New carbon market tools key for India at COP25

Critical pending issues such as carbon markets, climate finance and loss and damage are likely to be raised at the United Nations Climate Change conference set to open in Madrid on Monday.

For India, Article 6 of the 2015 Paris Agreement that allows for a legal framework for market-based climate change mitigation mechanism will be significant because India and China had benefitted the most from the clean development mechanism (CDM)—an emissions trading scheme under the Kyoto Protocol (the first agreement between developed nations to reduce carbon dioxide emissions which came into force in 2005).

But in 2012, carbon prices started crashing which led to a collapse of the CDM mechanism.

A new carbon market mechanism under the Paris Agreement will be imperative for countries to deliver on their nationally determined contributions (NDCs), experts said.

“We are looking at resolution of issues relating to finance and Article 6. Also looking at acceptance to commitments of pre 2020. We will showcase the work of the country which is innovative an outstanding in many ways,” said CK Mishra, secretary, ministry of environment. One of the important pieces under the Paris Agreement for which rules were not drafted last year at COP24 at Katowice was Article 6.

“Article 6 is still under negotiation. We don’t know how the rules will turn out to be. It will benefit developing countries like India. The projects under CDM were very small but we are expecting very large, ambitious carbon trading projects under the new mechanism. It has to be resolved during this COP. We scientists are very concerned about the environmental integrity of such a market based mechanism. I am however not very hopeful about a resolution on loss and damage...,” said Professor NH Ravindranath, climate scientist and former Intergovernmetal Panel on Climate Change (IPCC) author.

Since 2001, over 8,000 projects in 111 countries under CDM have reduced or avoided 2 billion tonnes of CO2-equivalent and sparked investment of close to $304 billion in climate and sustainable development projects,” according to UN.

“The meeting of the Conference of Parties (COP) takes place days before the Paris Agreement is set to come into force (monitoring of NDC targets will begin from 2020). The mandate for COP25 is clear. Countries must finalise the Paris Agreement rule book and for the pending issue of carbon markets... The meeting will also see some hard political bargains as the issue of access to funds by vulnerable countries comes up for review — essentially compensation to those impacted by extreme weather,” said Aarti Khosla, director at Climate Trends—a Delhi based climate communications organisation.

The issue of loss and damage is particularly significant because the UN’s Emissions Gap Report 2019 last week said with the current pledges by countries to reduce carbon emissions, there is a 66% chance that warming will be limited to 3.2 degree C over pre-industrial levels by the end of this century. Loss and damage refers to irreversible climate impacts being faced by certain vulnerable parts of the world.

“...Developing countries are already bearing the brunt of the human and environmental costs of climate change. At the climate conference in Madrid, governments are set to begin negotiating financial support to repair the loss and damage caused by climate disasters...But developed countries – those most responsible for the climate crisis – including the US, EU, Australia and Japan, have spent years blocking concrete progress to provide funding for countries in the Global South most affected by rising global temperatures,” said Harjeet Singh, global climate change lead at ActionAid.

“There is no sign of a slowdown, let alone a decline, in greenhouse gases concentration in the atmosphere despite all the commitments under the Paris Agreement...,” said World Meteorological Organisation Secretary-General Petteri Taalas.