This article originally appeared in the National Observer.
By Jerome Gessaroli, December 11, 2024
When it comes to meeting global emissions targets of net-zero by 2050, rich and poor countries need to start working together. Our current approach — where each country reduces emissions solely within its borders — is insufficient. Much of the burden falls on the shoulders of countries least able to bear it, making it unlikely that global climate targets will be met.
Last month’s COP29 climate conference ended with a sliver of hope, as delegates made progress toward finalizing Article 6 of the Paris Agreement. This often-overlooked provision could be the key to meaningful greenhouse gas (GHG) emissions reduction, as it encourages international cooperation.
Article 6 allows countries to share emission reduction credits from joint projects, allowing a developed country to apply its share of the project’s credits towards its own country’s targets. Meanwhile, the partner country gets both its share of credits and the full environmental benefit, cutting emissions in the areas of the world where it is needed most.
Consider an emissions’ reduction project in a developing country that cannot proceed due to lack of technical resources or financing. Canada could collaborate with this country, providing technical support or project financing. Both would agree on how to measure and share the emissions reductions. Canada would then receive credit for its portion, counting it toward its own climate targets.
This is not about satisfying any moral obligations or reparations — it is practical climate policy that benefits both sides. Developed nations achieve their climate goals more efficiently, while developing countries further reduce emissions and gain much-needed capital and expertise.
Though more complex in practice, this example shows Article 6’s potential. Canada gains cost-effective reductions, while the developing country gains an emissions project that would not have proceeded without international support.
International collaboration will be essential to keep warming within 2°C by 2100, as projections suggest that the world must cut an additional 38 billion tonnes of GHG emissions over current trends. Nearly 80 per cent of the extra 38 billion tonnes must come from developing nations. Yet, as these countries strive to raise living standards, they will inevitably consume more energy. Historically, no country has achieved prosperity without high-energy consumption. One can imagine, with 3.7 billion people in developing countries currently using only six per cent of the energy an average Canadian consumes. This energy gap will shrink, driving up GHG emissions.
Many developing countries also rely heavily on coal, a major GHG source. Coal is cost-effective, provides energy security, is more reliable than renewable sources, and makes use of existing infrastructure. For these reasons, shifting from coal to renewables will not be easy.
In Asia, most coal plants are relatively new. For example, on average, coal plants in Southeast Asia are about 11 years old. Replacing these plants before their 30-plus-year lifespan would be extremely costly. As Rahul Tongia of the Brookings Institution notes, “shunning coal wouldn’t just be expensive; it would mean a lack of energy for human development.”
One estimate suggests developing countries will need $2.4 trillion annually for emission mitigation, with $1 trillion required from outside sources. Beyond financing, these nations also need technical expertise, advanced technologies and modern infrastructure for this unprecedented transition.
Recognizing these challenges, using Article 6, can make a big difference. By incentivizing international cooperation, Article 6 allows developed countries to support these lower-cost projects in developing nations, achieving larger emissions cuts for the same investment. For developed countries, where reducing emissions has become increasingly expensive, Article 6 offers a path forward that maximizes climate impact while enabling developing nations to access much-needed capital and expertise.
The benefits could be large. A Macdonald-Laurier Institute study found that for the same money, Canada could reduce emissions by 50 per cent more if it carried out methane reduction projects both internationally and domestically, rather than solely in Canada. Another study by the University of Maryland and the International Emissions Trading Association estimates that international cooperation could save $100 – $250 billion per year by 2030.
By using market mechanisms, Article 6 aligns incentives with cost-effective policies, allowing countries to use their comparative advantages. For Canada, developing international partnerships under this framework could reduce emissions at lower costs, while supporting essential climate initiatives abroad. With COP29 behind us, and advancements made in Article 6, Ottawa should incorporate this framework into its emissions’ strategy.
Jerome Gessaroli is a senior fellow at the Macdonald-Laurier Institute. He recently authored a five-part series for Resource Works on the importance of using market mechanisms to achieve climate goals.
