COP26: Negotiators close in on international carbon market rules

Negotiators representing the world's governments were locked in talks Nov. 13 over the rules for international emissions trading as the UN Climate Change Conference ran into overtime in Glasgow, with COP26 President Alok Sharma vowing to conclude talks on the day.

Draft texts showed a narrowed down set of options for Article 6 of the 2015 Paris Agreement, where nations have locked horns over the rules for accounting and transferring emissions reduction credits.

Article 6 is one of the standout items yet to be agreed under the Paris rulebook, six years after the landmark treaty was signed in the French capital.

"The current text includes a package that would prevent all forms of double counting for compliance markets," said Kelley Kizzier, vice president for global climate at US-based non-governmental group Environmental Defense Fund.

"If negotiators achieve the right result, the rules would also, for the first time, make appropriate accounting adjustments available to voluntary carbon markets to address double counting concerns," she said in a statement late Nov. 12.

International negotiators were converging on a deal that would:

• eliminate double counting for transfers between each country's climate commitment, the so-called Nationally Determined Contributions
• eliminate double counting between NDCs and CORSIA, the UN's aviation emissions offsetting program
• establish the option of a corresponding adjustment for voluntary carbon credits
• establish that unadjusted credits used for voluntary purposes support countries in reducing their emissions through a range of measures.

Corresponding adjustments refer to the suggestion that a country transferring emissions reduction credits abroad would need to make an upward adjustment to its domestic emissions tally to avoid both countries claiming the reduction.

"If international negotiators can agree on these provisions, we could have a robust rulebook for avoiding double counting internationally," Kizzier said.

Still to be agreed under Article 6 were proposals to limit the use of Clean Development Mechanism credits (CERs) to those issued from 2013 onwards, and a mandatory sharing of 5% of credit proceeds with developing country adaptation funding.

Operational since the beginning of 2006, the Clean Development Mechanism produced CERs amounting to more than 2.9 billion tonnes of CO2 equivalent in the first commitment period of the Kyoto Protocol, 2008–2012. Limiting the use of these credits to those issued from 2013 onwards should help preserve current credit values in global carbon markets.

Coal, fossil fuel phase-out

In the latest overarching cover decisions draft document, meanwhile, a call on countries to accelerate the phase-out of unabated coal power and "inefficient fossil fuel subsidies" remained in place, as did a request for all parties "to revisit and strengthen the 2030 targets in their nationally determined contributions as necessary to align with the Paris Agreement temperature goal by the end of 2022."