COP 29 Endorsement of vessels on some key building blocks of a new global carbon market

On opening day, Baku scored what it saw as an early goal by forcing countries to adopt rules on some of the key building blocks of the UN's new Article 6.4 global carbon market, which last month accepted supervisory body of the mechanism.

This document presents a proposal for a sustainable development instrument to be used under the mechanism set out in Article 6, paragraph 4 of the Paris Agreement. The aim of the tool is to ensure that projects and programs within this mechanism do not harm the environment and support sustainable development and the 17 goals of sustainable development. The document describes in detail the process of assessing risks and impact on the environment and society, as well as monitoring and reporting results in accordance with the requirements for sustainable development. The proposal of the instrument was submitted to the supervisory body of the mechanism in Article 6, paragraph 4 and, after a comment procedure, it is expected to be approved and start to be applied in 2024.

Short summary of the document "Instrument for sustainable development according to Article 6.4"

This document presents a revised draft of the Instrument for Sustainable Development under Article 6.4 (hereinafter referred to as "Instrument A6.4 SD"). The main objective of this instrument is to ensure that projects and programs of activities under Article 6.4 of the Paris Agreement (hereinafter referred to as "A6.4 activities") promote the principle of "do no harm", promote sustainable development and contribute to the 17 Sustainable Development Goals (SDGs)..

Development and approval of the A6.4 SD Tool

The A6.4 SD tool was developed gradually based on instructions from the supervisory authority of the Article 6.4 mechanism. During this process, the comments of stakeholders and other relevant instruments and systems of safeguards used in existing market-based mechanisms were taken into account. Instrument A6.4 SD is expected to be approved at the fourteenth meeting of the Supervisory Authority in 2024.

Using the A6.4 SD Tool

Use of the A6.4 SD Tool is mandatory for all proposed A6.4 activities, including Clean Development (CDM) activities that seek to transition to the Article 6.4 mechanism. The tool provides a structured approach for activity participants to:

• They carried out a risk assessment in order to identify risks and potential impacts, evaluate them and, if necessary, avoid them. Where risks cannot be completely avoided, A6.4 SD instructs participants to minimize impacts and mitigate any remaining negative environmental and social impacts and risks by establishing environmental and social indicators at the activity level.
• They identified and assessed potential positive and negative impacts on the 17 Sustainable Development Goals (SDGs) and priorities of sustainable development of the host country and set indicators for monitoring sustainable development at the level of activities.
• They monitored and reported the monitoring results against the established environmental and social indicators and indicators of sustainable development at the level of activities.

Structure of the A6.4 SD Tool

The A6.4 SD tool is divided into three key parts:

• Environmental and social protection measures: This part focuses on the elements and criteria that serve as a basis for the participants of the activities to identify, evaluate, prevent, minimize and mitigate the potential negative environmental and social impacts and risks that may arise during the implementation and operation of the activity A6.4.
• Impacts on sustainable development: This part focuses on identifying the positive and negative impacts of activity A6.4 on the sustainable development of the host country.
• Validation and verification: These parts set out additional requirements for the validation and verification standards of the Article 6.4 mechanism for projects and programs of activities that Designated Operating Entities must take into account during the validation and verification phases.

Stakeholder engagement

Stakeholders may submit comments and questions regarding compliance with the A6.4 SD Tool during local stakeholder consultations and global consultations prior to registration of the A6.4 activity. After registration of an A6.4 activity under the mechanism of Article 6.4, the participants of the activities must establish and maintain a mechanism of continuous engagement of stakeholders to comment on the compliance with the A6.4 SD Tool until the end of the valid project crediting period.

Conclusion

A6.4 SD is an important tool to ensure that activities under the Paris Agreement Article 6.4 mechanism contribute to sustainable development while minimizing potential negative environmental and social impacts. (Co2AI)