Climate change is a global challenge, but not every country has the same capacity to reduce greenhouse gas emissions. While some nations can deploy renewable energy or clean technologies quickly, others may face financial, technological, or developmental constraints.
Recognizing this, the Paris Agreement introduced a framework that allows countries to cooperate in achieving their climate goals instead of working in isolation. This framework is established under Article 6, which enables countries to reduce emissions collectively while ensuring transparency and environmental integrity.
But where do Nationally Determined Contributions (NDCs) and Internationally Transferred Mitigation Outcomes (ITMOs) fit into this picture? Let’s break it down.
Understanding Article 6
Article 6 of the Paris Agreement creates a framework for international cooperation on climate action. It has three components, each serving a different purpose:
- Article 6.2 enables countries to participate in voluntary cooperative approaches involving the international transfer of mitigation outcomes (ITMOs), provided they comply with agreed accounting, transparency and reporting requirements..
- Article 6.4 establishes a UN-supervised carbon crediting mechanism where emission reduction projects can generate carbon credits under internationally agreed rules.
- Article 6.8 promotes non-market approaches, such as technology transfer, capacity building, and policy cooperation, without involving carbon credit trading.
This blog focuses on Article 6.2, which governs the transfer of ITMOs between countries.
What are NDCs?
Every Party to the Paris Agreement is required to prepare, communicate and maintain successive Nationally Determined Contributions (NDCs), updating them every five years with progressively greater ambition.
An NDC outlines:
- The country’s emission reduction targets.
- The policies and measures it will implement.
- The timeframe for achieving these commitments.
For example, one country may commit to expanding renewable energy, another may focus on improving energy efficiency, while another may aim to restore forests. Since every country’s economy, resources, and development priorities differ, each NDC is unique.
In simple terms, an NDC is a country’s promise to the world about how it plans to tackle climate change.
Why do countries cooperate?
Meeting climate targets can be more expensive for some countries than others.
Imagine that Country A can reduce one million tonnes of carbon emissions by building a large solar park at a relatively low cost. Meanwhile, Country B wants to meet its climate target but finds domestic emission reductions significantly more expensive.
Instead of both countries acting independently, Article 6.2 allows them to cooperate.
Country B can invest in Country A’s climate project. In return, Country A can transfer a portion of the verified emission reductions to Country B. This allows climate finance to flow where emission reductions can be achieved more efficiently, while supporting both countries in meeting their climate goals.
What are ITMOs?
The emission reductions transferred between countries under Article 6.2 are called Internationally Transferred Mitigation Outcomes (ITMOs).
Simply put, an ITMO is a mitigation outcome that has been authorised by the host Party for international transfer under Article 6.2 and accounted for under the Paris Agreement. In many cases, ITMOs represent verified emission reductions or removals measured in tonnes of CO₂ equivalent (tCO₂e).
Most ITMOs are measured in tonnes of carbon dioxide equivalent (tCO₂e), making them a common unit for accounting greenhouse gas emission reductions. However, Article 6 also allows ITMOs to be denominated in certain non-GHG metrics agreed upon by participating countries.
How does an ITMO transaction work?
A simple example illustrates the process.
Step 1: Country A develops a climate project, such as a wind farm, methane capture facility, or large-scale reforestation programme.
Step 2: The project reduces greenhouse gas emissions, and these reductions are measured, monitored, and verified.
Step 3: Country A authorizes some of these verified emission reductions for international transfer under Article 6.2.
Step 4: Country A records the transfer in its national Article 6 registry (or other approved tracking system) and applies a corresponding adjustment by deducting those transferred emission reductions from the amount it can count toward its own NDC.
Step 5: Country B acquires the ITMOs, records them in its own registry or tracking system, and applies the corresponding accounting adjustment by adding the acquired emission reductions to the amount it can count toward achieving its own NDC.
In return, Country A receives investment that can help finance additional climate projects and sustainable development.
Preventing double counting: The role of corresponding adjustments
A key principle of Article 6 is that the same emission reduction cannot be counted twice.
Suppose Country A reduces 100 tonnes of emissions and transfers all 100 tonnes as ITMOs to Country B.
If both countries claimed the same reductions toward their respective NDCs, global climate accounting would incorrectly show 200 tonnes of emission reductions instead of 100.
To avoid this, Article 6 requires a corresponding adjustment.
Therefore, here, Country A makes a corresponding adjustment by adding back the transferred mitigation outcomes to its emissions balance (or making the equivalent accounting adjustment under its NDC accounting framework), ensuring it does not count those outcomes toward its own NDC.. Country B, on the other hand, is allowed to count those reductions toward its NDC.
This simple accounting rule ensures that every tonne of emission reduction is counted only once, preserving the environmental integrity of the system.
Why is host country authorization important?
Not every carbon credit automatically becomes an ITMO.
Before an emission reduction can be transferred internationally under Article 6.2, the host country must formally authorize the transfer.
This authorization specifies how the emission reductions can be used (whether towards another country’s NDC or for another internationally recognized mitigation purpose).
By requiring government approval, Article 6 ensures that countries retain control over how their emission reductions are used and prevents transfers from undermining their own climate commitments.
Why do ITMOs matter?
As countries adopt increasingly ambitious climate targets, international cooperation will become more important than ever.
ITMOs help:
- Mobilize climate finance for emission reduction projects.
- Encourage investment in clean technologies and sustainable infrastructure.
- Support technology transfer and capacity building.
- Enable countries to achieve climate targets more cost-effectively.
- Ensure transparency through robust accounting rules that prevent double counting.
- Establish international carbon markets with high environmental integrity
Rather than replacing domestic climate action, ITMOs are intended to complement national efforts and encourage collaboration across borders.
The bigger picture
Article 6 is about much more than trading emission reductions. It is about enabling countries to work together to tackle a global challenge.
While NDCs define what each country aims to achieve, ITMOs provide a mechanism for countries to cooperate in achieving those goals. Through investment, transparent accounting, and safeguards like corresponding adjustments and host country authorization, Article 6.2 helps ensure that international cooperation delivers real and measurable climate benefits.
As more countries operationalize Article 6, ITMOs are expected to play a growing role in channeling climate finance, supporting sustainable development, and helping the world move closer to achieving the goals of the Paris Agreement.
