Article 6 of the 2015 Paris Agreement on climate change enables parties to cooperate in implementing their nationally determined contributions (NDCs).
With regard to climate action, this is generally understood as cooperation being used to enable the participating countries to achieve more ambitious emission reduction targets.
Article 6.2 could be used in a situation where national or regional instruments such as the EU Emissions Trading Scheme (ETS) are linked with comparable systems in order to create a common, cross-border carbon market.
In contrast to the instruments used in direct bilateral cooperation, this mechanism is supervised by a body commissioned by the Conference of the Parties to the Paris Agreement (COP).
Both are being addressed in the current climate change negotiations which are shaped by differing political standpoints and numerous open issues concerning technical matters, structure, and design.
While some countries (such as Brazil and also the EU) call for Article 6 activities to be subject to stringent rules and monitored and overseen by a centralised institution, others (such as Japan, China, and India) would like to see greater flexibility.
[6] Differing standpoints exist as to the scope of applicability of the mechanism to promote climate action and support sustainable development contained in Article 6.4.
An element of progress has been made in this regard, for example with the identification of activities which could benefit from the approach, including the withdrawal of subsidies for fossil fuels.
At the climate change conference in Marrakesh in 2016 (COP22), Parties exchanged their views and opinions regarding the role of Article 6 and identified those areas in which a consensus had been reached and where a common understanding had still to be agreed.
[13] The submissions displayed a wide range of views, which challenged the negotiations on this issue at the UN Climate Change Conference in Bonn in November 2017 (COP23).
Although a large number of controversial topics and open issues remain even after the negotiations in Bonn, all the proposals are now available in written, structured form, showing where the key areas of consensus and contention are.
[7] Time is of the essence in this regard: in Marrakesh, it was agreed that the Paris Agreement rule book should be adopted at COP 24 at the end of 2018 (Decision 1/CP.22, para 12).