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 governments from countries where GHG mitigation would entail high marginal costs (“partners”) cooperate with a government of a country with a potential of mitigation at low marginal cost (“host”), through the transfer of resources in exchange for credible emissions reductions (international transferred mitigation outcomes, ITMOs) beyond the Host’s NDC. A CAT agreement is to demonstrate the additionality of mitigation and avoid leakage. It minimises transaction costs by using existing commitments and monitoring frameworks and adopting an economy wide or multi-sector approach with the highest feasible level of aggregation, 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 about ITMO transfers;
- pre-commitment of total funds available for payments for ITMOs from partners;
- a pre-agreed price range for payments per ITMO, denominated in tonne CO2e of mitigation beyond the NDC;
- assessment of GHG mitigation results relative to the baseline using the host’s national emissions inventory;
- attribution of observed mitigation outcomes to a package of mitigation policies and actions;
- results-based payments from the partners to the host and the transfer of ITMOs from the host to partners.
A CAT takes a fundamentally different approach to ITMO transfers relative to project-based mechanisms or carbon market linking. Their baseline comprises the whole economy or a set of sectors of the host country, rather than particular projects or sectors. CAT contractual arrangements on ITMO transfers 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 (ITMOs) to achieve their mitigation targets