Article 6 is a critical piece of the Paris climate agreement that provides guidance for countries on how to trade emissions reductions internationally (‘internationally transferred mitigation outcomes’ or ITMOs) and achieve their nationally determined climate contributions (NDCs) - either through cooperative approaches or under a new UNFCCC carbon mechanism.
The inclusive nature of the Paris Agreement means that countries may turn to companies to help achieve these national climate contributions by using collaborative approaches outlined by Article 6. Many businesses are also eager to contribute directly to the Paris Agreement, and Article 6 is seen as a potential way to do so. As countries start exploring the use of Article 6 to achieve their NDCs, companies will receive better signals on the type of emission reduction activities that they can also engage in.