Sixteen days of negotiations were not enough to find common ground on international carbon trading rules, one of the main issues of contention at the COP25 climate summit in Madrid. EURACTIV France reports.
A minimum agreement was finally reached after over two weeks of talks, as parties to the Paris Climate Agreement got together in Madrid to negotiate the final details of the treaty.
Their main task was to finalise Article 6 of the treaty dealing with international carbon trading. However, a final deal was postponed until 2020, amid squabbles over the details of CO2 accounting rules, which revealed a rift between countries supporting greater ambition and those happy with the status quo.
The rest of the text reflects a weak call on parties to be more ambitious in their 2020 climate commitments, which under the Paris deal must be submitted before next year’s COP26.
Even COP President Carolina Schmidt from Chile acknowledged that the conference had “remained indebted to the planet,” while UN secretary general António Guterres did not hide his disappointment.
I am disappointed with the results of #COP25.
The international community lost an important opportunity to show increased ambition on mitigation, adaptation & finance to tackle the climate crisis.
But we must not give up, and I will not give up.
— António Guterres (@antonioguterres) December 15, 2019
The European Commission and German Environment Minister Svenja Schulze also expressed frustration that the summit had not succeeded in taking climate action forward.
“It is disappointing that after years of hard work and especially during the last two weeks that we could not agree on Article 6,” the EU delegation said in a statement. “We think, however, that we came much closer to agreement than previously, and this is something that we can build on in our future deliberation,” it added.
“But, is not the end of the story. Now we need to look forward. Our task is more urgent than ever,” the EU delegation added, saying 2020 “must be the year of increasing ambition”.
A failure of political will
Jennifer Tollman, diplomatic advisor to the E3G think-tank, said: “the COP25 is first and foremost a failure of political will, on the part of countries that considered it a minor step before the Glasgow meeting in 2020, and a COP presidency that failed to win against the blocking countries, which include the US, Brazil, Australia and Saudi Arabia”.
The lack of diplomatic commitment from usually ambitious countries such as France, is partly to blame for this failure. Members of the French government only made brief passages at the summit, leaving the German Environment Minister and the new Vice-President of the European Commission, Frans Timmermans, alone when facing the American, Chinese, Indian and Brazilian heavyweights.
In 2015, the agreement was also made possible by an alliance between the Obama administration and China. The deterioration in relations between the two blocs now requires the EU to be more proactive in its diplomatic role, to convince the Middle Kingdom.
“The geopolitical context was not easy: the COP is almost the last forum for multilateral discussion,” said David Levai, a researcher at the Institute for Sustainable Development and International Relations (IDDRI).
Nevertheless, the EU defended its idea of ambition, particularly by refusing far-reaching concessions on Article 6 that would have diluted its own carbon market, the Emissions Trading Scheme (ETS).
“There are some bridges that we just cannot cross if we are to maintain a credible position with our partners and with our citizens at home,” the EU delegation said.
“Mother Nature has a message for us: she can’t take it anymore. The time for complacency is over,” warned Frans Timmermans, who, for his first COP, appeared to work tirelessly. The Vice-President insisted that there was “no reason to question the environmental integrity of the Paris Agreement”.
Carbon markets weakened
Countries like Australia wanted to retain the so-called CDM carbon credit system set up by the Kyoto Protocol even though it would jeopardise Europe’s own carbon trading scheme.
The Clean Development Mechanism (CDM) allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of CO2. But controls over the actual emissions reduction is problematic and the EU opted out of the system years ago in order to preserve the integrity of its own carbon market.
The US, which had sent only one official to Madrid, had also frustrated the process, even though it intends to leave the Paris agreement in less than a year.
And Brazil appeared to want to slow things down, insisting on double-counting: a process that would allow it to both continue to use Kyoto credits to meet its emission reduction obligations while selling them to third parties.
In doing so, Brazil defended the interests of its agri-food sector, which intends to continue mass-producing soya and livestock, without being constrained by the Paris Agreement.
“If some countries rely only on carbon markets to reduce emissions, then they do not subscribe to the Paris agreement. And they want to cheat,” said Laurence Tubiana, who orchestrated the signing of the 2015 agreement.
A 4.65 billion-ton carbon time-bomb
In total, 4.65 billion tons of CO2 credits – new or existing – were potentially covered by Article 6 under the proposed new relaxed wording of Article 6 rules, according to Carbon Market Watch, an international NGO.
According to think tank Climate Analytics, their use would lead to an additional 0.1% warming.
“It could be the carbon bomb of the Paris agreement,” said Sam Van den Plas of Carbon Market Watch.
Under the proposed rules, the vast majority of those carbon credits would have gone to Asia, a small part to South America and some to Africa. China intends to use the credits for its domestic market to relieve pressure on companies, which explains why it did not intervene in the negotiations in Madrid, said a banker specialised in carbon credits.
But in essence, blocking ambition is not logical from an economic point of view. Kyoto credits currently have a ridiculous market value of around 20 cents due to the lack of demand.
And if they continue to be transferable after 2020, “the challenge will be the market interest for these credits: it could be very modest,” said Dirk Forrister, President of IETA, the International Emissions Trading Association. Forrister referred to “junk credits”, while the Paris agreement clearly calls for new projects that are indisputable from an environmental point of view.
The frustration regarding COP25’s outcome is even greater for civil society groups, which mobilised 500,000 people in the streets of Madrid in early December. “States do not listen to science,” simply said teenage climate activist Greta Thunberg.
The disappointment is also huge for the WeMeanBusiness coalition, which brings together companies supportive of bold action on climate change, also condemned the “weak” outcome of COP25.
But the small island states are probably the most concerned about the weak outcome at COP25. “The new text does not reflect what we would have liked,” said Tina Stege, a representative for the Marshall Islands, which are under threat from disappearing under rising seas.
The only glimmer of hope in Madrid came from the announcement of the European Green Deal and the EU’s political agreement to reach carbon neutrality by 2050.
“For companies, this sends a signal that the transition to a carbon-neutral economy can start to accelerate,” said the Corporate Leaders Group, a coalition of European businesses supporting the transition to a net-zero carbon economy.
[Edited by Frédéric Simon]