OXFORD CLIMATE SOCIETY
  • About
    • What We Do
    • Who We Are
    • Our History
    • Advisory Board
    • Our Sponsors
  • Events
    • Upcoming Events
    • Videos of Past Events
  • Education
    • The Oxford School of Climate Change
    • Capstone Projects
    • Climate Change and Policy Lecture series
    • COP information
    • Climate Library
  • Action
    • Sustainability Action Guide
    • Decarbonise Oxford
    • College Sustainability Workshops
    • Legacy Campaigns >
      • Sustainability in the Curriculum
      • Oxford Climate Action Plan
  • Media and Arts
    • RISE zine
    • Anthroposphere: The Oxford Climate Review
    • Interdiscplinary Fine Art
  • Blog
    • Articles >
      • International Climate Policy
      • Global Perspectives
      • What you need to know about...
      • Past Blogs
    • Event summaries
  • Get Involved
    • Join Our Teams
    • RISE Submissions
    • Subscribe to our Newsletter
  • Alumni Network
  • Contact
  • Donate

Past Blogs

A variety of blog posts

Carbon Markets-COP25 leaves Article 6 of the Paris Agreement unresolved

17/1/2020

0 Comments

 
By Olivia Oldham
Picture
Source: Conservation in a Changing Climate
What is Article 6?
Article 6 allows cooperation in order for states to achieve their Nationally Determined Contributions (NDCs) under the Paris Agreement (art 6.1). Article 6 sets up three mechanisms for cooperation:
 
  • Bilateral agreements between states to trade carbon credits (art 6.2)
  • A centralised, global carbon credit trading scheme, known as the Sustainable Development Mechanism (SDM), which states and the private sector can participate in (art 6.4)
    • To be agreed upon by the Conference of Parties (COP)
  • Non-market approaches (art 6.8)
 
The important thing to understand is that although the Paris Agreement briefly sets out the existence of these cooperation mechanisms, it doesn't detail the rules of how they will operate. Negotiations on these rules were meant to have concluded at COP24 in Poland in 2018, but they were carried over to COP25 in Madrid last December.
 
How do carbon markets work?
Carbon markets represent the idea that if an entity (a state, or sometimes a corporation) reduces its carbon/greenhouse gas emissions, it can claim a credit. It can then sell that credit at an agreed rate to another entity, enabling it to continue to emit at a higher rate.
 
Carbon markets are said to have several advantages. For example, they are argued to make global emissions reductions cheaper, theoretically enabling higher ambition/faster reductions. This is said to be because wealthier countries can pay less wealthy countries to implement mitigation measures which are cheaper to carry out in that country. One study showed that carbon markets can be used to achieve nearly double the emissions reductions aimed for in countries' current NDCs at no additional cost.
 
Whether or not carbon markets actually achieve their potential, they're pragmatically important because they are included in the emissions reduction plans of most countries – though the UK has stated that it doesn't plan to use carbon credits to reach its net zero goal.
 
Potential pitfalls of carbon trading?
  • Double counting: emissions reductions being counted both by the 'host' entity (i.e. the entity that actually made the reductions) and the 'recipient' entity (i.e. the entity that bought the credits)
    • Explicitly prohibited by art 6.5
  • Fraud
  • No real reductions: difficulties with quantifying emissions reductions means that in the past, carbon credits have been earned for projects that haven't actually reduced emissions. One European Commission-sponsored study found that only 2% of projects undertaken under the equivalent mechanism to the SDM under the Kyoto Protocol are actually likely to ensure real additional emissions reductions that are not overestimated
    • 'Hot air': when countries set under-ambitious targets, and then claim the 'extra' reductions (which are not additional, as they would have happened anyway) as credits
 
What happened in Madrid in December at COP25?
Matters on the table included:
  • How to ensure no double counting
  • How to ensure an OMGE ('overall mitigation in global emissions') rather than emissions in one place just being offset somewhere else without a net benefit
  • Whether and how to allow carbon credits accrued under the previous carbon trading scheme under the Kyoto Protocol to be 'carried over'
  • Whether specific reference should be made to human rights in the rules – as previous carbon offsetting regimes have resulted in large scale human rights abuses
 
No decision was reached despite COP25 going 44 hours overtime, a new record. In large part, this was because a few key countries dragged their feet on some of the key issues under discussion, in particular about the ability to use 'carry-over' Kyoto credits (Brazil & Australia in particular), and the inclusion of loopholes enabling double-counting (particularly Brazil).
In the end, all that was decided was that negotiations will more or less start again at an intersessional meeting in June, and at COP26 in Glasgow in November 2020, under 'Rule 16' of the UN climate process.
 
How drastic is the failure to negotiate Article 6?
The lack of agreement is deeply frustrating, yes, and it stymies the initiation of a new global carbon credit trading mechanism. But there is still some hope:

  • Article 6.2 allows for bilateral agreements, so countries wanting to get on with it now could still do so. The problem is, they won't have the benefit of any UN guidelines or rules, meaning that the potential pitfalls of carbon trading might rear their ugly heads.
  • 31 countries, a bloc led by Costa Rica known as the Unconventional Group, signed up to the San Jose principles—minimum standards to ensure the integrity of the global carbon market in the absence of any COP-sanctioned rules
    • These principles rule out double counting, and prohibit the use of carry-over credits
  • Some argue that failing to reach an agreement is better in the long term than reaching a bad agreement which undermines the purpose of the whole Paris Agreement
 
Overall, it's very important that a functioning set of rules which achieves the purpose of article 6 to enable "higher ambition in [countries'] mitigation and adaptation actions and to promote sustainable development and environmental integrity" (art 6.1) is agreed upon at COP26. However, the lack of agreed rules doesn't actually prevent ambitious, committed entities from using cooperation strategies to reduce their emissions already.
 
Resources
  • Paris Agreement
  • https://www.climatechangenews.com/2019/12/02/article-6-issue-climate-negotiators-cannot-agree/
  • https://ec.europa.eu/clima/sites/clima/files/ets/docs/clean_dev_mechanism_en.pdf
  • https://www.edf.org/climate/implementing-paris-climate-agreement
  • https://www.edf.org/sites/default/files/documents/Power_of_markets_to_increase_ambition.pdf
  • https://www.carbon-mechanisms.de/en/introduction/the-paris-agreement-and-article-6/
  • https://carbonmarketwatch.org/2019/12/15/cop25-no-deal-on-un-carbon-markets-as-a-number-of-countries-reject-loopholes/
  • https://www.carbonbrief.org/cop25-key-outcomes-agreed-at-the-un-climate-talks-in-madrid
  • https://www.climatechangenews.com/2019/12/14/australia-brazil-carbon-credits-will-put-1-5c-reach-ten-countries-say/
  • https://www.climatechangenews.com/2019/12/16/cop25-achieved-next/
  • https://www.climatechangenews.com/2019/12/09/carbon-offsets-patchy-human-rights-record-now-un-talks-erode-safeguards/
  • https://cambioclimatico.go.cr/press-release-leading-countries-set-benchmark-for-carbon-markets-with-san-jose-principles/
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    OCS Media Team

    The latest in climate science, policy, perspectives and more from the OCS team.

    Archives

    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    October 2019
    September 2019
    May 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017

    Categories

    All
    Adaptation
    BEIS
    Climate Justice
    Communication
    COP23
    COP24
    COP26
    Coronavirus
    DEFRA
    Eco Guide
    Economics
    Event Summary
    Extreme Weather
    Food
    Food Reviews
    Fossil Fuels
    Gender
    Global Perspectives
    Government
    Impacts
    International
    Local
    Nature
    Oceans
    Plastic
    Policy
    Pollution
    Race
    Solutions
    UK
    UNFCCC
    USA
    Women And Climate Change

    RSS Feed

Developing informed climate leaders
www.oxfordclimatesociety.com
  • About
    • What We Do
    • Who We Are
    • Our History
    • Advisory Board
    • Our Sponsors
  • Events
    • Upcoming Events
    • Videos of Past Events
  • Education
    • The Oxford School of Climate Change
    • Capstone Projects
    • Climate Change and Policy Lecture series
    • COP information
    • Climate Library
  • Action
    • Sustainability Action Guide
    • Decarbonise Oxford
    • College Sustainability Workshops
    • Legacy Campaigns >
      • Sustainability in the Curriculum
      • Oxford Climate Action Plan
  • Media and Arts
    • RISE zine
    • Anthroposphere: The Oxford Climate Review
    • Interdiscplinary Fine Art
  • Blog
    • Articles >
      • International Climate Policy
      • Global Perspectives
      • What you need to know about...
      • Past Blogs
    • Event summaries
  • Get Involved
    • Join Our Teams
    • RISE Submissions
    • Subscribe to our Newsletter
  • Alumni Network
  • Contact
  • Donate