The VCM and the Article 6 of the Paris Agreement
As explained in Lesson 2, Article 6 of Paris Agreement provides a framework that allow internationally voluntary cooperation between the Parties and the use of market mechanisms that facilitate the development of emission reduction activities.
Although the governing bodies of Paris Agreement have no jurisdiction under the VCM, there is a connection between both, since the VCM can provide great assistance in supporting countries to achieve their Nationally Determined Contributions (NDCs) under the Paris Agreement. However, in order to do that, the VCM projects and activities will be required to comply with the rules established by the Paris Agreement.
Article 6.2 authorizes the transfer between Parties of emission reductions between countries as Internationally Transferable Mitigation Outcomes (ITMOs); this requires to apply Corresponding Adjustments to avoid double counting. On the other hand, Article 6.4 defines a UN-regulated carbon trading mechanism between the Parties, which could be a revised and improved version of the Clean Development Mechanism.
This allows host countries to include VCM activities under an Article 6 approach. Therefore, the emission reductions could be authorized, requiring corresponding adjustments, to be used toward a Nationally Determined Contribution (NDC), CORSIA, compliance, and voluntary transactions. In addition, host countries could define more purposes to use the non authorized mitigation outcomes, such as domestic schemes or voluntary transactions.