Climate and us | At COP 26, going beyond the net-zero focus

There are deep fault lines on the issue of carbon markets, loss and damage, and a transparency mechanism (review of actions taken by every country), which need to be finalised and embedded in the Paris Rulebook.
Carbon markets, which are in Article 6 of the Paris Agreement, are touted to be one of the most efficient tools to keep mean global temperature rise under 2 degree C by capping global emissions globally after 2020 (Pratham Gokhale/HT Archive) PREMIUM
Carbon markets, which are in Article 6 of the Paris Agreement, are touted to be one of the most efficient tools to keep mean global temperature rise under 2 degree C by capping global emissions globally after 2020 (Pratham Gokhale/HT Archive)
Updated on Oct 26, 2021 08:05 AM IST
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ByJayashree Nandi

Net-zero emissions by 2050 and the effort to keep global warming under 1.5 degree C may be the overarching theme of COP 26 this year, but there are other significant issues that need resolution.

There are deep fault lines on the issue of carbon markets, loss and damage, and a transparency mechanism (review of actions taken by every country), which need to be finalised and embedded in the Paris Rulebook.

More than 195 countries had evolved and adopted the Paris rulebook – a set of guidelines for implementing the 2015 Paris Agreement at COP 24 in Katowice, Poland in 2018. But all issues related to the rulebook were not resolved or finalised in Poland. According to the World Resources Institute, the rulebook explains how countries should review their progress, individually and collectively, so that the goals of theParis Agreement are met.

The debate over carbon markets

Carbon markets, which are in Article 6 of the Paris Agreement, are touted to be one of the most efficient tools to keep themean global temperature rise under 2 degrees C by capping global emissions globally after 2020.

Simply put, when a country limits CO2 emissions through a project, it creates carbon credits, which can then be sold to another country which fails to meet its target. The United Nations Framework Convention on Climate Change calls it “an unused right to emit, measured in tonnes of CO2 equivalent”. Economists feel leaving CO2 emission reduction to market forces is an effective way to deal with the climate crisis because they make failure to control emissions expensive and generate money that can be used to transition to cleaner fuels.

Even when the price of carbon credits is relatively low, it can be effective in theoverall reduction of emissions. According to a paper published in the Proceedings of National Academy of Sciences of the United States of America last year, the European Union Emissions Trading System (EU ETS), which regulates EU’s carbon emissions from mainly energy production and large industrial polluters, saved more than 1 billion tons of CO2 between 2008 and 2016. This translates to reductions of 3.8% of total EU-wide emissions, the paper said.

But the experience with Kyoto era carbon markets has not been good. Centre for Science and Environment (CSE)’s book, Climate Change—Science and Politics, says the Clean Development Mechanism (CDM) under the Kyoto Protocol failed for a number of reasons. Developed countries could outsource all their reduction targets to CO2 reduction projects in developing countries while they continued to pollute unabated. The CDM mechanism did not differentiate between CO2 and other greenhouse gases such as hydrofluorocarbons which have a higher warming potential than CO2. But the use of CO2 is much more widespread in the economy and hence cheap credits were generated without altering overall CO2 emissions in many developing countries. Cheap credits were also generated in the forestry sector. CSE highlights that CDM may not have been effective at all and was mired in corruption and lack of transparency.

Under the Paris Agreement, countries will have to come out with a new market mechanism that doesn’t repeat the mistakes of theCDM era. Even before the shape and structure of the new carbon trading system are defined, there are logjams over several issues.

One of them is that developing countries like India have old unsold carbon credits from the CDM era. There are 4 billion unsold credits globally from theCDM era representing 4 gigatons of CO2 equivalent. Brazil, India and Australia have sought carryover of these credits. But experts say flooding the market with old credits could destroy the new market. India will continue to hold its position calling for carryover of old credits at COP 26, according to senior officials in the environment ministry. Will that mean another year of no resolution of Article 6? Most likely.

“Loss and damage”

Another issue on which the developed, developing and least developed countries are likely to lock horns is “Loss and Damage”.

Loss and Damage is a mechanism by which vulnerable countries such as small island states can be compensated for climate disasters. These can be both extreme events such as floods, extremely severe cyclones and slow onset events like sea-level rise or biodiversity loss. The mechanism to compensate affected countries hasn’t been decided upon.

According to some civil society organisations, there could be no resolution on this issue at COP 25 in Madrid because the United States had several reservations with the text as it does not want any liability. But with attribution in climate science improving, the demand for compensation is also likely to increase.

The Intergovernmental Panel on Climate Change (IPCC’s) sixth assessment report on Climate Change 2021: The Physical Science Basis, released in August, for example, is the most updated science on theclimate crisis. IPCC is highly confident of its findings because observational capabilities have vastly improved since the AR5 cycle in 2014. The attribution of extreme weather events to human influence has substantially advanced. This basically means that the scientific community can now attribute extreme precipitation, droughts, tropical cyclones etc to human influence. Some recent hot extreme events would have been extremely unlikely to occur without human influence on the climate system, the IPCC said.

This also makes it easier to hold big emitters accountable for damage. A small island, for example, can sue a large emitter with historical responsibility for not compensating for the loss. India will stand with the least developed countries on Loss and Damage.

“The floods this monsoon, unseasonal rains, severe cyclones have increased in frequency and severity. There is a 1.2-degree rise in global temperature and we are already seeing this. Island countries and all vulnerable nations need to be compensated for such events. We will support the least developed countries on Loss and Damage because we are also suffering. It needs to be resolved how this money will come through insurance or trust fund, etc,” a senior environment ministry official said on Friday.

India is also willing to contribute to compensation based on its share but also expects to be compensated for the damage. It will be interesting to see how the US, European Union, and China and other big emitters respond to this issue.

From the climate crisis to air pollution, from questions of the development-environment tradeoffs to India’s voice in international negotiations on theenvironment, HT’s Jayashree Nandi brings her deep domain knowledge in a weekly column

The views expressed are personal

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Saturday, November 27, 2021