Article 6 of the Paris Agreement

1st Authorization Working Group ofthe Paris Agreement Article 6 Implementation Partnership
AUTHORIZATIONMarch 2023

Overview
 Context
 Authorization provisions
 Authorization types
 Article 6.4 authorizations
 Evolution in the discussions
 Authorization lifecycle
 Authorization elements
 Work-programme on authorization

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 The first ITMO/s authorized set the deadline for initial report submission
 An authorization has a timeframe, maybe 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 markets 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))
 In addition, many provisions include references to authorization, include how to report it,
track and review it.
 Participation requirements include arrangements in place for authorizing theuse of ITMOs 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)

Discussions on aspects relevant to authorization
 Authorization broadly has two phases – in relation to use/s of ITMOs, each stage may involve: Decision to authorize – considerations, among others, of pathways towards meeting
NDC targets in the context of long-term low-emission development strategy and Parisalignment (domestic focus)
 Managing an authorization – considerations, among others, all of the above andimplications for counterparts and market participants (domestic and international focus)

Authorization window for use of ITMOs for OIMP
Authorization

ITMO
lifecycle

Mitigation Outcome
Not an ITMO: no reporting as per 6.2

TransferUse

ITMO: Reporting mandatory as per 6.2

Discussions on aspects relevant to authorization
Theme

IssueIssuer• The first-transferring Party authorized use/s of ITMOs (explicit in Article 6.4)

Timing• At what point of the ITMO life use towards NDC can be authorized?

Authorization scopeand informationelements• Does an authorization apply to all ITMOs from a cooperative approach equally?
• Can a Party issue multiple authorizations for ITMOs and if yes, how are theITMOs identified?
• What authorized entities are enabled to do, e.g. can an authorized entities
handle any ITMOs?
• Does Article 6.4 activity approval serve as an Article 6.2 authorization of acooperative approach?

Method ofauthorization• How is authorization information recorded in a registry?
• What tools can support authorization?

Possible changes• What can be changed about an authorization?
• Can authorization of use/s be issued/changed/revoked after internationaltransfer?

Reporting• How information on authorization is reflected in reports and made public?

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 of
the RMPs)