Article 6 Letters of Authorisation Explained - with Lisa DeMarco

In this episode of The CDR Policy Scoop, Eve Tamme and Sebastian Manhart sit down with Lisa DeMarco to unpack the legal machinery behind Article 6 of the Paris Agreement. A letter of authorization is an enforceable contract by which a host government permits a project to export a piece of its own climate progress. Lisa explains that it only counts as genuine under Article 6 if it conforms exactly to the minimum requirements set out in Article 6.2 or 6.4. She warns that letters of approval, acknowledgement, or no objection are routinely confused in the market, and points listeners to the model LOA forms she helped develop with the World Bank.The conversation turns to the KOKO cookstove project in Kenya, where two government entities each argued they lacked the authority to issue the LOA, leaving no party accountable when the project collapsed. Lisa breaks down the three part diligence host governments should complete before signing an LOA: confirming which branch of the state actually holds authority, checking the export will not take the country off track from its NDC, and reviewing domestic constitutional questions around trading natural resources.Lisa and the hosts also dig into revocation, distinguishing between a government's right to revoke a bad actor's authorization and the far more consequential question of retroactively cancelling units that have already changed hands, something she compares to printing a dollar bill and tearing it up. On corresponding adjustments, she lays out exactly when they are legally required by law and when not. However, even when projects don’t require corresponding adjustment, arranging a letter of acknowledgement from the government is crucial.They close by sizing up the market: roughly thirty five Article 6 projects have been authorized since the start of 2025, worth about one hundred million credits combined, against a European Union that alone could need hundreds of millions of credits by 2040.LINKSEve Tamme: LinkedIn and WebsiteSebastian Manhart: LinkedIn and WebsiteLisa DeMarco: LinkedIn and Resilient LLPWorld Bank: Letter of Authorization and Acknowledgement (incl templates)IETA Article 6 Project DirectoryParis Agreement Article 6 Implementation Partnership Hosted on Acast. See acast.com/privacy for more information.