Climate Market Club
The Climate Market Club (or “Club”) is a group of national governments and non-sovereign members that agree on common principles and jointly develop modalities for piloting activities under Article 6.2 of the Paris Agreement.
The objective of the Club is to serve as a forum for discussion and consensus on how different elements of Article 6.2. of the Paris Agreement can be piloted. This is intended to facilitate the development of rules under the Paris Agreement based on practical experience and catalyze early action.
The Club was established by the World Bank Group (WBG) together with the MDB Working Group on Article 6 after bilateral consultations with various national entities that demonstrated interest in climate markets.
The Club meets monthly to discuss key topics related to Article 6.2 and provide inputs to the development of knowledge products to inform piloting. A series of technical Article 6 Approach Papers are discussed at the Club, finalized based on feedback by the Club, and made publicly available.
As of May 2021, the Club is comprised by 13 governments and 4 non-sovereign entities. The WBG, in coordination with other MDBs serve as the Secretariat, convening meetings and developing technical and knowledge products at the request of the Club.
The current club members are:
The governments of Bangladesh, Bhutan, Chile, Ghana, Kazakhstan, Japan, Peru, Rwanda, Senegal, Singapore, Sweden, Switzerland, and Ukraine
The following non-sovereign entities: Klik Foundation, Global Green Growth Institute, Temasek, and Institute for Global Environmental Strategies
Article 6 Approach Papers
Approach papers are an important aspect to the work we do to enable environments and inform development of regulatory frameworks, institutional arrangements and efficient market infrastructure.
Learn more about the research and work that is being done on key operational issues such as environmental integrity, corresponding adjustment and host country institutional arrangements according to Article 6 of the Paris Agreement. Our most recent papers are featured below.
The Paris Agreement provides a framework for all countries - both developed and developing - to voluntarily adopt individual targets, elaborated in their nationally determined contributions (NDCs). This effectively introduces commitments on the country in the sectors covered by their NDCs. Consequently, there is a need for countries to ensure that mitigation outcomes (MOs) and their international transfer are accompanied by robust accounting. Beyond international climate markets under Article 6, the International Civil Aviation Organization (ICAO) decided to establish a global market-based mechanism, in the form of the carbon offsetting and reduction scheme for international aviation (CORSIA), to help achieve ICAO’s global goal of carbon-neutral growth. This note seeks to identify processes for the generation and transfer of carbon assets in post-2020 international climate markets and to suggest standard terminology in the carbon asset development cycle across key independent standards. The note builds on existing practices among different independent standards to streamline and harmonize process flows and ensure that country governments have greater clarity on the process for engaging in climate markets. This note reflects inputs from the informal working group on carbon assets, pilot transactions under different initiatives, as well as knowledge produced in relevant platforms.
Unlike the Kyoto protocol’s clean development mechanism (CDM), Article 6.2 of the Paris Agreement is designed to allow for international cooperation in carbon markets through decentralized governance. Under this article, bilateral or plurilateral cooperation between participating parties can be established through a mutually agreed policy and governance framework and reflected in the agreement between the parties involved. This decentralized architecture requires considerably higher levels of engagement and oversight from participating parties. The context for setting institutions and approval procedures at the domestic level is fundamentally rooted in the country’s national climate strategy and their nationally determined contribution (NDC). A host country will need to establish a detailed Article 6 strategy that guides, but is not limited to, how its participation in Article 6 will help the country achieve its target. This paper forms the starting point, focusing on the institutional requirements to establish the policy and regulatory process that defines and supports the implementation of the potential activity cycle for Article 6.2 activities and transactions; identifies functions required at the national level from the host country’s perspective; and discusses different options to allocate these functions to existing or new institutions. The Article 6.2 activity cycle can build on project cycles under the Kyoto protocol, with an added requirement for the authorization and transfer of mitigation outcomes (MOs). While the entire process can be developed domestically, host countries can also choose to use international crediting programs to register projects and issue units. However, the host country will still be responsible for the Article 6.2 process of authorizing and transferring ITMOs, as well as applying corresponding adjustments. The type of arrangement that a country chooses to adopt affects the type of institutional arrangement and functions of the different bodies involved.