Six years after the Paris Agreement was signed, a number of the rules that are critical to its implementation are yet to be agreed and finalised, including the Article 6 mechanism for creating a framework for international transfer of climate mitigation outcomes and a new sustainable development mechanism program. This is set to be the focus of the second week of COP26, with negotiators preparing for all-night sessions to determine and deliver these rules.

On Saturday morning, the UNFCCC Secretariat released updated draft negotiating texts for Article 6. However, on review of these texts, it is clear that the parties have not yet been able to unlock entrenched positions, with the Parties left divided on a number of key issues following the Subsidiary Body for Scientific and Technical Advice (“SBSTA”) negotiations on Saturday. Switzerland and a number of other countries called for clearer rules on corresponding adjustments, which will be a key aspect of the accounting mechanism to avoid double-counting of credits underpinning international transfers of mitigation outcomes under Article 6. Meanwhile, Bhutan for the Least Developed Countries objected to arguments against the share of proceeds, which would generate funding for the poorest countries to adapt to climate change.

Elsewhere, IETA noted that the parties did not refer to the issue of carrying over Clean Development Mechanism (“CDM”) projects and carbon credits, although the Climate Action Network urged governments not to allow any such carryover. Climate Action Network also advocated to require corresponding adjustments for all transfers of mitigation outcomes, whether inside or outside the scope of Nationally Determined Contributions (“NDCs”). The Parties did however agree on the importance of common timeframes for NDCs and robust transparency rules for reporting.

Some commentators close to the action do, however, believe progress has been made since the COP began, with the options in the draft texts for Article 6.2, Article 6.4 and Article 6.8 being clearer and more concise. Director of Oxford Net Zero Initiative, Myles Allen, states that it is important to acknowledge that “all these really complicated headaches with Article 6 will disappear as we approach net-zero”, as such it is important to keep in perspective that in twenty years or so, the issues will be irrelevant.

COP26 President Alok Sharma issued a warning on reaching an agreement on Article 6, saying that people will be “astonished” if it fails to so, following six long years of discussions.