Carbon market analysts are once again declaring a half-victory after negotiations over Article 6 of the Paris Agreement, the provisions that deal with international carbon markets and carbon trading, remained unfinished at the end of the COP28 climate summit in Dubai.
“Torn between countries demanding that Article 6 carbon markets be available with virtually no restrictions and countries insisting on upholding transparency, human rights, and climate ambition, negotiators at COP28 failed to break the deadlock,” writes Carbon Market Watch in an after-action analysis. “With all the unresolved problematic issues, the fact that they reached no deal was better than agreeing to a bad one that would torpedo the Paris Agreement.”
The inconclusive result came two years after negotiators reached a “landmark agreement” on “the broad brushstroke principles that would govern two types of carbon markets: Article 6.2, which involves bilateral or multilateral emissions trading agreements between countries, and Article 6.4, which envisions the creation of a global carbon market overseen by a United Nations entity known simply as the Supervisory Body,” the analysis explains.
But that still left delegates to resolve a “battle for the soul of carbon markets,” with countries unable to agree on the fundamental principles that will guide them.
“The absence of a deal on Article 6 avoids replicating the errors of the voluntary carbon market and sending the wrong signal to companies and countries seeking to sidestep their climate responsibilities.” said Carbon Market Watch’s Policy Lead on global carbon markets, Gilles Dufrasne.
“Trading carbon credits requires strong environmental and human rights guardrails, as has been shown by the numerous scandals related to the voluntary carbon market that broke out over the past 12 months,” he added. “The text on the table just didn’t provide this. It would have risked reproducing the mistakes of voluntary carbon markets, and by rejecting it, negotiators made the best out of a bad situation.”
Read the rest of the Carbon Market Watch analysis here.
