Nordic Initiative for Cooperative Approaches

International market-based collaboration to build capacity and foster partnerships among Nordic public and private actors

International partnerships to accelerate climate action

The Nordic Initiative for Cooperative Approaches (NICA) is supporting operationalisation of international market-based collaboration under Article 6 of the Paris Agreement. NICA is also following developments in the Voluntary Carbon Markets and their interaction with the Paris Agreement mechanisms.

NICA strives to demonstrate how international partnerships can support, scale up and accelerate ambitious climate action, promote sustainable development and harness private sector finance and innovation. It is building capacity and foster partnerships among Nordic public and private actors and their global peers for collaboration that is compatible with the Paris Agreement.

NICA seeks to foster partnerships also between various Nordic actors and their global peers that can deliver real and lasting mitigation outcomes, promote higher ambition, harness private sector finance and innovation and deliver sustainable development, including adaptation co-benefits. NICA activities aim to contribute to the development of robust and practical international rules for international transfers of mitigation outcomes to ensure that such market-based cooperation contributes to the goals of the Paris Agreement.

NICA was jointly developed by Finland, Norway, Sweden and Nefco. There was a strong interest and willingness to continue cooperation in collaboration with Nefco broadly in line with the previous Nordic Partnership Initiative collaboration, but also considering the major developments in international climate policy: the Paris Agreement and Nationally Determined Contributions (NDCs), i.e., countries’ climate actions under the Agreement.

The Nordic countries have an extensive track record in supporting ambitious climate action and sustainable development in developing countries and promoting carbon pricing around the world. NICA brings this experience and cooperation into the Paris Agreement era as the Nordic countries continue to join forces to facilitate international partnerships for ambitious climate action that is compatible with the Paris Agreement framework. Under NICA, the Nordic countries will also continue to engage with the international carbon pricing community to promote knowledge sharing, coordination and collaboration.

How can companies participate in global climate action?

Nefco and Finland of Chamber of Commerce event about Article 6 and carbon markets on 25 October 2023 in Helsinki, Finland

The market mechanisms included in the Paris Agreement could provide ways for the private sector to participate in global climate action and utilise the carbon markets. The Finland Chamber of Commerce and Nefco gathered experts to discuss and exchange views from the Finnish perspective.

A robust and efficient Article 6 carbon market offers tools to mobilise public and private finance for climate action. Watch the COP28 high-level session to explore the potential of Article 6, carbon finance and learn more about progress on the ground to support the energy transition.

Current activities

NICA has been mapping and screening feasible opportunities for piloting Article 6 in various countries. NICA will continue to support implementation of the carbon market mechanisms under the Paris Agreement also acknowledging the need for close collaboration with voluntary carbon markets. NICA is functioning also as a Nordic Platform sharing information between the Nordic actors as the Nordic countries are separately implementing various bilateral and national activities linked to Carbon Markets.

NICA activities include development of key documentation for potential Article 6 transactions in collaboration with various stakeholders, a summary report on NICA activities, a Fact Sheet and various workshops and events.

The focus of the initiative

The focus of NICA co-operation will be on supporting the implementation of the Paris Agreement and in particular on operationalising international market-based collaboration under the agreement’s Article 6. NICA will demonstrate how voluntary collaboration can be used to enhance ambition, support sustainable development, accelerate climate action and include private sector participation.

The activities for the initiative build upon major Nordic experience in the development and use of the Kyoto Protocol’s flexible mechanisms (Clean Development Mechanism and Joint Implementation). The activity also supports Nefco’s continued positioning as an important player in the carbon markets.

Nefco carbon market activities

Since 2003, Nefco has established and managed several groundbreaking carbon funds that harness the power of carbon markets. Our carbon funds have provided a pioneering testing ground for innovative, market-based approaches.

Publications on Article 6 Cooperation

International Emissions Trading Association’s (IETA) report: Modelling the Economic Benefits of Article 6
Supporting Preparedness for Article 6 Cooperation’s (SPAR6C) toolbox: SPAR6C Toolbox – your compass to navigate Article 6
Report for the Swedish Energy Agency: Using International Carbon Credits to Achieve National Mitigation Targets of EU Member States – Options for Accounting under Article 6 of the Paris Agreement
IETA resources on carbon markets, such as Emissions Trading 101 Library: IETA Resources
Global Green Growth Institute’s (GGGI) reports: GGGI Library – Publications and Graphics (choose the thematic area: “Carbon Trading”)
The World Bank’s Article 6 Approach Paper Series and yearly reports on State and Trends of Carbon Pricing, as well as other pertinent publications: World Bank Group Open Knowledge Repository – Article 6
Swedish Energy Agency’s overview of partnerships under the Paris Agreement
Finnish Government’s guide to good practices for voluntary carbon market
The Norwegian Carbon Credit Procurement Program (The Norwegian Ministry of Climate and Environment)

Available funding

Financing will initially be grants with co-funding components likely to be required going forward. Supported activities and projects will be procured utilising Nefco’s Procurement Rules including Calls for Proposals should actual pilot activities be implemented. NICA also welcomes further contributions.

Contributors

The NICA initiative has been funded by Finland, Norway, Sweden, the Nordic Council of Ministers’ Working Group for Climate and Air, and Nefco. Iceland is also involved in NICA collaboration and Denmark has also participated in NICA discussions.