterally in Glasgow was the most significant progress achieved since the Paris Agreement was adopted.

Parties left with clarity on work needed to reach the 1.5-degree goal.

The Paris Agreement rulebook was completed; a significant accomplishment. It was a long and contentious road to achieve it.

This paves the way for nations to finally move beyond the negotiations stage and focus on implementation.

Key to this was agreement on the rules for Article 6 — a longstanding issue.

Their adoption is significant. It ensures the Paris Agreement is fully operational, and its unique combination of both market and non-market approaches will support both mitigation and adaptation.

The rules are highly technical. The benefits however, are clear.

For example, the rules provide the groundwork to help unlock resources on support for developing nations.

This is important for developing and especially least developed countries and small island states. After all, many do not currently have the means or resources necessary to energize an economy-wide transition towards a low emissions future.

It’s about leveling the playing field so that emissions can be traded with environmental integrity.

It’s about getting more sustainable development projects off the ground for developing and least-developed nations…

… and it’s about getting all nations to move together towards a low-emissions trajectory.

Article 6 has real potential to enable all Parties to deliver the ambitious objectives of the Paris Agreement and make progress on the Sustainable Development Goals.

Recent research reports published by the International Emission Trading Authority shows that Article 6 has the potential to halve the cost of implementing Nationally Determined Contributions. This would save an estimated $250 billion annually by 2030 alone.

The rules have clear benefits.

However, we also know that the rules adopted in Glasgow expands the role of the host countries.

This includes more responsibilities, oversight and comes with its own set of challenges.

UN Climate Change has been tasked by the Parties though the regional collaboration centers — the RCCs — to work with Parties and supervisory bodies to roll out the capacity-building support necessary for this work.

The good news is that the RCCs are already assisting countries on the ground with respect to broad climate action…

…including the implementation of the Clean Development Mechanism, or CDM, the predecessor of Article 6, which provided the backbone for the Kyoto Protocol.

Yet, we know capacities need to be further strengthened through trainings, technical inputs, publications and communication work.

That’s why this conference is extremely important.

It provides an excellent opportunity to identify needs from countries.

This includes countries that do not have the capacity to fulfil all the requirements specified in the finalized rulebook from Glasgow.

Events such as this one, as well as the ones to follow, will build capacity for nations to use Article Six as a way to assist their implementation of the NDCs and to boost climate ambition.

I’d therefore like to thank Japan for its support to the RCCs in order to help build this crucial institutional and technical capacity.

Ladies and gentlemen,

The negotiations that helped get Article 6 to this point were extremely difficult, but I believe a fine balance has been struck.

Its approval shows the collective commitment of the international community to multilateralism and collaboration.

And it shows that multilateralism works and works for people around the world. Thank you.