What does the COP26 Outcome on Article 6 Mean for Non-Party Stakeholders?

Article 6 of the Paris Agreement established a framework for countries to cooperate in achieving their climate commitments (nationally determined contributions, NDCs), using market mechanisms to enable greater ambition than they could achieve independently. The Paris Agreement implementing guidance finalized at COP26 in Glasgow provides direction to countries that transfer emissions reductions under Article 6. This paper explains that COP26 outcome and its relevance for companies and other non-Party stakeholders (NPS). In particular, the paper provides a detailed analysis of the atmospheric impact (that is, the net effect on emissions reductions) of the international transfer and use of voluntary carbon credits by NPS, whether under Article 6 or independently of it. It also describes efforts underway to ensure the environmental integrity of the voluntary carbon market, including the Voluntary Carbon Markets Integrity initiative (VCMI) and the Integrity Council for the Voluntary Carbon Market (IC-VCM), as well as broader considerations around engaging in the VCM and carbon credits’ authorization under Article 6.