We are already witnessing the devastating impacts of climate change across the world, and are fast approaching a 1.5°C rise in global temperature – a crucial tipping point after which irreversible damage will be done. We know what we need to do to curb global warming: greenhouse gas emissions must fall by 43% compared with 2019 levels. And yet, currently the combined Nationally Determined Contributions (NDCs), countries’ climate pledges under the Paris Agreement, would mean only a 10% greenhouse gas emission cut, putting the world on track for 2.5°C.

What is Article 6?

Public funds won’t be enough to finance developing countries’ NDCs. Most emission reduction activities need to be implemented and financed by the private sector. Suitable finance approaches are therefore required – and this is where Article 6 of the Paris Agreement can help.

Article 6 acknowledges that countries can pursue voluntary cooperation in the implementation of their Nationally Determined Contributions to allow for higher mitigation ambition and to promote sustainable development. Article 6.2 outlines the possibility of cooperative approaches and the transfer of Internationally Transferrable Mitigation Outcomes (ITMOs) between different actors, including countries and private sector companies, through bilateral agreements. ITMOs use a carbon dioxide equivalent (CO2e) metric for a new set of market provisions or other greenhouse gas mitigation outcomes that are defined under Article 6.2 of the Paris Agreement. 

The mechanisms set out under Article 6.2 on cooperative approaches also underline that beyond emissions reductions, climate mitigation projects can directly or indirectly yield many development benefits – including job creation, technology transfer to increase access to energy, support to livelihoods and food security, gender empowerment and more.

How does it work?

Let’s take an example of cooperative approaches that are already put in place by Switzerland, Ghana, and Vanuatu.

Ghana presented at a dedicated event at COP27 the first-ever bilaterally authorized project to be implemented under this mechanism. Vanuatu presented the first unilateral authorized project, which will pave the way for implementation. By entering these voluntary cooperation approaches through bilateral agreements with Ghana and Vanuatu, Switzerland will reduce its federal administration’s greenhouse gas emissions by using Internationally Transferrable Mitigation Outcomes (ITMOs) to accelerate the implementation of climate mitigation projects with strong development benefits in developing countries. These ITMOs will not be counted towards Switzerland’s NDC but are complementary and will be cancelled without use to any NDC.

In Ghana, the ITMO project on sustainable rice cultivation – which is the first project which will obtain formal authorization for the transfer of ITMOs from a seller country and buyer country – is supporting the training of thousands of rice farmers in climate-smart agricultural practices to reduce methane emissions and enable a more efficient use of water. Another project, for which the Ghana’s Environmental protection agency has established a Public Private Partnership with IRECOP, will generate ITMOs from four composting facilities.

In Vanuatu, the implementation of a rural electrification project for which the Department of Energy will partner with the Vanuatu National Green Energy Fund, and enable the country’s population currently without electricity to have access to reliable, affordable electricity through solar power.