COP 25: Countries Don't Need to Wait for the UN To Boost Climate Ambition Through Carbon Markets
Statement from Nathaniel Keohane, EDF Senior Vice President for Climate
(MADRID – Dec. 15, 2019) After a fortnight marked by rancor and disappointment but little progress, countries left the UN climate talks in Madrid having failed to reach agreement on major issues including guidance for Article 6 of the Paris Agreement on climate change, which relates to international cooperation among countries through carbon markets. Importantly, the lack of a decision does not prevent countries from cooperating through markets or international trading, or from using market-based policies to meet their national targets. Indeed, the Paris Agreement itself acknowledges that countries may use international emission transfers to meet their Nationally Determined Contributions (NDCs). In the closing plenary, several countries acknowledged their intention to continue with international cooperation through carbon markets, even in the absence of agreement at COP 25. Carbon markets provide a critical tool for countries to enhance ambition: Economic analysis by EDF shows that carbon markets could achieve nearly double the emissions reductions that countries have committed to so far under the Paris agreement, at no extra cost.
“COP 25 showed that the yawning gap between what citizens are demanding on climate action, and what UN negotiations are delivering, is wider than ever. Carbon markets can help fill that gap by promoting international cooperation that allows countries to cut greenhouse gas emissions faster and deeper than they can on their own.
“But after negotiators failed a second year in a row to agree on guidance for markets, it’s time to move on. Countries that are serious about using carbon markets to increase ambition should move forward to set their own strong rules for high-integrity international emissions trading. Such a coalition of carbon markets could pave the way for faster, deeper cuts in greenhouse gas emissions. There’s no need to wait for the UN—and no time to waste.
“The spotlight now shifts to the International Civil Aviation Organization (ICAO), which will cap emissions from international flights beginning in 2021 via the first carbon market for a major global sector (known as CORSIA). As with any market, getting the rules right will be critical to success. In March, ICAO’s Technical Advisory Board will make final recommendations to the ICAO Council on which offset programs should be eligible for use by airlines to meet their obligations under CORSIA. With the COP having failed to allow CDM credits to be used for the Paris Agreement—or for any other compliance purpose—ICAO should follow suit.”
Nathaniel Keohane, Senior Vice President, Climate
Additional observations from Nathaniel Keohane about COP 25:
- Multilateralism: “Some may claim that the inability of countries to reach consensus on all rules for carbon markets under the Paris Agreement constitutes a failure of multilateralism. That view is wrong. The overwhelming majority of countries in Madrid were ready to move forward on a strong set of rules for accounting for market transactions with integrity. That those same countries refused to bend to Brazil’s demands for a double-counting loophole and massive use of CDM tons is a success of multilateralism and a bright spot of COP 25.”
- U.S. role: “The United States undermined its own interests by not being at the talks at a political level.”
- Methane: “The world needs urgently to slow the rate of warming, and one of the quickest, most cost-effective opportunities to do so is reducing methane emissions from oil and gas production. That makes oil and gas methane a prime candidate for countries to include in their updated Nationally Determined Contributions, as one means of ramping up ambition in the lead-up to next year’s COP.”
- Creating more resilient oceans and fisheries: “Dubbed the ‘Blue COP’, Madrid highlighted the need for the ocean to be part of the solution set for climate change. Fisheries around the world are already seeing the impacts of a warming planet, which will only worsen if we fail to adapt. While every country will see changes to their fisheries, the impacts will be disproportionately felt in equatorial regions. With swift action, climate-responsive fisheries management can help nearly every country be better off by the end of the century compared to business-as-usual.”
- EU Green Deal: “With the European Green Deal, European Commission President von der Leyen is demonstrating EU leadership on climate ambition, both through the commitment to climate neutrality by 2050 and by proposing to increase the EU’s Paris Agreement target to a 55% reduction below 1990 by 2030. The EU Emissions Trading System (EU-ETS) will continue to be the EU’s cornerstone policy for delivering on this ambition. We look forward to seeing how these commitments will be implemented as EU law. With the impacts of climate change becoming more apparent by the day, it is critical that other countries come forward to increase their ambition in advance of COP 26 in Glasgow next year.”
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