LowEmissionAsphalt-136pg-WhitePaper-May2023

P a g e | 18 on Climate Change (UNFCCC) , 34 recognizes the role of international cooperation through carbon markets in its Articles 6 & 8 . Article 8.1 stipulates that parties to the Agreement can voluntarily cooperate in achieving Nationally Determined Contributions (NDCs) to “allow higher ambition … and to promote sustainable development and environmental integrity” . International cooperation includes cooperative approaches involving the use of “internationally transferred mitigation outcomes” (ITMOs) toward NDCs under Article 6.2, which is largely understood as a channel of international cooperation, including an international accounting framework , under the authority of the parties involved. The U.S. Securities & Exchange Commission (SEC) is currently evaluating just such an addition to its oversight. 35 Article 6.3 requires that the use of ITMOs toward NDCs are authorized by all parties involved. Emission reductions generated by a central crediting mechanism under Article 6.4. This new mechanism, sometimes called a “sustainable development mechanism,” wil l operate under UNFCCC oversight. Currently, thirty-five (35) cities and states representing almost a one-third of domestic greenhouse gas emissions are contemplating placing a price on carbon as a principal component of their efforts to reduce emissions and place their growth trajectory on a footing consistent with the Paris Agreement. As agencies adopt increasingly stringent climate targets, the question as to which policy package reliably puts them on track to deliver the required emissions reductions is becoming ever more prevalent. This will require a shift in investment patterns and behaviors, as well as innovation in technologies, infrastructure, financing, and practice in our industry. Strategies will be needed to achieve this change through reflecting local circumstances, creating new economic opportunities, and supporting all stakeholders. For many agencies, GHG gas emissions pricing (or, as it is more commonly referred to, “carbon pricing”) is emerging as a k ey driver of this transformation. So, there is plenty of incentive for our industry to get serious about this now. 34 UNFCCC; Climate Reports | United Nations . 35 SEC.gov | Climate and ESG Risks and Opportunities .