Reviving the Principle of Supplementarity for the Market-based Mechanisms of the Paris Agreement

The principle of supplementarity of the Kyoto Protocol required that market-based mechanisms serve as a complement to domestic mitigation efforts rather than a substantive means for a state compliance with the treaty. Despite its significance in promoting environmental integrity and prioritising direct action, this principle is absent from the legal framework of the Paris Agreement. This article examines the potential for the principle’s re-emergence within the mechanisms established under Article 6 of the Agreement. Through an analysis of the Kyoto Protocol’s implementation of supplementarity, the article highlights its mixed quantitative and qualitative applications, as well as the associated challenges. It then explores how elements of this principle persist implicitly within the Paris Agreement’s Enhanced Transparency Framework and the regulatory framework of Internationally Transferred Mitigation Outcomes (ITMOs). The decentralised nature of these mechanisms provides states with opportunities to adopt supplementarity thresholds through bilateral or regional arrangements. Also, the Paris Agreement’s CMA has the opportunity of offering guidance on supplementarity through a decision on safeguards and limits. The article concludes that reviving supplementarity under the Paris framework is essential to address risks such as over-reliance on ITMOs, overproduction of carbon units, and diminished domestic mitigation. By fostering robust state practices and regulatory safeguards, the principle could enhance environmental integrity, balance market mechanisms with domestic mitigation action, and strengthen global climate governance.