Allolio, Friederike et al.: Article 6.4 of the Paris Agreement and the private sector – Utilising the potential of private sector engagement through the Paris Rulebook. IKEM Policy Paper. 2021.
Art. 6 of th Paris Agreement (PA) provides for various voluntary options for Parties to jointly implement their nationally determined contributions (NDCs).
The negotiations on Art. 6 PA, especially regarding the market-based provisions of Art. 6.2 PA and Art. 6.4 PA, are still highly contentious. So far, Parties have been unable to reach an agreement on several political and technical issues.
However, countries will not be the only stakeholders potentially participating in international carbon markets: Article 6.4 PA explicitly acknowledges the need to incentivise and facilitate the participation of private entities in the mitigation of greenhouse gas emissions (GHG). This policy paper provides recommendations on how the rulebook for Art. 6.4 PA can be designed to best enable private sector engagement without putting environmental integrity at risk.