Additionality revisited: guarding the integrity of market mechanisms under the Paris Agreement

This paper provides recommendations on how to operationalize additionality under Article 6. The authors argue that activity-level additionality testing can only be waived if the host country agrees to an independent assessment of its NDC and this assessment finds that the NDC does not contain ‘hot air’. Unless these two conditions are fulfilled, the authors recommend specific additionality testing for all activities. The same is the case for activities not covered by the seller’s NDC. The authors call for bold approaches for assessing additionality of policies. To avoid cumbersome assessment of all activities, highly aggregated approaches are suggested, ranging from payback period thresholds for technologies mandated by regulation to minimum price levels triggered by carbon pricing policies.