World leaders from more than 195 countries are hammering out details to address the challenges of climate change, including establishing rules for a carbon market that is set to help countries finance the decarbonization of their economies.
The controversial carbon market concept falls under Article 6 of the Paris climate agreement and has dominated negotiations at the 25th Conference of Parties (COP25) to the UN Framework Convention on Climate Change. Countries, including small island states, hope to agree during the COP on the rules for the technical text that could "make or break" achievement of the goals set out in the 2015 Paris Agreement.
Article 6: Carbon markets
Since 2015, almost 190 nations have ratified the historic Paris climate agreement, which aims to limit global temperature rise to no more than 2 degrees Celsius above pre-industrial levels by the end of this century (ideally holding it at 1.5 degrees). But current reduction targets submitted by some countries remain unrealistic if the Paris agreement's goal is to be reached. Article 6 establishes the foundation for market-based climate measures after 2020, and it could incentivize countries to raise their climate-reduction ambitions.
Simply put, carbon trading is a market-based system aimed at reducing greenhouse gases that contribute to global warming, particularly carbon dioxide emitted by burning fossil fuels.
With climate change a present threat, economists came up with the idea of trading the right to pollute, creating what they believe is a financial incentive to curb emissions. It is the process of buying and selling permits and credits to emit carbon dioxide.
Yet carbon trading has its critics, not least because carbon dioxide emissions in industrialized countries are not declining at the necessary rate to avert catastrophic climate change.
There’s always more to the story
Negotiators from different countries and country groupings have been going back and forth on the issue for years, and COP25 seems to be no different.
Brazil is holding out on double-counting, which refers to when a country selling a carbon credit claims the underlying emissions reduction for itself while, at the same time, the country buying the credit also claims the same emissions' reduction. Essentially, a form of cheating. When an emission-reduction credit or offset is sold by a country, it seems reasonable for that country not to count it toward its own climate target. Brazil disagrees. Meanwhile, the European Union says “we want to find consensus while managing potential risks,” which is a good way of not saying much.
AOSIS, 1.5 degrees and carbon markets
The lack of decisive climate action is one issue, but added to this challenge is that instead of making effective progress, the rules COP25 negotiators are shaping to carry out the Paris Agreement’s Article 6 could worsen carbon emissions.
That's because Article 6 lacks rules to protect native forests. Instead of preserving forests, these rules will promote transforming forests into monoculture tree plantations - providing minimal carbon sequestration and no ecosystem services, while wreaking havoc on biodiversity. The particular point is a major point of contention among developing countries whose economies and societies are built on the conservation of their native forests.
According to activists at COP25, delegates are working to hide emissions and allow UN carbon accounting loopholes. One key aspect of Article 6 found in the original Paris Agreement that guaranteed “the protection of human rights” was deleted from a revised draft Saturday night, as was verbiage assuring civil society and indigenous consultations.
The Alliance of Small Island States (AOSIS) says it does not support activities that continue to harm the earth and all living things. According to Greenpeace, Article 6 is a “carbon trafficking scheme.”
AOSIS countries stand for the 1.5-degree goal, which carbon markets stand the risk of competing against. Members of AOSIS say any deal that is reached on Article 6 must be consistent with the 1.5-goal, transcend mere offsetting and deliver an enhanced stream of resources for the Adaptation Fund.
COP25 has been touted as a “launchpad" for "significantly more climate ambition,” but it appears to resemble more a black abyss of indecision. And while deliberations continue, island states continue to be negatively impacted by climate change.