Article 6 of the Paris Agreement

2nd Authorization WG of the Paris Agreement Article 6 Implementation
Partnership

September 2023

Overview➢ Context➢ Authorization types➢ Authorization types➢ Article 6.4 authorizations➢ Work programme on authorization➢ Open issues in authorization➢ Authorization types➢ Content of authorization➢ Changes and Revocation of Authorizations➢ Expected outcomes for CMA 5

Context➢ The authorization is the gateway to Article 6 market-based instruments and represents:➢ A decision to be a Party participating in a cooperative approach;➢ The “birth” of an ITMO;➢ The ticket for entities to the system.
➢ Authorization delivers clarity, stability and predictability for the system➢ It carries obligations for corresponding adjustments by the host Party and thus underpins theaccounting integrity of the system

Context➢ The first authorization made by a Party sets the deadline for initial report submission➢ An authorization has a timeframe, may be subject to changes and so it has a lifecycle with possible
changes having varied and wide implications for the operationalization of the guidance and the RMPs
but also on domestic processes and the international market overall

Authorization types➢ Three authorization types for:➢ A cooperative approach (2/CMA.3, annex, para 18(g))➢ ITMOs from a cooperative approach for use/s (2/CMA.3, annex, para 1(d) and 1(f))➢ Entities (2/CMA.3, annex, para 18(g))➢ Participation requirements include arrangements in place for authorizing the use ofITMOs towards achievement of NDCs pursuant to Article 6, paragraph 3➢ The Article 6.4 mechanism has a distinct approval and authorization process, alignedwith Article 6.2 guidance (3/CMA.3, annex, para 40, 41, 42 and 45; 7/CMA.4 , annex I, para 26)

Work programme on authorization in 2023
Reference

MandateArticle 6.2: decision
6/CMA.4, para 17(b) –SBSTA recommendations

The process of authorization pursuant to decision 2/CMA.3, annex,
paragraphs 2, 18(g) and 21(c), notably the scope of changes toauthorization of ITMOs towards use(s), and the process for managing
them and for authorization of entities and cooperative approaches with aview to ensuring transparency and consistency;

Article 6.2: decision
6/CMA.4, para 4 –SBSTA recommendations

Finalizing the agreed electronic format which includes infromation onauthorization, including changes to authorization

Article 6.4: decision
7/CMA.4, para 9(c) –SBSTA recommendations

Provision of a statement by the host Party to the Supervisory Body
specifying whether it authorizes A6.4ERs for use towards NDCs and/orfor OIMP, including its timing, relevant information on the authorization
and any revisions (pursuant to paragraph 42 of the RMPs)

Article 6.4: decision
7/CMA.4, Annex I, para 26 –Supervisory Body

Modalities for host Parties and other participating Parties providing
authorization of activity participants (pursuant to paragraphs 41 and 45 ofthe RMPs)

Open issues in authorization➢ Authorization Type:➢ General authorization: Pertains to the cooperative approach level, outlining the terms underwhich ITMOs or entities are to be authorized within that cooperative approach.
➢ Specific authorization: Required for individual cooperative approaches, ITMOs, and entities.

➢ Content of Authorization:➢ Either meet minimum requirements as set by guidelines or no minimum requirements at all.

➢ Changes and Revocation of Authorizations:➢➢➢➢

Can authorizations be revoked, or changed based on specific scopes and circumstances?
Are there constraints, if any, regarding the extent of possible changes.
Who needs to agree on the change or revocation?
Timing of authorizations is important.

MOgeneration

use or cancelation

use or cancelation
Authorization

First international transfer

Expectations for CMA 5➢ Process of Authorization: Clarity on how authorizations are granted.
➢ Content of Authorization: Clarity on the requirement of the minimum content, if any.
➢ Changes: Clarity on the changes of authorizations, considering how, when, which, and underwhat assumptions they can be changed.

➢ Revocation: Clarity on the conditions and circumstances under which authorizations can berevoked, if any.