Abstract:

In order to avoid double counting of emission reduction benefits, the market mechanisms established in Article 6 of the Paris Agreement, including the cooperation approaches referred to in Article 6.2 and the Article 6.4 mechanism, require corresponding adjustment of the emissions of participating Parties. The Glasgow Climate Change Conference adopted guidance for the implementation of the Article 6 mechanisms, including specific requirements for corresponding adjustment. For participating Parties that have a single-year Nationally Determined Contributions (NDC), the guidance provides two corresponding adjustment methods: the averaging approach and multi-year emissions trajectory approach. The averaging method is more concise and convenient in operation, allowing the Parties to achieve their NDC goal with a more flexible emissions path, while the multi-year emissions trajectory approach reduces the uncertainty in achieving NDC goal, and is less affected by the allowance banking and borrowing rules of emissions trading system (ETS). The analysis of China’s NDC target and possible future emission paths shows that the averaging method is more suitable for China. It is suggested that preparations should be carried out for China’s participation in the market mechanisms under Article 6 from the following aspects: quantifying NDC mitigation target, tracking NDC progress, and establishing a system for tracking and reporting Internationally Transferred Mitigation Outcomes (ITMOs) transactions.

Key words: Paris Agreement, Market mechanisms, Corresponding adjustment