The Paris Agreement, adopted in 2015, unites nearly every nation to combat climate change and limit global warming to below 2 degrees Celsius. Each country commits to reducing carbon emissions through nationally determined contributions (NDCs), fostering international cooperation. A key component, Article 6, enables countries to collaborate on implementing NDCs using market and non-market approaches, enhancing climate action cost-effectiveness and promoting sustainability. Central to Article 6 is the concept of Corresponding Adjustments (CA), which prevent the double counting of emissions reductions, ensuring the integrity of global carbon accounting.

Ensuring the accuracy and integrity of carbon credits is vital. Enter the concept of CA, a pivotal mechanism under Article 6 of the Paris Agreement. CAs are designed to prevent the double counting of emissions reductions, thereby maintaining the credibility of internationally transferred mitigation outcomes (ITMOs) between countries. Let’s delve deeper into how corresponding adjustments work and why they are indispensable for global carbon accounting.

How Corresponding Adjustments Work

• Seller Country Adjustment: Imagine a country committed to reducing its carbon footprint. When this country transfers emission units to another nation, it must subtract these units from its own emissions target. This adjustment ensures that the emission reductions are not double-counted, preserving the integrity of the seller country's nationally determined contributions (NDC).

• Buyer Country Addition: On the flip side, the recipient country adds the transferred emission units to its own NDC target. This addition ensures that the emissions reductions are accounted for only once, aligning with the buyer country's climate commitments and maintaining the integrity of international emissions accounting.

The Purpose and Importance of Corresponding Adjustments

• Preventing Double Counting: Double counting is a significant concern in carbon accounting, potentially undermining the efforts of countries striving to meet their climate targets. Corresponding adjustments tackle this issue head-on by ensuring that each emission reduction is only counted once. This mechanism fosters transparency and accuracy, enabling countries to track their progress towards climate goals confidently.

• Maintaining Accounting Integrity: Accurate carbon accounting is the backbone of international climate agreements. By implementing corresponding adjustments, countries can ensure that emission reductions are consistently and reliably tracked. This integrity is crucial not only for meeting environmental commitments but also for building trust and cooperation in global climate initiatives.

Variations and Exceptions

• Mitigation Contributions: Certain credits, especially those under Article 6.4, can be utilized for "mitigation contributions" without requiring a corresponding adjustment. These credits are earmarked for domestic purposes, such as climate finance or mitigation pricing schemes, and are not intended for international trading.

• Voluntary Carbon Markets: In some countries like Ghana, do not mandate corresponding adjustments for voluntary carbon credits. However, flexibility remains as project developers can request an adjust by ment if the buyer considers it necessary, catering to diverse needs and preferences in carbon trading.

Challenges and Discussions

• Operationalization: The road to fully operational corresponding adjustments is paved with ongoing discussions and negotiations. Key issues revolve around determining precise metrics, ensuring the reliability of adjustments, and deciding the optimal timing and method for their application. These deliberations are critical to refining and enhancing the CA mechanism.

• Transparency and Reporting: To maintain transparency and accountability, the application of corresponding adjustments will be documented in biennial transparency reports (BTRs). These reports provide a clear and public record of how emission reductions are counted and transferred, fostering trust and clarity in international climate efforts.

How Corresponding Adjustments Prevent Double Counting

• Seller Country Adjustment: When a country transfers emissions units, it deducts those units from its own emissions target. This step prevents the same reduction from being claimed twice.

• Buyer Country Addition: The buyer country then incorporates the transferred units into its own NDC target, ensuring that the reduction is counted only once.

Key Points to Remember

Corresponding adjustments are crucial for preventing double counting of emission reductions, ensuring that each reduction is claimed only once. This upholds the integrity and accuracy of global carbon accounting. These adjustments are triggered by the host country's authorization and are applied to the year the reductions occurred. While some credits, particularly those under Article 6.4, might not require corresponding adjustments, certain countries may also opt out of applying CAs for voluntary carbon credits.

Source: 

https://climatefocus.com/publications/article-6-corresponding-adjustments/
https://www.nature.org/content/dam/tnc/nature/en/documents/TNC_To_Trade_or_Not_to_Trade_150523.pdf

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Fairatmos is a climate technology company that helps you to discover, develop and deliver high quality carbon offset projects at scale. We believe in the power of nature to heal and remove greenhouse gasses from our atmosphere with the help of technology.

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