In A Vision For the Market Provisions of the Paris Agreement, IETA notes the long-term durability of the Paris Agreement, making it especially crucial that its implementation incentivises the maximum level of emissions reductions – including via harmonised carbon pricing systems.

This can be achieved through linking systems, which in turn enables the transfer of emissions units between various systems. Such transfers are also encapsulated in the Paris Agreement, with paragraph 2 of article 6 establishing internationally transferable mitigation outcomes (ITMOs) as means of accounting for such linkages between systems.

The paper also highlights the role of the Emissions Mitigation Mechanism (EMM), as established by paragraph 4 of article 6. This mechanism can cut emissions in countries which are currently not in a position to establish a carbon pricing system yet which need the climate finance that the EMM can bring, says IETA. Robust accounting and governance provisions are again crucial to ensuring environmental integrity of any resultant reductions which are counted towards a country’s Paris Agreement goal.

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