Climate Change

COP24: Consensus on global emission reduction key to carbon markets’ success

All nations must make efficient use of the few days left of the Katowice conference since till now they have been struggling to come to a consensus on setting up carbon markets

 
By Padmini Gopal
Last Updated: Thursday 13 December 2018
COP24
Spodek hall arena and the International Conference Centre in Katowice, where COP24 is being held. Credit: Getty Images Spodek hall arena and the International Conference Centre in Katowice, where COP24 is being held. Credit: Getty Images

Negotiations on the rules for Article 6 of the Paris Agreement—the Article concerned with the setting up of carbon markets—moved at snail’s pace over the first week of the 24th Conference of Parties (COP 24) to the United Nations Framework Convention on Climate Change (UNFCCC) at Katowice, Poland.

With just a few days left to agree on the terms for carbon markets, parties have been struggling to come to a consensus on certain elements of Article 6.

Some progress has been made regarding sub-article 6.2, which is concerned with cooperative approaches and internationally transferred mitigation outcomes (ITMOs). But, many elements of sub-articles 6.4 (Sustainable Development Mechanism) and 6.8 (non-market approaches) have been pushed over to be further developed under the guidance of the Subsidiary Body for Scientific and Technological Advice (SBSTA) and then considered in COP25 in 2019.

One of the main issues under contention within Article 6 discussions is the element of Overall Mitigation of Global Emissions (OMGE), which is stipulated under sub-article 6.4 of the Paris Agreement. This provision was made with an aim to deliver emission reductions that go beyond solely offsetting.

The need to establish OMGE resulted from having learned from the experiences of the Clean Development Mechanism (CDM)—a mechanism that is known to have increased emissions by replacing domestic emission reductions.

There are variations proposed by parties on how to exactly effectuate the achievement of OMGE, including an automatic cancellation or a discounted cancellation, voluntary cancellation or just engaging in the SDM itself. When it comes to an automatic cancellation or a discounted cancellation, a fixed percentage of emission reductions is set aside and not used by any country towards their NDC.

Essentially, these emission reductions would be attributed to the benefit of the atmosphere and no other entity. The only difference between these two options relates to which entity is responsible for making the cancellation—the registry or the host party before the emission reductions transfer.

Parties that are pushing for this ambitious option are those that are the most vulnerable and affected by climate change, namely the Small Island Developing States (SIDS) as they strive to ensure that the market mechanisms actually drive global emission reductions.

Voluntary cancellation, which refers to voluntarily taking certain emission reductions out of circulation to prevent further use, can be a good way to achieve emission reduction domestically and meeting NDC targets. However, it may not necessarily create additional emission reductions to achieve OMGE.

Accepting the SDM as it is as an option of creating OMGE would beg the question of how the SDM would be better in reducing emissions compared to the CDM—it would render the SDM as a CDM 2.0. Moreover, there would be no guarantee of countries taking any additional mitigation action with the savings that they may have gained from engaging in carbon markets.

Besides the usual fossil fuel culprits—the Arab Group—it was surprising to see parties that tout themselves to be climate leaders like the European Union and New Zealand push for the less ambitious OMGE options.

Given the pressing need for increased and prompt global ambition to limit warming to 1.5°C, it is essential that parties consider a cancellation of emissions during mitigation transfers as a way to achieve OMGE.

Doing so will, for the first time, acknowledge the Earth as an entity that is party to the overall outcome of carbon markets, while also drive down global emissions. Parties need to make the most efficient use of the few days that are left of this COP to draw a consensus on OMGE and Article 6, if the world is to make climate action progress. 

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