COP24: Carbon market talks go downhill

As the 24^th Conference of Parties (COP24) to the United Nations Framework Convention on Climate Change (UNFCCC) at Katowice, Poland, comes to a close, the carbon market negotiations on the rules for implementing Article 6 of the Paris Agreement have spiraled to an all time low.

Textual proposals from the ministerial consultations on Article 6 during the second week of COP24 were released on December 13. It illustrated which of the preivously bracketed options under the different Article 6 elements had been agreed upon or left for further negotiation. The results are unfortunately grim. It was shocking to see how years of progress on drafting the carbon market rules have taken to the worse in a matter of few days.

Fine-tuning of some of the technical aspects under sub-article 6.2 (concerned with cooperative approaches and internationally transferred mitigation outcomes  or ITMOs), and sub-article 6.4 (Sustainable Development Mechanism  or SDM) has been left for COP25 in 2019, and will be based on the Subsidiary Body for Scientific and Technological Advice’s (SBSTA’s) recommendations and guidance. Similarly, sub-article 6.8 (non-market approaches) has also been relegated to the SBSTA for guidance, which unlike the other sub-articles, largely lacks content.

Some of the key issues that render the environmental integrity of the Paris carbon markets questionable are that of the Overall Mitigation of Global Emissions (OMGE) provision and the transition of the Kyoto Protocol.

OMGE has been stipulated under sub-article 6.4 with the aim of delivering emission reductions that go beyond offsetting through the buying of carbon credits. The ambitious options of levying an automatic or discounted cancellation on the transfer of emission reductions, as proposed by the Alliance of Small Island States (AOSIS), have been removed.

Parties have instead settled down with the option of a voluntary cancellation of emission credits. While it may be a way to achieve NDC targets through domestic emission reductions, it is unlikely to generate any additional global emission reductions. 

The transition of emission credits from the Kyoto protocol is still on the table. Albeit bracketed, parties have asked the SBSTA to provide recommendations and undertake further work during 2019 on the provisions of transitioning the Kyoto Protocol to SDM — specifically in terms of the conditions necessary to accept Kyoto credits in the new mechanism and the transition of the Kyoto methodologies and accreditation standards to SDM.

The Kyoto mechanism saw an array of environmentally detrimental problems, including cheap credits, outsourcing of emission credits, corruption and non-additional projects, which subsequently left the overall emission reductions of the mechanism to doubt. Including projects from the Kyoto Protocol would stifle any progress towards achieving overall global emission reductions and the Paris goals, and deem the SDM as environmentally destructive.

With countries like India pressing on a Kyoto Protocol transition to please the likes of the private sector rather than bringing actual greenhouse gas (GHG) reductions, carbon markets like the proposed SDM are surely doomed to fail.

With just hours left to decide the fate of humanity, the only hope left is for high ambition parties, such as the Least Developed Countries, the EU and island nations to continue pushing for higher ambition and to salvage the draft text by helping other countries realize that the current carbon market provisions will lead to a repeat of the Kyoto Protocol experience.

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