The issue of accounting for emission reductions transferred under Article 6.4 remains a major problem. The soundness of the accounting rules is essential so that emissions reductions cannot be counted more than once (double counting) and that the environmental integrity of the Paris Agreement is preserved. Another sensitive point is how to deal with quotas produced under the Kyoto Protocol and whether countries can use them under the Paris Agreement. There was no agreement on the introduction of royalties to support adaptation measures, as was the case under the Clean Development Mechanism (CDM). In the face of these and other disputes, the parties postponed the Article 6 decision until the Glasgow climate change conference. « It`s hard to imagine how countries will agree on the right options and the right accounting rules and methods, when we can`t even have an agreement to eliminate those that are clearly incompatible… I mean, it`s not even a climate atmosphere, in many cases it`s common sense. This highlights a reason for disagreement with Article 6.4, namely that cdM hosts did not have their own Kyoto emission reduction targets, meaning that economies cannot be « counted twice » towards more than one target. A similar menu of options is discussed for the section 6.4 regulatory framework. Here, too, the option is to provide a temporary exemption for credits negotiated outside the scope of an NDC.
These « Article 6 » rules on carbon markets and other forms of international cooperation are the last piece of the Paris regime to be resolved after the rest of its « regulatory corpus » was adopted at the end of 2018. These accounting guidelines are an important part of the ongoing negotiations on the Article 6 regulatory framework. It also faces the technical challenge created by the inconsistency between the NDCs in each country. A corresponding option in the draft text relating to Article 6.2 indicates that the general requirements for the prevention of double counts already adopted under paragraph 77, point d), of the Paris Regulation would be « supecede[d] by the provisions of Article 6. The statement against it is an attempt to reopen the debate. Although Article 6.7 stipulates that the annual COP adopts rules, modalities and procedures for the carbon market in accordance with Article 6.4, there is disagreement over the extent of national control over its activities and the UN supervisory body signs each draft or methodology. This part of the regulation specifies that, as part of their transparency obligations under the Paris regime, countries must report on their use or sale of emission credits in accordance with Article 6 and make appropriate adjustments to their « emissions balance ». At the international climate summit in Madrid in December 2019, climate negotiators will once again attempt to finalize the Article 6 « regulatory framework » that will govern voluntary international cooperation on climate change issues, including carbon markets. In order to truly understand the task entrusted to them and the main areas of disagreement that remain, the first point of contact is the text of Article 6 of the Paris Agreement itself, presented in annotated form in the graph below. To finalize the rules, negotiators must navigate the text through a thicket of impenetrable jargon, a series of technical accounting challenges and bear traps of « constructive ambiguity » that often hide incompatible views on how Article 6 should work and why it was created. The last unresolved element of the Paris « Regulatory Framework » agreement, the Article 6 negotiations have symbolic significance for the general regime, which is expected to enter into force in early 2020.
A lack of agreement on solving this problem reflects the technical challenges it poses and not the political differences on the appropriate solution, says former co-chair Kizzier.