Implementing carbon markets can incentivise climate action and emission reductions; however, the state of current negotiations makes that questionable
Despite climate change making its presence felt by battering Bangkok with heavy rains in the past few days, the current weather conditions have not spurred the world’s negotiators to swiftly decide on a working draft of the Paris Agreement “Rulebook”, leave alone the looming deadline for its final adoption at the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP24) in Katowice, Poland, this December. The pace of negotiations at the Bangkok climate intersession is lethargic and this follows through the current discussions around Article 6 of the Paris agreement, the article concerned with carbon market mechanisms.
Co-chairs have provided negotiators with informal tools and have even reorganised the informal documents in a manner that can be read like draft rules, modalities and procedures for Article 6, and help expedite the negotiation process of deciding its provisional elements. Regardless, negotiators continue to reverberate the same propositions for Article 6 as they did in the Bonn climate intersession in May. Decidedly, the state of Article 6 negotiations is business-as-usual.
Continuing mistakes of the past
Given the environmentally deleterious problems (such as outsourcing of emission targets, cheap credits corruption, non-additional projects etc.) faced in the previous carbon market mechanism, Parties like the Like Minded Developing Countries (LMDC), Russia and the African Group of Negotiators (AGN), continue to support the need to transition projects from Clean Development Mechanism (CDM) and Joint Implementation (JI) under the Kyoto Protocol into Paris’ New Market Mechanism (NMM). Discussions with some carbon market experts who attended the Centre for Science and Environment's side event in Bangkok on the NMM, confirm our view that including projects from the Kyoto Mechanisms under NMM will be highly environmentally detrimental. Carrying forward environmentally non-additional projects, such as “supply side energy efficiency” projects and “clean” fossil fuel-based projects that were prevalent under the CDM, will cripple efforts towards achieving overall emission reductions and deem the NMM non-credible and environmentally pernicious.
Focus on markets neglects non-market environmental benefits
While the market sections of Article 6 are receiving plenty of attention in Bangkok, non-market approaches under Article 6.8 are currently being neglected. The current chair’s note/tool on Article 6 relegates Article 6.8 to an annex, which is most likely to be decided on after COP24 next year. The problem with this oversight is that markets are not suited to solving all climate problems, especially those related to the depletion of major carbon sinks.
Forest and land-use sectors, in particular, are not suited to a private own-and-trade model. The incentive for profit making from trading cheap land sink reductions leads to unsustainable practices such as monoculture plantation and displacement of forest dependent communities. The political movement in several developing countries, India included, is to collectivise ownership of forests and forest rights among the communities who directly depend on them so that they reap the ecological and economic benefits. It is critical that the international negotiations on markets do not reverse this trend by including them under the market sections of sub articles 6.2 and 6.4.
The outcomes of Article 6 at the Bangkok intersession will determine the fate of many communities in developing countries as well as the path the world will take towards addressing climate change. It is imperative that negotiators take good heed of the lessons learned from the past mechanisms and prevent further environmental and humanitarian harm.
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