In our view, this marks a shift from the decisions at COP26, which created the option for credits that are correspondingly adjusted to be used in the voluntary market (alongside those that are not adjusted) but did not provide any obvious signal or judgement on how these are used or claimed. But one has to work hard, in our view, to overlook the intention by at least some Parties to direct voluntary use of these credits towards claims to have contributed to reduced emission levels in the host Party, and not claims to have offset. The text is not, as explained above, definitive on the use of non-adjusted credits. The fact that the new crediting mechanism established by Article 6.4 will include both credits that will be correspondingly adjusted by their project’s host country, and credits that will not be adjusted, was built into the rules and modalities adopted at COP26, as we explained in our post-COP26 reflections. This addition means that users of mitigation contribution A6.4ERs are not solely confined to the use cases that are explicitly spelled out but seem able – unless this is later ruled out at a national level or under other frameworks - to claim these credits towards other uses.Īnd a final point of clarification: the decision at COP27 does not create a ‘new type of credit’, as some have stated. It is also notable, in our view, that the list did not include ‘offsetting’.Īt the same time though, the text includes an important term: ‘inter alia’, meaning ‘amongst other things’. It is notable that governments decided – and were able to agree collectively - to spell out this list of possible use cases. These are all examples that are widely considered as reasonable uses of credits that will contribute to emission reductions in the host country. The second is the explicit inclusion of three possible use cases for ‘mitigation contribution A6.4ERs’: results-based climate finance, domestic mitigation pricing schemes, or domestic price-based measures. It is not unreasonable to read the fact that governments included this word – and indeed the fact that they decided to name the units at all – as an intentional act, in particular when combined with a reference to these credits having the purpose of ‘contributing to the reduction of emission levels in the host Party’. This name matters as the term ‘contribution’ is closely associated with the debate over the past few years about whether credits that count towards a host country’s NDC can be used to ‘offset’ a buyer’s emissions, or if the buyer should instead make a ‘contribution claim’, sometimes described as a ‘financing claim’. This name is ‘mitigation contribution A6.4ERs’. In other words, credits for which the host country will not apply a corresponding adjustment. There are three important elements of this text.įirst, it provided a name for Article 6.4-issued credits that are not authorised for use towards NDCs or for other international mitigation purposes.
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