In this report, Climate Advisers suggests policy structures to leverage Article 6 and natural climate solutions through international cooperation between two or more countries. We provide a guide for designing cooperative approaches through International Mitigation Partnerships using forests as an example.
The world is falling dangerously short of Paris Agreement’s goal of limiting warming to 2 degrees Celsius. As part of countries’ implementation of the Paris Agreement, natural climate solutions and cooperative approaches (under Article 6 of the Paris Agreement) offer two important tools for mitigation action that can greatly lower the emissions gap by 2030. Referred to in this paper as International Mitigation Partnerships, cooperation under Article 6 would comprise joint efforts between or among developed and developing countries undertaken as action under the Paris Agreement, and these partnerships could spur greater use of natural climate solutions.
Here, we suggest policy structures to leverage both Article 6 and natural climate solutions through international cooperation between two or more countries. We identify a typology of forms for International Mitigation Partnerships to assist both developed and developing countries in designing new mitigation partnerships. We also demonstrate how International Mitigation Partnerships focused on forests could support parties in areas beyond climate, such as strengthening regional and economic cooperation, achievement of Sustainable Development Goals, and conservation of biological diversity.
Simple Recognition of Results
The Simple Recognition of Results approach may also be described as performance-based bilateral aid. In the context of forests, the main purpose of this type of cooperation is to incentivize the host country to successfully implement REDD+ activities. The primary incentives are payments based on results achieved, measured in tonnes of CO2e and consistent with the Warsaw Framework for REDD+. In these arrangements, the source of finance usually comes from national government budgets, typically from donor countries who report the payments as public climate finance.
Bilateral Transfer Agreement: Example 1, Example 2
In a Credit-Based Bilateral approach, the ‘buyer country’ may foresee a need to rely on a certain volume of international credits to meet its NDC. Similarly, the buyer country may need to provide flexibility to its regulated emitters (such as states or power plants). Lastly, the buyer country may wish to purchase emissions reductions achieved abroad beyond its NDC to contribute to raising ambition and ‘closing the gap’; this could comprise a “Contingent International Contribution” as described in the accompanying Climate Advisers’ paper in this series. A ‘seller country’ may be willing to transfer all or a portion of achieved emissions reductions from REDD+ activities in exchange for a simple purchase, foreign investment and/or other support for economic development.
Pooled Demand Structure
A Multi-lateral Partnership approach allows donors and partners to share risk and centralized management of funds to support, and/or pay for results of, REDD+ activities.