23 February 2023

The interaction of Article 6 and NDCs: accounting challenges

Sofia Ordozgoiti

Research Associate

Finn O’Muircheartaigh

Head of Policy

9 min

The first Article 6 credits generated under the Paris Agreement framework are likely to be from project-based schemes, similar to those already available in the Voluntary Carbon Market. However, for the generation of Article 6 credits, their accounting treatments relative to country-level reporting will become increasingly important. Beyond assessing the project activity itself, a credit’s effectiveness will be dependent on the country’s broader NDC, including how well it is defined, how robust it is, and whether and at what pace the targets are achieved.

This paper discusses some of the accounting challenges with measuring national emissions and setting NDCs. It argues these challenges are a barrier to scaling the Article 6 market and that understanding and minimising information risk will be essential to growing the market.

Click here to download the summary report

Key Takeaways:

1. Article 6 credits must be additional to country efforts to meet their Nationally Determined Contributions (NDCs). Assessing Article 6 credits will necessarily mean analysing NDCs.

2. Different approaches to accounting for national emissions and setting climate targets make the process of analysing and comparing NDCs a particular challenge for the Article 6 market.

3. Understanding and minimising information risk will be key to assessing NDCs and scaling up the Article 6 market.

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The Voluntary Carbon Market and Article 6: Paths to Convergence?
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Shipping & the VCM: Charting a course for Paris Report
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25 November 2022
COP 27: Five takeaways on Article 6
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