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Experts say nations may eye upping climate goals despite no deal on market tools

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Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

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Experts say nations may eye upping climate goals despite no deal on market tools

Although recent climate talks failed to result in agreement on international market mechanisms for cutting emissions, experts say enough momentum and other related guidelines may be in place for nations nevertheless to begin considering ways to ratchet up their ambitions.

Those talks, which took place in Poland in December 2018, resulted in more than 195 nations, including the U.S., adopting rules for implementing the Paris Agreement on climate change but punting on the more thorny issues of market mechanisms for cutting emissions and ensuring that each tonne of carbon dioxide released into the air is counted yet not double counted among countries. President Donald Trump has pledged to pull the U.S. from the agreement but cannot formally do so until November 2020.

Parties to the Paris accord aim to reduce greenhouse gas emissions enough to limit global warming ideally to 1.5 degrees Celsius and to 2 degrees at the most from preindustrial levels in this century. Nations in 2020 will have their first chance to ratchet up their initial ambitions; their current pledges fall far short of the emissions reductions needed to achieve their individual targets.

Dirk Forrister, president and CEO of International Emissions Trading Association, said nations have agreed to the implementation rules they need to consider ratcheting up their goals.

"Countries want to know what flexibilities they have to work with and ... what's going to be available in terms of market mechanisms before they think about raising ambitions," Forrister said during a Jan. 16 webinar hosted by the Center for Climate and Energy Solutions, or C2ES. At the same time, "now we've got a kind of basic rule and some legitimacy under that for countries to start planning and looking for more cooperation and set the stage for enhancing ambitions."

C2ES Senior Advisor Sue Biniaz, who was previously a climate lawyer for the U.S. State Department, noted that parties to the Paris deal never planned to authorize trading. However, nothing in the agreement prevents parties from engaging in coordination, she said.

A growing number of nations and U.S. states have adopted or are looking to adopt reduction market schemes, which creates a possibility that the language in Article 6 of the Paris accord calling for parties to agree to a market mechanism could become irrelevant if those nations and states already have worked out such mechanisms, Forrister said.

Chile has agreed to host the next set of talks, which could occur later in 2019 or in early 2020. Meanwhile, U.N. Secretary General António Guterres plans to hold a U.N. climate summit in New York City in September.