Integration of Article 6 into Carbon Pricing Policy for NDC Delivery: How to Meet (and Raise) Climate Targets

You can read the full policy brief here: Article 6_Carbon Pricing_Climate & Company

Nationally Determined Contributions (NDCs) set the benchmark for climate ambition, but countries face difficult choices on the right carbon pricing mix to deliver them. This policy brief explores how taxes, emissions trading systems (ETSs), and Article 6 of the Paris Agreement interact, highlighting the trade-offs, opportunities, and implications for ministries of finance and environmental ministries across different country profiles.

As governments seek to meet their NDCs under the Paris Agreement, the choice of carbon pricing instruments has become a decisive strategic question. Carbon taxes, emissions trading systems (ETSs), and international crediting under Article 6 offer different advantages, risks, and fiscal implications. Yet these instruments are not interchangeable: each has direct impacts on national budgets, industrial competitiveness, and the credibility of long-term climate pathways. For finance and environment ministries, the key challenge is not just to pick one instrument, but to integrate them coherently while safeguarding NDC integrity.