COP25: Major developing countries still reluctant to amend Paris Agreement to ‘foot climate bill’

Developing countries, which had no carbon restrictions until then, are reluctant to strengthen the system's current requirements. EPA-EFE/JUANJO MARTIN / POOL POOL

Countries such as Brazil, China and Saudi Arabia, are criticising Article 6 of the Paris Climate Agreement and its carbon offsetting mechanism even though they are currently not footing the “climate bill”. Climate advocates fear this stance may weaken the entire treaty. EURACTIV France reports.

At this year’s COP25 in Madrid, the EU continues to obsess over the issue of carbon markets in the Paris Climate Agreement because countries such as Brazil, China and Saudi Arabia want to relax the limitations concerning the emissions trading system enshrined in Article 6 of the Agreement.

COP25: Countries pressed to deliver

The COP is meant to pave the way for countries to raise their climate ambition before the end of crucial year 2020. Climate negotiators know that they are under tight scrutiny from stakeholders, first and foremost cities, businesses, and Fridays for Future.

The text provides countries with a system that enables them to comply with their emission reduction obligations through carbon credits, just as the Kyoto Protocol did.

But developing countries, which had no carbon restrictions until then, are reluctant to strengthen the system’s current requirements. They are calling for the extension of projects under the Kyoto Protocol, as well as for greater flexibility in the use of credits.

For instance, Brazil wants to sell its carbon credits and, at the same time, account them as its emissions reductions. To avoid this kind of environmentally-unfriendly practice, other states are intending to put in place a robust accounting system, as well as a global register.

“I love Brazil very much, and we have so much in common in terms of protecting our common goods. I think we can have an interesting dialogue. But as far as the Paris Agreement is concerned, we must move forward, not backward,” said Commission Vice-President Frans Timmermans.

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The fate of the climate negotiations at the COP25 climate summit in Madrid depends heavily on Europe. And civil society, the financial and private sector are asking for more. EURACTIV France reports.

The same is true for France’s Ecological and Inclusive Transition Minister Elisabeth Borne, who is visiting Madrid. “Some countries, which have become accustomed to taking advantage of the Clean Development Mechanism, need to change! We will certainly not sign this Article 6 at any price,” she said.

Above all, the EU is committed to keeping intact the spirit of the Paris Agreement, whose Article 2 states that the objective is to achieve net-zero emissions on a global scale.

Such a target ultimately condemns carbon credits, since avoiding carbon emissions must become the norm, as opposed to a luxury for rich countries that would pay to reduce CO2 emissions elsewhere across the globe.

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“The EU has provided the main outlet for the previous system, the Clean Development Mechanism (CDM), which has been abundant in terms of supply but has never really taken off due to a lack of regulatory constraints,” said Emile Alberola, director of research at Ecoact.

But for countries used to receiving money through these carbon credits as part of the Clean Development Mechanism, the pill is hard to swallow and putting an end to this ‘free cash’ already by 2020 is considered too early.

However, the environmental integrity of some projects that took off under the mechanism remains questionable.

China, for instance, has accumulated millions of dollars by selling credits from fluorinated gases used in the chemical industry. Although this has increased production, the climate has suffered, given that emissions contain very potent greenhouse gases.

In the new system devised by the Paris Agreement, this kind of arrangement will no longer be possible: in theory, only projects that demonstrate net emission reductions, rather than avoided emissions, should be accepted.

Still, as Article 6 of the Paris Agreement is “the most sensitive and technical” provision according to Emilie Alberola, it continues to be the one article that has not yet been finalised, even though investors are impatiently waiting for the new rules to be adopted.

As Chile, which was supposed to host the COP25, is now co-organising the climate summit, it seems likely that Brazil will manage to impose at least some of its views, given that Chile has no interest in getting in the way of its powerful neighbour.

“What we are looking for are open formulations that allow technical interpretations to be left for later,” said a source close to the negotiations.

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[Edited by Zoran Radosavljevic]

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