Article 6.2 of the Paris Agreement

Article 6.2 of the Paris Agreement

Provisions of the Article 6.2 of the Paris Agreement

Article 6.2 of the Paris Agreement allows countries to trade emissions reductions/removals of greenhouse gases with each other through bilateral or multilateral agreements. Such tradable carbon credits are called Internationally Transferred Mitigation Outcomes (ITMOs). They can be measured in terms of carbon dioxide equivalent (CO2e) or using other metrics, such as kilowatt-hours (KWh) of renewable energy.

The mechanism for trading ITMOs is operational, and countries are already entering agreements and establishing a system for implementing climate projects and counting carbon credits for Nationally Determined Contributions (NDCs). Contributions can only be fulfilled with the help of ITMO issued during the period of validity of these contributions.

The rules of Article 6.2 of the Paris Agreement aim to reduce the risk of double counting through “corresponding adjustments”. To achieve this, the selling country deducts the carbon credits from its greenhouse gas registry, while the buyer accounts for them to meet its climate goals.

Countries independently determine the environmental. social guarantees and other essential criteria for ITMOs (baseline, additionality). Therefore, climate projects under Article 6.2 may include those under Article 6.4 of the Paris Agreement and within the framework of voluntary carbon standards.

A group of expert reviewers, consisting of UN technical specialists, only analyzes the presence of information in countries’ reports regarding environmental and social guarantees without providing an assessment of their strictness. Additionally, some (or possibly all) information on bilateral agreements and carbon credits under Article 6.2 of the Paris Agreement may be classified as “confidential” without justification.

Japan-Moldova Agreement on Implementation of Climate Projects under The Joint Crediting Mechanism (JCM)

General Principles of The Joint Crediting Mechanism (JCM)

Japan intends to reduce greenhouse gas emissions by 46% in the fiscal year 2030 compared to the 2013 fiscal year, setting an ambitious target in line with the long-term goal of achieving net-zero emissions by 2050. Furthermore, Japan will strive to achieve by 2030 an even higher goal—a 50% reduction in emissions.

The implementation of International climate projects equivalent to 100 million tons of CO2 is planned by the fiscal year 2030. Both public and private financing are permitted for the implementation of these climate projects.

Japan plans to achieve its set targets through The Joint Crediting Mechanism (JCM), which serves as an instrument under Article 6.2 of the Paris Agreement.

Source: https://www.jcm.go.jp/

Implementation Scheme of Climate Projects under JCM:

  1. A bilateral agreement on the implementation of JCM is signed between Japan and the country.
  2. The Joint Committee (JC) is formed, comprising representatives from the governments of both countries. The JC develops rules and guidance for the implementation of JCM in the specific country.
  3. The JC approves or rejects proposed methodologies for the implementation of climate projects.
  4. The JC identifies validation/verification bodies.
  5. The initiator of the climate project submits a concept note to the JC for evaluation.
  6. The initiator/the JC of the country proposes a methodology for the implementation of the climate project for approval by mutual decision of the JC.
  7. The initiator of the climate project develops project documentation for the implementation, including forecasts for reducing/absorbing greenhouse gas emissions.
  8. Project documentation undergoes validation.
  9. The JC registers the climate project.
  10. The initiator implements the climate project, monitors emissions reductions/removals, and prepares a monitoring report.
  11. The monitoring report undergoes verification.
  12. Based on verification results, the JC determines the quantity of carbon credits to be issued, distributing them among the countries.
  13. Governments of the countries issue carbon credits in their own registries.

Implementation stages of JCM in Moldova:

On July 13, 2022, a delegation from the Republic of Moldova held a bilateral meeting with the delegation from Japan, discussing the experience of implementing Clean Development Mechanism (CDM) projects of the Kyoto Protocol in Moldova’s heat and power sector, as well as the possibility of implementing projects under JCM.

On September 6, 2022, Japan and Moldova signed a memorandum of understanding for the implementation of JCM.

From November 6 to 18, 2022, within COP 27, the Moldovan delegation participated in negotiations on Article 6.2 of Paris Agreement, the Adaptation Program, and the 8th high-level meeting of JCM signatory countries.

In February 2023, the Moldovan delegation participated in the global JCM meeting, held bilateral meetings with representatives from the Ministry of the Environment, the Forest Agency of Japan, the International Environmental Cooperation Center, the Global Environment Centre, and private companies involved in JCM projects.

In September 2023, the Ministry of the Environment of Moldova held a working meeting to discuss the possibility of implementing JCM projects. The company “SDG Impact Japan,” together with the Moldovan company “Zernoff,” initiated a feasibility study for using ethanol production waste for electricity generation. The feasibility study is planned to be completed by the end of 2023, and the JCM project proposal will be submitted to the Ministry of the Environment and the Joint Committee in accordance with established requirements.

On November 10, 2023, the Ministry of the Environment of Moldova, in collaboration with the Embassy of Japan in Moldova, conducted a seminar on “Facilitating the Implementation of the Joint Crediting Mechanism (JCM) in Moldova – Contribution to Moldova’s Decarbonization through JCM.”

On January 18, 2024, the Mutual Learning Program for Increasing Transparency (MLP) for the preparation of biannual transparency reports (BTR) ended. The program was supported by the Ministry of the Environment of Japan and other organizations and included the participation of the member countries of the Joint Credit Mechanism (AXIS) from Central Asia and the Caucasus.