Sustainability labelling as a tool for reporting the sustainable development impacts of climate actions relevant to Article 6 of the Paris Agreement

  • Karen Holm Olsen
  • Fatemeh BakhtiariEmail author
  • Virender Kumar Duggal
  • Jørge Villy Fenhann
Original Paper


The architecture of global carbon markets has changed significantly since the Paris Agreement and the 2030 Agenda for Sustainable Development Goals were both agreed in 2015. Voluntary, international cooperative approaches established in Article 6 of the Paris Agreement allow Parties to work together to achieve the targets set out in their respective Nationally Determined Contributions to limit global warming to an increase below 1.5–2 °C. In Article 6.4, a sustainable mitigation mechanism is established for which rules, modalities and procedures will be developed internationally considering the experience and lessons learned from existing mechanisms, such as the Clean Development Mechanism (CDM) and its Sustainable Development (SD) Tool. Historically the issue of making integrated assessments of sustainable development and mitigation actions has been politically and methodologically controversial for many reasons: developing countries fear that an international definition of SD will interfere with their sovereignty and therefore their ability to define their own development pathways; players in the carbon market fear that markets can only handle one objective, namely mitigation outcomes; and sustainable development is regarded as too complex and costly to be measured and quantified. In an effort to address these concerns, the article proposes a new methodology for the sustainability labelling of climate mitigation actions relevant to Article 6 approaches. The article draws on an application of the CDM SD tool to analyse 2098 Component Programme Activities that had entered the CDM Pipeline by January 2017. The article demonstrates that assessment of the sustainable development benefits of climate actions can be graded and labelled based on the analysis of qualitative data, which is less costly than applying a quantitative approach.


Sustainable development (SD) impacts Climate actions Labelling Sustainability reporting Clean Development Mechanism (CDM) Article 6 Cooperative approaches Paris Agreement 



Clean Development Mechanism


Sustainable Development


Component Programme Activities


Nationally Determined Contributions


Sustainable Development Goals


International Transfer of Mitigation Outcomes


Letter of Approval


Certified Emission Reductions


Programme of Activities


Conference of the Parties


Project Design Documents


Future Carbon Fund


Monitored, Verified and Reported


Initiative for Climate Action Transparency


Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest. Views expressed in the article are those of the authors and do not reflect the views and policies of the Asian Development Bank (ADB) nor the UNEP DTU Partnership, to which the authors are affiliated.

Supplementary material

10784_2018_9428_MOESM1_ESM.docx (112 kb)
Supplementary material 1 (DOCX 111 kb)


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Copyright information

© Springer Nature B.V. 2019

Authors and Affiliations

  • Karen Holm Olsen
    • 1
  • Fatemeh Bakhtiari
    • 1
    Email author
  • Virender Kumar Duggal
    • 2
  • Jørge Villy Fenhann
    • 1
  1. 1.UNEP DTU Partnership, Department of Management EngineeringTechnical University of DenmarkCopenhagenDenmark
  2. 2.Sustainable Development and Climate Change DepartmentPrincipal Climate Change Specialist (Future Carbon Fund)Mandaluyong City, Metro ManilaPhilippines

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