CCAP recently submitted its views to the United Nations Framework Convention on Climate Change (UNFCCC) regarding some of the issues that need to be addressed in order for Internationally Transferred Mitigation Outcomes (ITMOs) to support the greater global ambition promised in the Paris Agreement.
Emerging from Article 6 of the Paris Agreement, ITMOs offer new ways for countries to cooperate towards reducing emissions. ITMOs can help enhance ambition to achieve the objectives of the Paris Agreement, but without proper safeguards, they can create perverse incentives, overlap with climate finance objectives, and undermine developing countries’ efforts to achieve their Nationally Determined Contributions. As Parties to the UNFCCC work on guidance for ITMOs they should design them to address these broad risks, as well as specific challenges related to double counting and environmental integrity. Without a formal definition, Article 6 leaves room for experimentation in how transfers can contribute to climate mitigation. While ITMOs can certainly include traditional carbon markets similar to what existed under the Kyoto Protocol, there is no reason they can’t include bilateral or plurilateral exchanges between Parties, mitigation outcomes emerging from multilateral finance actions, or even non-greenhouse gas-based transfers, like international trading of renewable energy credits.
If used effectively, ITMOS can contribute to narrowing the “emissions gap” and help effect the transformational change needed to limit warming to 2/1.5°C above pre-industrial levels. By reducing the cost of implementation, supporting early action, enabling transfer of low-carbon technologies, and building domestic capacity for mitigation, ITMOs can spur enhanced ambition.