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Recommendations for an International Carbon Currency Market under Article 6 of the Paris Agreement

Emily Davies

DOI https://doi.org/10.21552/cclr/2018/2/8



An international carbon currency market has the ability to achieve a global low-carbon development transition that delivers the mitigation targets of the Paris Agreement. To achieve this, Parties to the Paris Agreement must leverage climate finance to transition to an international carbon currency market as soon as possible. The private sector is an important source of climate finance and is key to achieving this goal. Adoption of guidance on cooperative approaches and rules, modalities and procedures under Articles 6.2 and 6.4 of the Paris Agreement which encourage the development of an international currency market and private sector participation will facilitate this transition. This paper commences by explaining why the world needs to rapidly develop an international carbon currency market to meet mitigation targets under the Paris Agreement. It then details the importance of private sector participation and Article 6 of the Paris Agreement. The paper then looks at lessons learned from existing carbon markets. Finally, the paper looks at what guidance on cooperative approaches and rules, modalities and procedures should be adopted under Article 6 of the Paris agreement to facilitate private sector engagement and the rapid global transition to an international carbon currency market.

Emily Davies, Associate at Norton Rose Fulbright, Australia. This article is based on a LLM essay submitted to the Australian National University (ANU) College of Law in April 2017. The author thanks Ross McMillan, Bianca Sylvester, Vanessa Walsh, ANU Visiting Fellow Ilona Millar and ANU Adjunct Professor Martijn Wilder AM for their support and assistance. For correspondence: <mailto:emily.davies@nortonrosefulbright.com>.

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