Carbon Markets: the Most Controversial Point on the COP26’s Agenda

Carbon Markets: the Most Controversial Point on the COP26’s Agenda
Photo: UNclimatechange via flickr

Sina Heckenberger

Environment and Human Rights Researcher

Global Human Rights Defence

At the 26th UNFCCC Conference of the Parties (COP26), starting on the 31st of October in Glasgow, a key focus of negotiations is to finalise the Paris rulebook, i.e. the rules and procedures for implementing the Paris Agreement. Article 6 of the Paris agreement, which sets out the implementation of carbon markets, is a particularly contentious issue. The point was already high on the agenda of COP25 but states failed to agree on terms then. Therefore, this year’s COP aims to pick up the loose ends of the 2019 negotiations.

Carbon markets govern the trading of emissions between countries. They are  “systems in which countries could offset emissions by trading carbon credits with other countries” (Stanley, 2019). For instance, to offset their own emissions, a high emitting country could buy credits from another country that earned credits by making significant emission cuts (Stanley, 2019). Proponents argue that it supplements mitigation efforts and investment in decarbonization projects such as sustainable energy or reforestation (Noor, 2019). Carbon trading can provide climate finance to developing countries and help other countries in cutting their emissions.

On the other hand, carbon markets could seriously undermine Paris’ goal of limiting global warming to 1.5 degrees Celsius. It is criticized as “a mechanism by which rich countries could hive off some of their carbon reduction to developing countries” (Harvey, 2021). The mechanism creates no incentives for large polluters to reduce their emissions, instead offering them a way to legitimize pollution and continue using fossil fuels. Prior initiatives for carbon markets, such as the UN Clean Development Mechanism under the Kyoto Protocol, have failed to achieve emission reductions (Noor, 2019). 

Moreover, many critics are concerned about the lack of discussions about human rights protections in international talks around carbon markets. According to Noor (2019) “In the latest drafts of Article 6, there is no explicit language on human rights and indigenous rights.” Many carbon offsetting projects, like big infrastructure programmes, are the cause of human rights violations including land grabs, forced displacement, reduced access to water and food as well as gross violations of indigenous rights (Noor, 2019). 

Getting the rules over the implementation of article 6 straight is integral for mitigating climate change. Depending on how carbon markets are structured, they could either significantly contribute to emission cuts or let culprit countries off the hook (World Resources Institute).

References:

Harvey, F. (2021, October 11). What is COP26 and why does it matter? The complete guide. The Guardian. https://www.theguardian.com/environment/2021/oct/11/what-is-cop26-and-why-does-it-matter-the-complete-guide

Noor, D. (2019, December 9). A Fight Over a False Solution is at the Center of Madrid Climate Talks. Gizmondo. https://gizmodo.com/a-fight-over-a-false-solution-is-at-the-center-of-madri-1840311268

Stanley, A. (2019, December 15). UN Climate Summit Ends With a Whimper. Gizmondo https://gizmodo.com/un-climate-summit-ends-with-a-whimper-1840447614

Kizzier, K., Levin, K. & Rambharos, M. (2019, December 2). What You Need to Know About Article 6 of the Paris Agreement. World Resources Institute

https://www.wri.org/insights/what-you-need-know-about-article-6-paris-agreement

Further Resources:

The “People’s Demand for Climate Justice” calls on governments to reject false solutions like carbon markets. https://www.peoplesdemands.org/#read-the-demands-section

UN Climate Change Conference UK2021 

https://ukcop26.org/cop26-goals/collaboration/