Are countries ready for Article 6? Is Article 6 ready for the countries?

The publication deals with the results of the workshop "Are countries ready for Article 6? Is Article 6 ready for the countries", which took place in Berlin on 7 December 2017 as the conclusion of a two-year research project on market mechanisms under the Paris Agreement. The project was carried out by adelphi in cooperation with the Öko-Institut and the NewClimate Institute for the German Emissions Trading Authority(DEHSt). The project team followed and analysed the international negotiations on market mechanisms from the signing of the Paris Agreement to COP 23 in Bonn in 2017. adelphi and its partners conducted country-specific case studies on Ukraine, Vietnam and Ethiopia to analyse the willingness of different countries to participate in the market mechanisms under the Paris Agreement and how existing barriers can be overcome through international cooperation projects.

Countries' willingness to implement market mechanisms after 2020 varies widely due to various national circumstances and infrastructures. Many countries face numerous challenges, including limited financial resources, lack of technical capacities and institutional structures, and a weak scientific data pool, in order to identify the reduction potential of different sectors.

How can international cooperation support countries and increase their market readiness? In addition to country-specific recommendations to promote cooperation with Ukraine, Vietnam and Ethiopia, the authors make some general recommendations. First, it is necessary to reduce uncertainty: Many countries do not even see the reasons for using carbon markets, as they have no vision of market mechanisms in the process of implementing their nationally determined contributions (NDCs) and long-term climate strategies. Secondly, technical assistance to developing and emerging countries plays a key role. The establishment of stable national systems based on data and scientific information to ensure robust accounting and the exchange of technical expertise on the ground would enable countries to use all types of market mechanisms in the future. Thirdly, the concentration of efforts on the further development of NDCs is crucial: while NDCs were originally developed politically and not always on a sound scientific basis, it is exceedingly important to identify the actual mitigation potential in order to utilize it through market mechanisms or results-based climate financing. Market mechanisms should support countries in actions that they are unable to carry out themselves.

The examination of the possibilities for various countries’ participation in market mechanisms after 2020, as well as the options for the international community to support countries in their readiness for market mechanisms, will continue to play an important role in the successful implementation of the Paris Agreement.