How A Dispute Over Carbon Market Regulations Tripped Up COP25 in Madrid

Kate Dooley, University of Melbourne

The United Nations’ COP25 climate talks concluded on Sunday morning in Madrid, almost 40 hours overtime. After two weeks of protracted talks meant to address the planetary warming emergency, world leaders spectacularly failed to reach any real outcomes.

The degree to which wealthy nations, including Australia, blocked progress on critical points of debate incensed both observers and country delegates.

These points included robust rules for the global trading of carbon credits, increased commitments for finance to help developing nations tackle climate change, and most importantly, raising ambition to a level consistent with averting catastrophic climate impacts.

High hopes

COP25 was a conference of “parties”, or nations, signed up to the Paris Agreement, which takes effect in 2021. I attended the conference as an observer.

Emissions reduction targets of nations signed up to Paris put Earth on track for a 3.2℃ temperature increase this century. However the Intergovernmental Panel on Climate Change says warming must be kept below 1.5℃ to avoid the most devastating climate impacts.

Much was riding on the outcome in Madrid. However, it failed to deliver.

One of the key agenda items was Article 6 of the Paris Agreement, involving international carbon trading between nations.

The previous COP in Poland failed to reach consensus on these trading rules, and after this latest meeting, many contentious issues remained unresolved. These include:

• how to ensure that an overall reduction in global emissions is achieved and that the rules prevent double counting (or emissions reduction units being counted by both the buying and selling nation)
• whether a levy would be applied to proceeds from carbon trading to finance adaptation in developing nations
• the recognition of human and indigenous peoples’ rights, and social and environmental safeguards, given the harms caused by previous carbon trading mechanisms
• critically for Australia, whether countries could use “carryover” carbon credits from the Kyoto Protocol to meet commitments under the Paris Agreement.

The question of Kyoto credits

Australia was pushing to allow use of Kyoto Protocol units, for which it drew scathing criticism from other nations, international media and observers. It plans to meet more than half its Paris target via this accounting loophole.

Brazil, India, South Korea and China also want to carry over credits earned under the Clean Development Mechanism, a trading scheme under Kyoto.

No consensus was reached. The negotiations for rules for carbon markets will now continue at COP26 in Glasgow next year, just weeks out from the Paris Agreement’s start date.

The argument will not be easily resolved. Five of the last seven COP meetings failed to reach a decision on carbon market rules, indicating the extent of international divisions, and calling into question the disproportionate focus on carbon trading, given its limited ability to address climate change.

In Madrid, 31 nations signed up to the San Jose principles, seeking to ensure environmental integrity in carbon markets. Upholding these principles would mean emissions must go down, not up as a result of trading carbon.

Other failures

The conference also discussed measures to strengthen the governance and finance arrangements of the Warsaw International Mechanism, a measure designed to compensate poor nations for climate damage.

Little progress was made on mobilising finance from developed nations. The US, which will soon exit the Paris Agreement, played a key role in stymieing progress. It resisted efforts for broad governance arrangements, and pushed for language in the rulebook which would exclude high-emitting nations from liability for the loss and damage experienced by vulnerable countries under climate change.

At Glasgow, all nations under Paris are required to submit new emissions reduction commitments. It was widely expected that the Madrid meeting would strongly urge nations to ensure these targets were more ambitious than the last. Instead, the final text only “reminds” parties to “communicate” their commitments in 2020.

‘Crime against humanity’

When the COP finally closed on Sunday morning, the meeting had failed to reach consensus on increasing emissions reduction ambition to the level required.

The results are disheartening. The world has let another chance slip by to tackle the climate crisis, and time is fast running out.

The implications of this were perhaps summed up best by the low-lying Pacific island state of Tuvalu, whose representative Ian Fry said of the outcome:

There are millions of people all around the world who are already suffering from the impacts of climate change. Denying this fact could be interpreted by some to be a crime against humanity.

Kate Dooley, Research Fellow, Climate and Energy College, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.