Germany‘s carbon market cooperation with Viet Nam: Prospects for engaging with Article 6 of the Paris Agreement

Germany‘s carbon market cooperation with Viet Nam: Prospects for engaging with Article 6 of the Paris Agreement - DEHSt adelphi
Healy, Sean; Julia Melnikova, Lina Li, Dennis Tänzler, Ritika Tewari, Marie-Jeanne Kurdziel and Carsten Warnecke 2017: Germany‘s carbon market cooperation with Viet Nam: Prospects for engaging with Article 6 of the Paris Agreement. Berlin: DEHSt.

This paper discusses the current readiness of Vietnam to engage in carbon market options that Article 6’s provisions may present. Engagement readiness is discussed for three indicators: enabling conditions present in the country to participate in markets; feasibility of maintaining robust accounting and MRV to maintain quality of generated reductions and transparency of transfers; and the compatibility of the country’s nationally determined contribution (NDC) to maintain the environmental integrity of Article 6 and strengthen mitigation ambition of the Paris Agreement.

The paper argues that at the current level of capacity, crediting instruments seem to be most feasible in the short term. In the medium to longer term, the linking of the proposed small scale ETS for the iron and steel sector may be a future option for Viet Nam. These assertions are arrived at using empirical evidence from interviews, project workshops and literature review on various factors discussed under the three indicators. Based on the assessment, recommendations are made for Germany to further support Vietnam to participate in Article 6. Three entry-points are recognised: first, furthering in-country MRV capacities for market mechanisms; second, providing focussed technical support on common elements/linkages between Article 6 and NDC implementation; and third, sharing own experiences and lessons learnt for instrument design and implementation. 

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