CCS Under Article 6 of the Paris Agreement

12 Pages Posted: 22 Nov 2022 Last revised: 28 Nov 2022

Date Written: November 21, 2022

Abstract

Article 6 of the Paris Agreement establishes the foundation for international carbon markets by allowing Parties to cooperate to achieve their nationally determined contributions (NDCs). Article 6.2 of the Paris Agreement signals the opportunity for voluntary approaches by using internationally transferred mitigation outcomes (ITMOs) towards achieving NDC targets, while Article 6.4 establishes a mechanism to contribute towards greenhouse gas (GHG) emissions mitigation while fostering sustainable development. One of the most significant features of the agreed rules for Article 6 is the application of ‘corresponding adjustments’ to avoid double counting of ITMOs and other transferred units by both host and recipient country.
The Paris Agreement embeds the concept of ‘net zero’ by calling for a balance between anthropogenic emissions of GHGs and removals of GHGs by sinks to be reached in the latter part of this century. All signatory Parties therefore tacitly acknowledge that meeting the Agreement’s ambitious climate change mitigation goals relies not only on deep cuts in anthropogenic GHG emissions, but also on the offsetting of residual, hard-to-abate, GHG emission sources through significant increases in carbon removal from the active climate system and the storage of CO2 in enhanced sinks and reservoirs. In these respects, Article 6 potentially offers a variety of routes to incentivize CO2 capture and storage (CCS). These include through the trading of units based on the avoided emissions or removals resulting from technological capture of CO2, or also other potentially more novel means of cooperation that focus more specifically on carbon storage. Experience with the former over the past 15 years or so has highlighted some of the challenges posed for CCS when the incentive is focused solely on the point of capture, as is the case for emissions trading or removals. An alternative but complementary method is to establish markets that incentivize storage activities alongside and complementary to carbon pricing policies, which are discussed in this paper.
In order to assess the status and outlook for Article 6 with a focus on CCS activities, we define three potential models for cooperation and undertake a comparative evaluation against the key criteria of effectiveness, environmental integrity, commercial and financial viability, progression and policy performance. We conclude with some observations regarding the factors that may influence the likelihood of these different market models evolving over coming years.

Keywords: Paris Agreement, Article 6, Carbon Markets, Carbon Storage Units

Suggested Citation

COOK, GREGORY and Zakkour, Paul and Dixon, Tim and Neades, Samantha, CCS Under Article 6 of the Paris Agreement (November 21, 2022). Proceedings of the 16th Greenhouse Gas Control Technologies Conference (GHGT-16) 23-24 Oct 2022, Available at SSRN: https://ssrn.com/abstract=4282891 or http://dx.doi.org/10.2139/ssrn.4282891

GREGORY COOK (Contact Author)

Carbon Counts ( email )

Norfolk
United Kingdom

Paul Zakkour

Carbon Counts GmbH ( email )

Feuerbachstraße 38
Frankfurt am Main, 60325
Germany
06979302833 (Phone)

HOME PAGE: http://www.carbon-counts.com

Tim Dixon

IEAGHG ( email )

Hatherley Lane
Cheltenham, GL51 6SH
United Kingdom

Samantha Neades

IEAGHG ( email )

Hatherley Lane
Cheltenham, GL51 6SH
United Kingdom

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