2019 IETA The Economic Potential of Article 6 and Implementation Challenges

5This technical paper investigates the potential economic and environmental outcomes associated with the use of Article 6 of the Paris Agreement by participating countries.

 

The extent to which countries use Article 6, and how they use it, will be informed by design choices agreed upon by negotiators in forthcoming Conference of the Parties (COP) meetings. The authors use the Global Change Assessment Model (GCAM), an integrated assessment model, to quantify the economic potential of Article 6 and goes on to discuss real world considerations and potential implications of design choices currently under consideration by negotiators. The paper finds that Article 6 has the potential to reduce the total cost of implementing nationally determined contributions (NDCs) by more than half (~$250 billion/ year in 2030), or alternatively facilitate the removal of 50 percent more emissions from the earth’s atmosphere, (~5 gigatonnes of carbon dioxide per year [GtCO2/year] in 2030), at no additional cost. It concludes that the rules are critical. If written poorly, then rather than facilitate additional emissions reductions they could frustrate meeting current contributions and undercut progress.