Under the Paris Agreement, all Parties are obliged to periodically develop climate mitigation plans with each NDC (Nationally Determined Contributions) presenting a progression beyond the then current level of ambition. For market-based cooperative action according to Article 6 of the Agreement, this dynamic development of national climate policy presents a challenge: in market-based schemes, emission reductions are often calculated on the basis of a hypothetical business as usual emission scenario (the baseline). This scenario would quantify emissions occurring in all likelihood in the absence of a proposed project. The actual emission reductions are then calculated as the difference between the baseline emission scenario and the actually measured emissions of the implemented activity.
However, the dynamic nature of NDCs means that a purely static baseline approach is therefore clearly not compatible with the objectives of the Paris Agreement and the obligations it imposes on all countries. Against this background, a new paper presents a concept to dynamically reflect the ambition of the Paris Agreement in the crediting baseline helping to design Art. 6.4 mitigation activities in a way that allows them to help host countries to account for their NDC development and embark on a truly transformative pathway.
The JIKO Policy Paper can be downloaded free of charge in the link below.