This report analyses how the role of sustainable development can be strengthened in the process of further designing the mechanisms under Article 6 of the Paris Agreement. The paper reflects on the experience with sustainable development in past and current market mechanisms and describes to what extent countries agreed on sustainable development issues in multilateral instruments and institutions outside the UNFCCC. Based on the current negotiating draft texts (SBSTA 50 from June 2019, as well as CMA2 from December 2019), recommendations are put forward on how to anchor sustainable development and safeguarding provisions in the rules for Article 6.

Main findings:

This report analyses how the role of sustainable development can be strengthened in the process of further designing the mechanisms under Article 6 of the Paris Agreement. The paper firstly reflects on the experience with sustainable development under the CDM and in the debate on post-2020 market mechanisms. It also considers what approaches to sustainable development voluntary market actors have developed. In addition, it is analysed to what extent countries agreed on sustainable development issues in multilateral instruments and institutions outside the UNFCCC. These experiences with the CDM and other instruments and institutions can help inform the Article 6 negotiations.

In order to facilitate the integration of sustainable development in Article 6, the report secondly identifies important references to sustainable development and safeguard provisions in the Paris Agreement and the SBSTA 50 draft texts on Article 6 from June 2019, as well as the draft CMA2 texts from December 2019. To better illustrate the limitations and options for integrating sustainable development into Article 6, three potential scenarios of how sustainable development is incorporated into the guidance, rules, modalities and procedures of Article 6are developed, thirdly.

The assessment closes with recommendations on how to anchor sustainable development and safeguarding provisions in the rules for Article 6. These recommendations include suggestions for text amendments for the negotiations under the UNFCCC. As the negotiations may defer parts of the further elaborations of the Article 6 operationalisation into a work programme, the report also considers potential elements for fostering sustainable development and safeguards under such a work programme.