One of the trickiest points in the Article 6 negotiations is how to account for international trades and ensure there are no loopholes for countries and companies participating in global carbon trading.
In theory, a country will need to tighten its 2030 target if it sells emission credits – by the volume of the trade – to ensure there is no double counting of the same emission cut by two nations. This tightening is known as a “corresponding adjustment.”
The problem is, many countries are waiting for the rules before they set their 2030 targets. They are potentially seeking to adjust their targets after knowing how the rules will work in a bid to make more money later out of the carbon markets.
It’s like a cat and mouse game or a Mexican standoff. See http://carrzee.org/2021/11/02/draft-article-6-text-nov-1/
Another key point of contention is how / whether to use existing credits generated under Kyoto in the Paris deal. See below.
And note this past blast on the use of Kyoto credits:
6.2 Text:
Here is one of the sections in the new Article 6.4 text (see below) about the corresponding adjustments:
And just in case you were wondering about use of existing Kyoto credits under Paris:
Article 6.2 text:
Article 6.4 text
(Smooths text.)