COP29: Will LATAM Successfully Navigate Article 6.2 Implementation?
As COP29 begins in Baku, Latin American countries face important decisions about their participation in international cooperation under Article 6.2 of the Paris Agreement as key ITMO suppliers. While several countries have already bilateral agreements that enable Internationally Transferred Mitigation Outcomes (ITMOs), challenges could impact their ability to effectively implement these agreements while meeting their NDC targets.
Current Status: Early Bilateral Agreements, Ongoing Challenges
LATAM's engagement with Article 6.2 is currently being shaped by two major cooperation frameworks. The Japanese Joint Crediting Mechanism (JCM), focuses on long-term ITMO exchange through technological transfer and renewable energy projects, including biomass and energy storage installations. Switzerland's bilateral cooperation program takes a different approach focusing on short-term ITMO exchange through large-scale mitigation activities, particularly in industrial energy efficiency, and standalone storage projects.
Despite these frameworks providing initial pathways for ITMO transfers, broader Article 6.2 implementation in LATAM remains in early stages such as 5 countries from the region having already signed an MOU with Singapur. The contrasting approaches of these bilateral agreements highlight the different choices facing LATAM countries as they consider additional bilateral partnerships.
Key Challenges and Risks
Risk of Compromising NDC Achievement
A main concern is ensuring that ITMO transfers don't compromise countries' abilities to meet their NDC targets. Paraguay's recent law, mandating a 3-10% retention of mitigation outcomes, acknowledges this risk but raises questions about whether such measures are sufficient when faced with growing international interest in ITMO acquisition.
Infrastructure Gaps
Many LATAM countries still lack the necessary technical infrastructure for ITMO transfers:
Incomplete or non-operational national registries
Limited MRV capabilities
Insufficient data for accurate accounting of transfers
Challenges in meeting corresponding adjustment requirements
Strategic Considerations
The region faces a development leapfrog opportunity:
Benefits from international cooperation and technology transfer
Maintaining sufficient domestic mitigation outcomes for NDC achievement
Different cooperative approaches offered by potential partner countries
Long-term implications of early ITMO transfers
Key Decisions Ahead
COP29 finds LATAM countries needing to decide:
Which bilateral partnerships to pursue and under what terms
How to structure safeguards to protect NDC achievement
How to maximize benefits from international cooperation while maintaining environmental integrity
Looking Ahead
Successful Article 6.2 implementation will require LATAM countries to:
Develop robust technical infrastructure for tracking and reporting ITMO transfers
Establish clear safeguards for NDC achievement
Balance international cooperation opportunities with domestic climate goals
The decisions made at COP29 and in the coming months will influence whether LATAM can effectively leverage Article 6.2 cooperation as a key ITMO supplier while ensuring its climate commitments are met.
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