A Climate Action Team (CAT) model is an agreement among a small group of cooperating governments, under the umbrella of Article 6.2 of the Paris Agreement. Through a CAT, one or several Partners with high marginal cost mitigation potential cooperate with a Host, with lower marginal cost potential, through the transfer of resources in exchange for credible emissions reductions beyond the host’s NDC. A CAT agreement can demonstrate the additionality of mitigation and avoid leakage. It minimises transaction costs by using existing commitments and monitoring frameworks and adopting an economy wide approach, as opposed to project-based approaches.
The CAT agreement comprises:
- a multi-year emissions baseline that uses the host’s NDC as a starting point for negotiation;
- pre-commitment of total funds available for payments from partners;
- a pre-agreed price range for payments per ton of mitigation beyond the NDC;
- assessment of results relative to the baseline using the host’s national emissions inventory;
- results-based payments from the partners to the host and the transfer of mitigation from the host to partners.
A CAT takes a fundamentally different approach to international transfers relative to project-based mechanisms or carbon market linking. Their baseline comprises the whole economy of the host country, rather than particular projects or sectors. CAT contractual arrangements can be complemented by collaborative activities, technical support agreements, and relationships with private investors and private companies with compliance obligations under policy instruments that mobilize mitigation, for instance an emissions trading system (ETS).
 Article 6.2 of the Paris agreement allows parties to use Internationally transferred mitigation outcomes to achieve their mitigation targets