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This report summarizes key lessons learned from the Kyoto Protocol's Clean Development Mechanism (CDM) and Joint Implementation (JI) for the new Article 6.4 mechanism of the Paris Agreement. The report first provides an overview of the issuance and use of carbon credits under these mechanisms. This is followed by an assessment of what elements of the existing mechanisms could be transferred to the Article 6.4 mechanism. Some provisions from the CDM can be transferred with only minor adjustments as they are the result of substantial refinement and overhaul. This includes the rules and regulations for the project cycle, accreditation of auditors, validation and verification, provisions to ensure transparency and the governance structure. However, in other areas, Article 6.4 rules should be strengthened compared to the CDM and JI, mainly with regard to demonstrating additionality, quantifying emission reductions, addressing non-permanence and social and environmental safeguards. Based on the experiences with CDM and JI, we recommend that mitigation activities under the Article 6.4 mechanism should be considered 'high-hanging fruits', enhance ambition, have a high likelihood of additionality, provide co-benefits for other sustainable development targets, and ensure that emission reductions can be reasonably attributable to the mitigation activity.

This study assesses whether existing international carbon market methodologies for determination of additionality and baselines and monitoring, particularly those from the Clean Development Mechanism (CDM), can be adjusted to transition to the Article 6.4 mechanism. We highlight the necessity of drawing from the experiences of the Kyoto Protocol. CDM methodologies need to be modified to align with the more rigorous requirements of Article 6.4 of the Paris Agreement. Reaching consensus among Article 6.4 Supervisory Body (SB) members on developing a methodology guidance has been challenging and shows that there is a wide range of interpretation of the Article 6.4 methodology requirements. On this basis, we discuss different options to operationalise the Article 6.4 methodology requirements and focus on the option to develop overarching methodological tools that can be applied to make CDM methodologies "Article 6.4 proof". We illustrate this approach by applying it to two CDM methodologies, ACM0005 ("Increasing the blend in cement production") and ACM0006 ("Electricity and heat generation from biomass"). For these methodologies, we propose specific adjustments to ensure alignment with Article 6.4 requirements, particularly regarding additionality determination, avoidance of lock-in of emissions, quantification of emission reductions and monitoring, reporting, and verification (MRV).