It could make or break the success of the Paris Agreement. It’s a notably complicated section of an international accord that is already arcane and nuanced by real-world standards. And as negotiations passed their midpoint Friday, many participants at this year’s UN climate conference, COP 25, said they would rather postpone final drafting of Article 6 than settle for a bad decision.
The negotiating stakes in Madrid are that much higher because, once the nine paragraphs of text are finalized, the international carbon trading regime they set in motion could be on the books for decades.
If Article 6 works, it will bring a large influx of badly-needed private financing to the climate fight, helping vulnerable developing countries secure the funds they need to adapt to climate impacts, reduce their greenhouse gas emissions, and build capacity to take control of their own climate solutions.
If it fails, as one Canadian negotiator put it over the weekend, it will give colossal fossils a licence to “spread carbon around, rather than actually reducing it,” by buying international credits for the emissions they produce while continuing to expand their oil and gas production.
And on Saturday, new negotiating text introduced for Article 6 eroded safeguards intended to protect Indigenous and other communities from human rights abuses related to projects funded under the Paris Agreement’s Sustainable Development Mechanism (SDM), Climate Home News reports.
Those groups have had ample history of problems with hydropower, sustainable forestry, and agriculture projects funded under the Clean Development Mechanism (CDM), the carbon credit regime under the previous Kyoto Protocol. “The CDM had no language on safeguarding local communities and no complaint mechanism,” Climate Home writes, in a post that includes examples of questionable, even “shady” projects the CDM enabled. “It has been criticized for approving offset projects which failed to consult local communities and caused them harm.”
Now, the new draft of Article 6 has “removed the requirement for parties to ‘respect, promote and consider their respective obligations on human rights’, replacing this language with a much weaker placeholder text. They also failed to include further processes that are considered norms in international development finance,” Climate Home writes.
“This further dilutes the potential rules and could jeopardize the integrity of the Paris Agreement,” said Erika Lennon, senior attorney at the U.S. Center for International Environmental Law (CIEL), who Climate Home says has closely followed the safeguards issue for years.
New Attention to a Resurgent Climate Movement
It isn’t as though Article 6 has been the only show in town over the last week. On Friday evening, more than 500,000 boisterous protesters took over the streets of downtown Madrid, leaving the IFEMA conference facility nearly deserted, according to participants onsite. Thousands rallied simultaneously in Santiago, Chile, which had been scheduled to host the COP until the national government withdrew as conference host in late October.
“The massive march, hailed as one of the largest-ever public mobilizations in Spain, was one of hundreds of climate strikes around the world this and last Friday to demand increased ambition to address the climate crisis,” writes ECO, Climate Action Network-International’s daily COP newsletter.
“ECO senses something very different in the air at COP during this year of striking for the climate,” the publication adds. “No longer is the ‘climate movement’ something to be merely nodded to in plenary speeches—it has taken over the conversation, and its fingerprints are everywhere at IFEMA. Governments are gathered in Madrid just two months after more than 8.7 million people took to the streets for this September’s global climate strikes, marking one of the largest mobilizations in world history,” and “the energy and urgency that youth climate strikers have injected into the climate fight worldwide has arrived in full force at the COP.”
The insistent urgency in the streets is being mirrored in some of the energy solutions put forward during the conference. The Global Energy Efficiency Alliance urged COP negotiators to embrace a 3% annual efficiency increase, sufficient to “deliver nearly half of the emissions cuts needed to meet the Paris Agreement goals—more quickly and at less cost than alternative approaches.” A group of 285 large companies with combined emissions above 752 megatonnes per year—more than the combined annual emissions of France and Spain—committed to science-based emissions reduction targets consistent with a 1.5°C climate stabilization goal. They said the initiative would reduce their emissions by 265 Mt per year, drive US$18 billion in climate change mitigation investments, and increase annual renewable electricity production by up to 90 terawatt-hours (TWh).
“Science-based targets provide companies with a clearly-defined pathway to future-proof growth by specifying how much and how quickly they need to reduce their greenhouse gas emissions,” the companies said.
Complexities in Article 6
But alongside all of that activity and hundreds of other side events through the first week of COP 25, Article 6 prevailed as one of the central issues preoccupying negotiators. “Our biggest challenge is how to solve this the right way,” said veteran climate negotiator Teresa Ribera, now serving as Spain’s minister for ecological transition. “It is not viable to think that it’s so important to get this done that we can sacrifice everything else.”
That thinking, backgrounded by Carbon Brief’s exhaustive explainer on Article 6, points to the high stakes involved—and the complexities to be unravelled in bringing the negotiations through to a win.
“Article 6 holds the potential to make or break the Paris Agreement,” writes University of British Columbia political scientist Kathryn Harrison. “At best, by providing a mechanism to meet targets at a much lower cost, Article 6 could inspire countries to increase the ambition of their national targets. At worst, weak rules for Article 6 will encourage violation of human rights and authorize illegitimate reductions that merely give the illusion of progress.”
At a time when no one thinks countries’ climate action under the Paris Agreement is moving far enough or fast enough, “carbon markets, in which countries can buy carbon ‘credits’ to offset some of their own emissions, are one way to make more ambitious climate pledges possible,” Quartz adds.
“In theory, carbon offsets are a win-win: countries can swap emissions and pay to meet their climate goals, and funding can flow to halt deforestation where it’s most needed. Everyone from industrialized nations to airlines sees it as a golden opportunity,” ensuring that “billions of dollars flow towards carbon offset schemes,” the publication adds.
“In practice, however, offsets are controversial. Recent examples suggest numerous pitfalls. It’s hard to ensure the permanence of trees, for example. What happens when a president like Brazil’s Jair Bolsonaro comes in, with policies that wipe out vast swaths of rainforest in a single season? Any carbon credits purchased there would go up in smoke.”
In the Vancouver Sun, UBC’s Harrison lays out the specific issues the Article 6 negotiations must navigate, beginning with concerns for “additionality”—the assurance that carbon reductions receiving credits are truly additional to what would already have happened without the credit. Other points include double-counting of emission reductions, the potentially devastating human rights and cultural impacts of attaching the dollar value of a carbon credit to traditional Indigenous lands, and the need to ensure that carbon trading leads to real emission reductions.
In Madrid, some participants also focused on the dramatic gap between the carbon storage potential of intact forest landscapes and the far smaller benefit of the monoculture plantations that usually replace them after they’ve been clearcut.
All of those concerns make Article 6 negotiations “a step in the wrong direction for experts who say countries should focus on weaning themselves off fossil fuels—not buying credits to meet emissions goals elsewhere,” Quartz says.
Fossils Leap Onboard
The Thomson Reuters Foundation paints a picture of colossal fossils like Shell, BP, Chevron, and Woodside Energy, tech giants Microsoft and Apple, mining giant BHP, and the U.S. Arbor Day Foundation teaming up with the International Emissions Trading Association—an organization co-founded by Shell—“to build a global market for carbon credits generated from projects to conserve forests, soil, and wetlands.”
At the launch of a new IETA initiative on markets for natural climate solutions last Thursday, the association’s director of carbon market development, Simon Henry, pointed to a “massive discrepancy between what we are spending on this solution and what is on offer.
“When it comes to taking action in the climate space, the world has been very long on say and very short on do,” said Duncan van Bergen, vice president for nature-based solutions with Shell New Energies. “We believe that nature has a role to play—not instead of, but in addition to, a lot of hard work that needs to happen to decarbonize energy, transportation, agriculture, and other sectors of the economy.”
Unfortunately, “very long on say and very short on do” would also be an apt description of the dollars Shell currently devotes to “new energies” compared to its continuing, lavish investment in fossil fuel development, its CEO’s insistence that it has “no choice” but to keep investing in new fossil projects, or the $1 billion Shell and other colossal fossils have spent since 2015 to lobby against climate action. ECO says protesters signaled as much when van Bergen began his presentation.
“In a powerful sign of protest, activists (who took up most of the room) stood up when Shell’s panelist started to speak, covered their ears, and walked out.”
On the same day, Thomson Reuters says, a group of 160 environmental and Indigenous rights groups, including the Indigenous Environmental Network and Friends of the Earth International, issued an open letter calling for carbon markets to be left outside the voluminous “rulebook” for implementing the Paris deal. They said offering carbon credits under Article 6 “can allow big polluters to buy those, instead of substantially cutting their own emissions by using less fossil fuel and other measures,” Reuters writes.
“This is completely problematic,” said Dipti Bhatnagar, a Friends of the Earth climate justice campaigner from Mozambique, who said Shell and Italian fossil Eni S.p.A. have been looking for tree-planting offsets for a large natural gas project they’re launching in her country. “We are saying this is not the way to do things.”
“Big polluters must be rubbing their hands in glee that carbon market mechanisms, which further dilute the already weak and inadequate Paris emissions targets, are back on the agenda,” Bhatnagar added on the Friends of the Earth site. “We will fight them tooth and nail. The climate crisis is already devastating lives. Emissions are still rising. Now is not the time to offer an escape route to polluting Northern country governments and Big Oil.”
“This nature-based solutions is becoming a smokescreen for just continuing business as usual,” said tropical forests specialist Simon Lewis of University College London, who stressed that even successful carbon offsets for natural climate solutions can’t substitute for a fossil fuel phaseout.
Carry-Over Carbon Credits
One tough issue in Article 6 negotiations is whether to carry over carbon credits accumulated under the Kyoto Protocol—many of them held by China, India, and Brazil—and include them in the new trading regime under the Paris deal. Carbon Market Watch warns that dumping four billion unused credits into the system would undermine national commitments that already fall far short of the Paris targets, potentially driving down the cost of a single credit to €0.20 per tonne.
“The EU and others such as island and vulnerable countries want to prevent this, but countries like Brazil, which hold vast amounts of the credits, are digging in their heels,” the organization writes. “They want to be able to keep selling these credits—regardless of the risks that this poses on the environmental integrity of future markets.”
The latest word Saturday—though not nearly the final word, with politicians arriving in Madrid to kick off five days of high-level negotiations Monday—was that the COP would postpone a final decision on Article 6, but set up a “work program” to dig into the details and report back to a future conference.
It isn’t a pace or an outcome that will likely sit well with the protester who travelled by racing catamaran, train, and electric car to get back to Europe from North America in time for Friday night’s march. But increasingly, the message from Madrid seems to be that the issues around carbon trading are too complex, and the divergent interests in the discussion too entrenched, to make 12 days in December enough time for 195 countries to reach a consensus that moves Article 6 implementation in the right direction.