The regulator of the new UN carbon crediting mechanism under Article 6 of the Paris climate agreement decided on key rules this week, adopting an "agile" approach to difficult issues to allow the rules to adapt to "ever-evolving developments in addressing climate change".
The Article 6.4 supervisory body decided at its meeting this week in Baku, Azerbaijan, to adopt standards on methodologies and greenhouse gas (GHG) removals open to additional guidance by parties at the UN Cop 29 climate conference in Baku next month.
This will allow the supervisory body to review and further improve the standards "whenever necessary" and to "keep up with market developments", it said. The body has requested that the parties meeting at Cop 29 to endorse this approach.
The standards will help project developers create and submit methodologies for their projects, to allow them to be registered under the new Paris Agreement Crediting Mechanism (PACM), the group said.
Article 6 takes a bottom-up approach to methodologies, allowing project developers to draw up their own methodologies provided they comply with the standard.
The standard includes principles such as the downward adjustment of GHG mitigation paths to "encourage ambition over time" and the selection of a baseline against which the mitigation is measured that is below business-as-usual levels. It also includes provisions for equitably sharing the mitigation benefits between the participating countries. This could also be achieved through applying the so-called Sustainable Development Tool adopted at the meeting.
The tool, a key objective of which is to set apart the PACM from its predecessor the clean development mechanism's indifference towards environmental and human rights, will require all participants to assess, demonstrate and monitor the environmental and human rights impacts of their projects.
Activity participants must also notify the supervisory body of any potential reversal of the achieved mitigation within 30 days of becoming aware of the event. The supervisory body will establish a Reversal Risk Buffer Pool Account in the mechanism registry to compensate fully for avoidable and unavoidable reversals, by cancelling an equivalent amount of buffer Article 6.4 emissions reductions.
The supervisory body has tasked experts on the so-called Methodological Expert Panel with continuing their work on various unresolved principles, such as developing a tool for assessing the reversal risk of removals, including the possible application of upper limits and specific risk factors.
The supervisory body did not look into the issue of registries at this week's meeting, considered another tricky issue among several outlined by UK department for energy security and net zero head of carbon markets negotiations Dexter Lee at a conference in London this week. But speakers at the event noted a renewed willingness to agree on Article 6 rules this year.
