Countries need to agree on a way to ensure a “general reduction” in the market. However, it was not agreed on which of the three types of procurement (6.2, 6.4 and 6.8) would be subject to this principle. The text of the Paris Agreement contains only Article 6.4 of this objective. The more progressive negotiating blocs argue that all markets must adhere to this principle, otherwise the system will be distorted. To finalise the settlement, negotiators must navigate a thicket of impenetrable jargon, a series of technical accounting challenges and traps of “constructive ambiguity” in the text, often hiding incompatible visions of how Article 6 should work and what it was created for in the first place. The three distinct mechanisms – referred to in Articles 6.2, 6.4 and 6.8 – have all become part of the Paris Agreement in recognition of the different interests and priorities between the parties to the Agreement. These differences remain and will need to be replaced again if the rules referred to in Article 6 are to be agreed. The current negotiating text includes various “baseline” tests to ensure additionality, including an option with square brackets that could set the bar as a measure that goes beyond what the host country needs to meet its climate commitment (NDC). Although the text of the Paris Agreement is not under consideration, Article 6 is only two pages long and does not describe how these systems will work and what rules will ensure that they lead to real emission reductions. The precise approach to avoid emission reductions by more than one country is an area where there are significant differences of opinion.
It is closely related to the idea of double counting under Article 6.2, with both raising questions about what is considered “inside” as “outside” the scope of a country`s NDC, as some liabilities cover only part of the economy. As a third option, Article 6(8) allows the use of non-market-based approaches. As the name suggests, the market mechanisms of climate change play no role in this approach. “There can be no double counting of emission reductions and there can be no hot air production. In this context, we cannot support a transfer of credits or allowances from the Kyoto Protocol before 2020, which would undermine what we want to achieve with the Paris Agreement. They expect future demand for offset credit to be fairly stable regardless of price, with systems like Corsia also having to use them at higher prices. The nature of the “internationally transferred mitigation outcomes” (ITMOs) referred to in Article 6(2) is being debated, with some countries wishing to decide for themselves what to do and others wanting all emissions trading to be measured in tonnes of CO2. .