Carbon Trading in Cambodia’s Garment Industry under Article 6 of the Paris Agreement

Following the signing of the Paris Agreement in 2015, 197 countries, including Cambodia, have outlined their commitments to reduce greenhouse gas (GHG) emissions and adapt to a changing world through their Nationally Determined Contributions (NDCs).  Article 6 of the Paris Agreement enables countries to cooperate in achieving their NDCs by engaging in international carbon trading.  

Under Article 6, countries with high emissions can provide financial support to reduce emissions in other countries. In exchange, the country providing the finance can count the emission reductions towards its own NDCs. This allows countries such as Cambodia to access finance for low carbon investments which go above and beyond Cambodian NDC commitments.  

What is Article 6.2?

Article 6.2 of the Paris Agreement aims to contribute to the goal of limiting global warming to well below 2, preferably 1.5 degrees Celsius, by enabling international carbon markets. Article 6.2 allows any country or private company to purchase emissions reductions from another country to achieve its climate targets. When implemented correctly, Article 6.2 rewards countries that achieve emissions reductions and encourages further mitigation activities. .2

The Global Green Growth Institute (GGGI), a Switch Garment implementation partner, is currently implementing the Program “Mobilizing Article 6 Trading Structures (MATS)” in Cambodia, in partnership with the Swedish Energy Agency (SEA)The MATS program in Cambodia has the following primary objectives:  

Carbon Financing and Switch Garment

Switch Garment aims to increase the competitiveness of Cambodian garment factories and decrease the industry’s environmental impact through the adoption of sustainable energy practices. The project’s mitigation activities include increasing energy efficiency, sustainable biomass, and renewable energy in garment factories across the Kingdom. 

Interlinking with the Switch Garment project, the MATS Program aims to convert the emission reductions generated from energy efficiency interventions into tradable ITMOs. This project will also be used to test the governance frameworks developed in partnership with the Royal Government of Cambodia against a real transaction under Article 6.2 of the Paris Agreement with the Swedish Energy Agency. The carbon finance generated will support factories in their ambition to become more environmentally sustainable. 

Learn more about  the MATS Program here. 

About Switch Garment

Switch Garment promotes sustainable energy practices in the garment sector in Cambodia. Funded by the EU SWITCH-Asia Programme, the project is implemented by the Global Green Growth Institute, Geres, and the Garment Manufacturing Association in Cambodia (GMAC). Working with factories, financial institutions, government counterparts, international brands, and technology suppliers, we aim to increase the competitiveness of the Cambodian garment industry by decreasing its environmental impact.

Carbon Trading in Cambodia’s Garment Industry under Article 6 of the Paris Agreement
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