COP27: Growing interest in carbon market cooperation under Paris Agreement Article 6

Cooperation through international carbon trade has the potential to raise climate ambition and support sustainable development – if executed consciously. The Paris Agreement rulebook adopted at COP26 in Glasgow provides a robust framework for high-integrity carbon markets and cooperation. On 11 November, Decarbonisation Day, at the Nordic pavilion, Nefco together with the Swedish Energy Agency, UNEP Copenhagen Climate Centre and Wuppertal Institute arranged a discussion on how Article 6 implementation actually can raise ambition and support sustainable development.

The Nordic countries and partner organisations have played a pioneering role in supporting ambitious climate action and sustainable development in developing countries and promoting carbon market activities around the world for over twenty years.

We are currently heading towards a three-degree world, so “we need to do everything in our power to move forward,” Niklas Hagelberg, Senior Programme Management Officer, Global Coordinator, Climate Change at UN Environment Programme, said in his opening speech. “The Article 6 mechanism provides an opportunity to move forward and support the transformation of all sectors: energy, industry, transportation, building, agriculture and forestry,” Hagelberg continued. The UNEP mission gap report 2021 estimates that Article 6 of the Paris Agreement can help reduce the implementation costs of countries’ Nationally Determined Contributions (NDCs) by 40-60%.

The Nordic framework, developed as part of the Nordic Initiative for Cooperative Approaches (NICA), was presented by Ash Sharma, Vice President at Nefco and moderator of the event. Sharma highlighted that raising ambition is critical and that Article 6 and partnerships will play a key role.

The first session of the event looked into approaches to implement Article 6 and to support sustainable development. The second session looked at existing sustainable development tools, how they promote sustainable development and the interlinkages with Article 6 mechanism.

Sweden has been supporting carbon markets for over 20 years and is currently cooperating with the Dominican Republic, Nepal and Ghana to develop the first Article 6 piloting projects. Sandra Lindström, Head of International Climate Cooperation at the Swedish Energy Agency, commented that she is “pleased to see that more countries are showing interest in Article 6 cooperation” and “believes the potential of implementing the Article 6 mechanism will increase as the private sector now starts to show its interest in the tool”.

Ingvild Solvang, Deputy Director, Head of Climate Action and Inclusive Development at the Global Green Growth Institute (GGGI), commented during the discussion that Article 6 is a way of mobilising financing for developing countries to enable their transition to the use of renewable energy and promote sustainable development.

Representatives from Nepal and the Dominican Republic also attended the discussion, and we learned from Nathalie Flores, Director of Adaptation and Climate Change Mitigation at the Ministry of Climate and Sustainability, that the Dominican Republic is aiming for net zero emissions by 2050 and the Article 6 is an important tool in helping the country reach this goal. Flores further explained the need to take the private sector to the next level and include smaller companies, which can be done through work with Article 6.

For further information

See the event page for more information and the event recording on Nefco’s YouTube channel.

For more information about Nefco’s work on implementing the Article 6 mechanism see:

For further information, please contact:

Ash Sharma, Vice President of Special Funds at Nefco, +358 10 618 06 53

Kari Hämekoski, Senior Programme Manager at Nefco, +358 10 618 0660

Lia Oker-Blom, Senior Communications Officer at Nefco, +358 10 618 06 7

About the Nordic Initiative for Cooperative Approaches (NICA)

Together with the Nordic countries and the Nordic Council of Ministers, Nefco, established the Nordic Initiative for Cooperative Approaches (NICA) in 2018. The initiative is currently seeking to operationalise international market-based collaboration under Article 6 of the Paris Agreement to support sustainable development and encourage more ambitious climate action through capacity building via practical pilot activities. Read more

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