Options for fostering increasing ambition levels under the Paris Article 6.4 mechanism : discussion paper

Article 6 of the Paris Agreement establishes mechanisms for Parties to "pursue voluntary cooperation in the implementation of their nationally determined contributions to allow for higher ambition in their mitigation and adaptation actions [...]" (Article 6.1). I. e. the mechanisms are explicitly designed to foster higher ambition. However, without additional guidance and rules, the economic incentives of carbon markets may work against increasing host country ambition. For example, setting ambitious NDC targets may directly reduce the amount of mitigation outcomes that go beyond the NDC target and that a host country can transfer abroad. The report presents four options on how the risks can be ad-dressed and ambition can be increased: (1) Strengthening reporting, transparency and comparability; (2) Reconciling the design of the Article 6.4 mechanism with ambition raising of host countries; (3) Supporting the host country to raise ambition through the Article 6.4 mechanism; (4) Fostering the acquiring country to raise ambition through the Article 6.4 mechanism. These options are assessed and recommendations are provided on how they could be implemented.