While the Paris Agreement has already kicked-in in early 2020, carbon markets remain in limbo as the adoption of a framework for Article 6 was again postponed at the Madrid climate change conference in December 2019. While the most public attention is on exploring the thorny issues that prevent Parties from reaching an agreement, the future operationalisation of the mechanism has only received little attention.
Against this background, the question of the operationalisation of the mechanism is at the centre of the policy paper "How to Kick-Start Article 6.4?" by Nicolas Kreibich, Research Fellow in the Global Climate Governance Research Unit in the Energy, Transport and Climate Policy Division at the Wuppertal Institute. To address the question of how to implement Article 6.4, the author first developed a prototypical activity cycle and identified key elements needed to make the mechanism operational. Subsequently, he shows how these key elements could be installed on the national and international level.
His findings make clear that the Parties to the Paris Agreement need to prepare themselves much more intensively for the use of market-based instruments than was the case under the Kyoto Protocol. At the same time, however, there are great synergies between these readiness activities and other national processes, especially the elaboration and implementation of the Nationally Determined Contributions (NDCs). Nicolas Kreibich emphasises: "In view of the uncertain situation of the global carbon markets, countries considering the use of market-based instruments under the Paris Agreement should prioritise those readiness activities that at the same time provide them with a better starting position for the design of domestic climate policies".
The JIKO policy paper "How to Kick-Start Article 6.4?" can be downloaded following the link below.