How will Article 6 allow countries to meet climate targets?

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Article 6 Provides Frameworks for International Carbon Credit Trading to Help Countries Meet Climate Targets

Article 6 of the Paris Agreement outlines mechanisms for countries to achieve their climate targets through the trading of carbon offset credits. This framework facilitates international cooperation by allowing nations to invest in emissions reduction projects in other countries and claim those reductions towards their own climate goals. The proposed rules aim to ensure that these emissions cuts are real and accounted for, preventing "double counting" where a single emissions reduction is claimed by both the host country and the purchasing country.
Taxing Carbon Trades for Adaptation Fund

A key element of the proposed Article 6 rules involves a two-track approach to taxing carbon trades. While bilateral trades of offset credits directly between countries will not be taxed, a separate centralized system for issuing offsets will collect 5% of proceeds. These funds are designated to support an adaptation fund for developing countries, addressing their needs in the face of climate change impacts.
Cancellation of Credits to Enhance Emissions Reductions

Within the centralized offset issuance system, 2% of the created carbon credits will be cancelled. This measure is designed to bolster the overall effectiveness of emissions reductions by ensuring that these credits are not used by other countries to meet their climate targets, thereby increasing the net climate benefit.
Carry-over of Existing Carbon Credits

The new offset market system will permit carbon credits registered under the Kyoto Protocol since 2013 to be carried over. This provision allows for approximately 320 million existing offsets, each representing one tonne of CO2, to enter the new market, though some campaigners have raised concerns about the potential for market flooding and the climate integrity of older credits.
Preventing Double Counting of Emissions Reductions

To address the contentious issue of "double counting," the new proposal mandates that the country generating an offset credit must authorize its sale to another nation for use towards their climate targets. If authorized and sold, the seller country will add an emission unit to its national inventory, while the buyer country will deduct one. This process ensures that each emissions reduction is counted only once between the two countries involved.

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How will Article 6 allow countries to meet climate targets?

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