Thursday, 10 October 2024.
This is the title of a great insight from King & Wood Mallesons, the largest law firm in Asia.
It is another article related to Article 6, after our posts about (1) UNFCC strengthening it with new safeguards about environmental and human rights, and (2) IETA’s - International Emissions Trading Association - analysis on what to expect from COP 29 in Baku.
King & Wood Mallesons starts their article by explaining the ITMOs mechanism, under Article 6.2 of the Paris Agreement.
Do you know what ITMOs is?
The acronym ITMOs stands for Internationally Transferred Mitigation Outcomes. It is “a strategic tool for nations to not only comply with their climate commitments but also to leverage their carbon sink resources effectively”. Putting it simply, it promotes international collaboration by allowing one country to sell its extra reductions to another country, that seeks to meet its targets.
It is expected that the ITMO market accelerates after COP 29, “with the potential to move significant financial flows towards sustainable projects and spur innovation in carbon trading practices”.
Other topics very well explained in the article are:
How emission reduction targets are set
How countries can buy outcomes
How ITMO works
What is the relation between corresponding adjustments and double counting
Criteria of authenticity, verifiable and additionality
Establishment of registries or international registry, including a comparative with China scheme
How can businesses take part
What are the outlooks for the ITMO market from both side, demand and offer.
The authors also explain how the ITMO market differs from carbon credits.
Key differences are basically that ITMOs can be used to achieve Nationally Determined Contributions (NDC) targets under Article 4.2 of the Paris Agreement, as well as used for international mitigation under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
Last but not least, King & Wood Mallesons also give their views on what COP29 in Baku will bring.
Click at the image below to read this thorough article by Su Meng (Molly), Suodi Xi and Jinyu Xiao.
