Paris Agreement

Crediting Mechanism

Newsletter

10 October 2024

In this issue: News from SBM014


  • Key standards for UN carbon market finalized ahead of COP29
  • Mandatory environmental and human rights safeguards agreed for UN crediting mechanism
  • Procedure agreed for the performance monitoring of Article 6.4 designated operational entities



Key standards for UN carbon market finalized ahead of COP29

In meetings held on the heels of Pre-COP in Baku, agreement was reached on crucial standards to operationalize a new UN crediting mechanism ahead of COP29.  


The Article 6.4 Supervisory Body, responsible for creating the UN carbon market under the Paris Agreement, adopted standards for methodologies and greenhouse gas removals. Known as the Paris Agreement Crediting Mechanism, this new UN mechanism is designed to facilitate international collaboration in reducing greenhouse gas emissions and combating climate change. 


The standards agreed are seen as essential in making the mechanism fully operational. The Supervisory Body also agreed on recommendations to be reviewed at the upcoming COP29 climate summit. 


New approach to COP29 recommendations 

The Supervisory Body took a different approach to its recommendations to the Parties to the Paris Agreement (CMA). 


To ensure the mechanism can remain agile and adapt to ever evolving developments in addressing climate change, they adopted the elements requested by the CMA as ‘Supervisory Body standards’ and requested the CMA to endorse this approach and provide any additional guidance.  


This allows the Supervisory Body to review and further improve these standards whenever necessary. 


Standards adopted 

During the five-day meeting, intense discussions focused on two key standards: 



Both standards are now Supervisory Body documents, meaning they can be updated to keep up with market developments. 


These standards will help project developers create and submit methodologies for their projects, to allow them to be registered under the new Paris Agreement Crediting Mechanism.  


Maria AlJishi, Chair of the Article 6.4 Supervisory Body said:

"These new standards are a key element in our effort to deliver a crediting mechanism that is fit for the future. As the only crediting mechanism directly responsible to Parties and mandated by the Paris Agreement, we are committed to ensuring it balances the needs of achieving the Paris goals, supporting market players, and addressing host country interests.  


The adoption of these standards marks a major step forward in enabling a robust, agile carbon market that can continue to evolve.” 


Martin Hession, Vice-Chair of the Article 6.4 Supervisory Body said:

“Some of the highlights of these standards include the alignment of baselines with Paris Goals through downward adjustment, an additionality test that excludes projects that would lead to lock-in of unsustainable levels of emissions, and a shift to cover the risk of reversal for all risks with a buffer pool.  


We are also exploring alternative methods to compensate for any reversals, as well as potential upper limits to acceptable risk.  


It’s all about getting the balance right — protecting the integrity of the Paris agreement, driving the necessary climate ambition, while balancing the interests of all market stakeholders and host parties.” 



Mandatory Environmental and Human Rights Safeguards Agreed for UN crediting mechanism

The Body mandated by the Paris Agreement to set up a new UN carbon market has agreed mandatory environmental and human rights safeguards early into a five-day meeting in Baku.


These protections will require those participating in the UN’s Paris Agreement Crediting Mechanism to identify, evaluate, avoid, minimize and mitigate potential risks associated with projects.​


The new rules mean environmental and social rights will be protected through a mandatory tool - known as the Sustainable Development Tool - that assesses and monitors project impacts throughout their lifespan.



Find out more

Procedure agreed for the performance monitoring of Article 6.4 designated operational entities

At their 14th meeting, the Article 6.4 Supervisory Body agreed a new procedure for the performance monitoring of designated operational entities under the Paris Agreement Crediting Mechanism.


A designated operational entity (DOE) is an independent auditor that validates project proposals or verifies whether projects have delivered planned greenhouse gas emission reductions.


With this procedure agreed, all of the necessary elements are now in place for accreditation under the Article 6.4 mechanism. This is positive news for entities interested in becoming an Article 6.4 DOE, with approximate 10 entities currently in different stages of assessment to become accredited.



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