UN calls for harmony on carbon markets as Article 6 talks recommence

The UN's climate chief has called on climate negotiators to overcome differences and find consensus on key climate solutions such as Article 6 of the Paris Agreement and climate finance at the Bonn Climate Change conference.

"We must also move towards better carbon markets by making progress on Article 6 here in Bonn," said Simon Stiell, executive secretary of the United Nations Framework Convention on Climate Change at the opening session of the climate summit in Bonn.

Finding a compromise around Article 6 of the Paris Agreement, which sets the rules for global trade in greenhouse gas emissions reductions, has been very difficult, mainly due to the wide difference between key parties on issues related to environmental integrity.

"Getting these markets to work can unlock more funding for national climate plans and adaptation," said Stiell. "That's why we're convening parties and stakeholders during these meetings, to build consensus on a way forward at COP29."

Deep divisions

Negotiations on Article 6.4 of the Paris Agreement at 28th UN Climate Change Conference failed dramatically as many parties adopted polarizing positions, showing little room for maneuver.

Many were hoping the operationalization of Article 6.4, which would have provided a new structure for a global carbon market, would have been finalized at COP28 but talks fell apart.

One of the main sticking points for Article 6.4 was the rules around carbon removal, with many saying the guidance on environmental integrity wasn't strong enough.

Many in the carbon markets are hoping for some parties and negotiators to be more open and do more to find a consensus especially on matters related to carbon removal and project methodology.

"The lack of consensus at COP28 in Dubai called for better communication between parties and stakeholders ahead of the negotiating sessions, so compromises can be found, and implementation can move forward in this critical decade," the International Emissions Trading Association said in a report ahead of the Bonn Climate change conference.

"We urge Parties to make progress at [Bonn] and find acceptable landing zones ahead of COP29 in November."

Countries also failed to agree key details to do with the legal clarity under Article 6.2 at COP28, which sets out rules for country-to-country carbon-credit deals.

But Article 6.2 continues to be operational, after major guidelines were agreed at the COP26 summit in Glasgow in November 2021.

Article 6.2 sets out a system of national accounting for greenhouse gas emissions, with common principles that countries can adopt to allow cross-border exchanges of credits.

Climate finance at COP29

Stiell also urged parties to make "serious progress" on climate finance, which is expected to dominate COP29 talks.

Global leaders are under pressure to build a new global climate finance framework, known as the New Collective Quantified Goal on Climate Finance at COP29 in Baku.

"Here in Bonn, I urge you to move from zero-draft to real options for a new collective quantified goal on climate finance," he said. "We cannot afford to reach Baku with too much work still to do ...We need more climate finance while we negotiate a future goal."

Climate finance refers to all financial flows addressing the causes and consequences of climate change.

Making progress on climate finance has not been easy due to the divergence in opinion between developed and developing countries.

Developing nations have continuously raised concerns, saying they are unable to pledge further action unless they receive sufficient funds, while developed nations have shown a reluctance to significantly ramp up climate finance.

In his speech, Stiell also warned leaders and policymakers that the world is headed for 2.7 C temperature rise, even as the road ahead to keep to a 1.5 C rise continues to be "long and steep."

"Respectful disagreements are part of this process, but they must not be its defining feature or its outcome," he said.

"I urge you to come together, and to overcome differences. This is a moment not for trying to try, but for finding solutions and forging pathways forward."

This comes as world leaders agreed on a final text of the global stocktake at COP28, which included "transitioning away" from fossil fuels and working "toward the phasedown" of unabated coal.

Many considered this a positive step with a clear signal to reduce fossil fuels. However, others viewed it as a compromise, as the document did not include the word phaseout.

Under the Paris Agreement, countries have committed to limiting global warming to 1.5 C and that greenhouse gas emissions must peak before 2025 at the latest and decline 43% by 2030.