New carbon market tools key at COP25

NEWDELHI: 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 which opened in Madrid on Monday.

For India, Article 6 of the 2015 Paris Agreement that allows for a legal framework for marketbased 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.

“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...,” said Aarti Khosla, director at Climate Trends.