Considerations for Additionality Concepts to Article 6.2 Approaches

Investment Rating - The report does not explicitly provide an investment rating for the industry under discussion Core Insights - The paper examines the role of additionality for environmental integrity under Article 6.2 approaches, emphasizing that additionality may serve as a risk management tool rather than a binary decision-making criterion [8][9][12] - It highlights the importance of ensuring that internationally transferred mitigation outcomes (ITMOs) do not lead to a net increase in global emissions, aligning with Nationally Determined Contributions (NDCs) [9][10][36] - The report suggests that the host country must assess and decide how much and which mitigation outcomes it wishes to sell to achieve its NDC commitments without overselling [39] Summary by Sections 1. Introduction - Article 6.2 approaches must contribute to achieving NDCs while ensuring environmental integrity [9] - Environmental integrity is defined as the ability to transfer mitigation outcomes without increasing global emissions [9] 2. Role of Additionality in Earlier Market-Based Mechanisms - Additionality has historically been judged as a yes/no dichotomy, with methods varying across mechanisms like Joint Implementation (JI) and Clean Development Mechanism (CDM) [8][12] - The report discusses how additionality testing has evolved and its implications for current mechanisms [12][15] 3. Considerations for the Role of Additionality for Article 6.2 Approaches - The report analyzes the characteristics of Article 6.2 in comparison to other market mechanisms, noting its similarities with JI and International Emission Trading (IET) [25][27] - It emphasizes that additionality should not be a strict requirement but rather a tool for managing risks associated with overselling and ensuring environmental integrity [31][33] 4. Relationship between Environmental Integrity and Additionality for Article 6.2 - Environmental integrity under Article 6.2 is broader than additionality under CDM, focusing on the alignment of mitigation actions with NDC commitments [37][38] - The report suggests that if NDCs are rigorously defined, additionality testing may not be necessary for A6.2 actions [37] 5. Transition Period to Streamlined Additionality - The report proposes a transition period where activity-specific methods are used to define a below-BAU scenario as the baseline/reference level [43][44] - It advocates for continuous improvement of NDCs and regular updates to enhance transparency and ambition in the context of A6.2 activities [44]