Session 4:

?? International cooperation approaches under Article 6 of the Paris Agreement ??

The fourth session on the National workshop on carbon markets organized by Ministry of New and Renewable Energy (MNRE) on 25th July 2024 delved into opportunities in the international compliance market under Article 6, assessing the preparedness of industries to participate in the UN-led international compliance mechanism, and articulating industry needs for smooth and effective operation of Article 6.4 and 6.2 of the Paris Agreement through streamlined national approvals. Carbon Markets Association of India was the knowledge partner for this session. Here's a snapshot of the key takeaways across different discussion themes moderated by Prof Amit Garg, IIM Ahmedabad:

1. Cost constraint of CCUS technology: Prof Vikram Vishal, IIT Bombay highlighted that cost is a critical factor in determining the feasibility of CCUS technology. While the technology's potential to mitigate climate change is undeniable, its high implementation and operational costs have been a significant barrier to widespread adoption. Factors such as the scale of the project, carbon capture method, transportation, and storage options significantly influence the overall cost. Until substantial cost reductions are achieved, the widespread deployment of CCUS may remain challenging. However, it is essential to consider that the cost-benefit analysis extends beyond the immediate financial outlay. The long-term environmental and economic implications of climate change, coupled with potential policy incentives and technological advancements, might shift the cost-benefit equation in favor of CCUS in the future.

2. Inclusion of youth for implementing Article 6: Ms. Namgay Choden, Climate Solutions Strategist, Bhutan, highlighted that the inclusion of youth in decision-making processes is paramount to effectively implement Article 6 of the Paris Agreement. Young researchers and experts bring fresh perspectives and innovative approaches to climate negotiations. Their engagement is essential to harness the full potential of carbon capture, utilization, and storage (CCUS) and green hydrogen technologies. By leveraging Article 6, India can significantly advance its low-carbon transition through capacity building, international collaboration, and carbon market participation.

3. International cooperation for successful ITMO implementation: Mr. Yuvaraj Dinesh Babu, Executive Director, Climate Action Data Trust, emphasized the need of developing and developed countries to authorize Internationally Transferred Mitigation Outcomes (ITMOs). Authorizing ITMOs offers financial incentives for developing countries but requires capacity building and risk management. Developed countries can enhance climate ambition and market access through ITMOs, while also facilitating technology transfer. Both of these need robust governance, focus on sustainable development, and international cooperation for successful ITMO implementation.

4. Significance of institutional readiness for low carbon economy: Mr. Hansraj Verma, Director General, COSIDICI, highlighted that India's transition to a low-carbon economy necessitates significant institutional readiness to leverage Article 6.2 of the Paris Agreement funding. MSMEs, as major emission contributors, must be central to the carbon market. A mass movement towards energy efficiency, coupled with renewable energy development and ecosystem restoration, is crucial. The emerging CBAM landscape presents both challenges and opportunities. To maximize benefits, capacity building for MSMEs on carbon markets and Article 6.2 is imperative.

Collectively, these perspectives underscore the critical role of international cooperation, institutional readiness, and technological innovation in achieving a sustainable, low-carbon future.