How to assess activities and cooperative approaches?
As West African countries progress towards Article 6 readiness, opportunities to effectively source and develop carbon market activities emerge. Different approaches, mechanisms and benchmarks are available for establishing impactful projects and to monitor their effectiveness over time. In order to make well-informed decisions, it is crucial to consider key aspects of activity evaluation. This includes assessing activities against the NDC, gathering insights on contractual structures as well as cooperative approaches between countries and establishing relevant links to credit pricing.
How to assess activities in relation to the NDC?
Decision 3/CMA.3 requires that mitigation activities must go beyond the country’s current policies in order to be additional. However, fulfilling NDC targets might necessitate the adoption of new NDC measures beyond those currently in place.
Hence, a crucial consideration for developers of mitigation activities (as well as host countries) is whether a mitigation activity goes beyond what is necessary to achieve an unconditional NDC target.
Download Step-by-Step Guide
UNFCCC (2023) National strategies for using international carbon markets for NDC achievement
Climate Finance Innovators (2021): NDC conditionality and Article 6: An analysis of African countries’ updated NDCs
ECBI (2019): Pocket guide to NDCs under the UNFCCC
What can contractual agreements for Article 6 activities consist in?
To participate in Article 6, Parties have the option to set up various types of contracts to delineate the rights and obligations of the involved parties. The specific content of these contracts depends on the document’s purpose and the Parties preferences. In addition, contracts can be customised to particular circumstances, including the legal requirements of the involved Parties.
Parties can set up different types of contracts to delineate the rights and obligations of the involved parties. Five distinct types of contracts can be identified, each serving a unique purpose and possessing specific characteristics.
Download Information Note on Types of ContractsMitigation Outcome Purchase Agreements are established between two Parties, public or private sector. Well-prepared MOPAs can prevent multiple risks, such as overselling.
Download Information Note on MOPAsGGGI (2023): Mitigation Outcome Purchase Agreements
How do countries approach bilateral agreements?
Bilateral agreements can take many different forms. This segment presents three downloadable case studies, providing insights into the various types of bilateral cooperation a country can pursue as part of its Article 6 engagement.
Download Case Studies on Bilateral Agreements
UNEP-CCC (2024): Article 6 Pipeline
At what prices are credits traded?
Available data of ITMO prices is rather limited, reflecting the early stage of ITMO generation. For instance, JCM reports an average rate of USD 36 per tonne of CO2e (for 0.127 million ITMOs purchased), while the Switzerland’s KliK Foundation indicates a price of around USD 23.50 per tonne of CO2e (for a volume of 8.7 million ITMOs acquired). This diversity in volumes and prices highlights the varied nature and growth potential within the national carbon market landscape.
Download Information Note on ITMO pricing
CarbonCredits.com (2024): Live Carbon Price Today
Swedish energy Agency (2019): Pricing of Verified Emission Reduction Units under Art. 6 Gaining a Better Understanding of Possible Scenarios