COP26:  Getting Real about Ambition

Pope Francis:  Political leaders at COP26 must give future generations "concrete hope" by taking radical steps to decarbonize their economies.  John Kerry:  Glasgow is the "last best hope for the world to get its act together".  Boris Johnson:  COP26 as “the turning point for humanity”.

With the stakes this high, countries should be pushing for the greatest possible effort to reduce the emissions that cause climate change.  And yet, a key negotiating area at COP26 has the potential to reduce, rather than increase, overall ambition in the Paris Agreement.

Article 6 of the Paris Agreement focuses on international cooperation to enhance ambition in ‘nationally determined contributions’ [NDCs], the plans that countries submit to show how they are taking climate action.

But rich countries want to reframe Article 6 as a discussion about carbon markets and offsets.  Other Parties to the Agreement want to carry pre-2020 carbon credits over into new offset mechanisms that would allow them to take credit for past action and count it toward their NDCs.  Both of these pressures would serve to reduce Overall Mitigation of Global Emissions [OMGE].  OMGE is specifically mentioned in Article 6, and is the key measure of overall climate mitigation ambition.

Let’s dig into this a little bit.  An agreement on Article 6 that allowed countries – or companies – to ‘offset’ their continued emissions with climate action elsewhere reduces Overall Mitigation of Global Emissions.  It’s a straightforward but negative linear relationship: the volume of credits transferred represents a subtraction from highest-possible OMGE.  Allowing for continued carbon pollution lessens OMGE.  CLARA argues that only non-market, non-transactional, no-transfer-of-credit approaches keeps OMGE at a high level.  (100% retirement of credits – that is, no use of offsets – would work too; but ‘partial retirement’ of credits reduces OMGE.)

Although this challenge is generally well-understood, it is in fact the wealthy countries – the same ones whose representatives talk about a ‘turning point for humanity’ and COP26 as ‘last best hope’ – that are embracing the interpretation of Article 6 as a carbon market starter.  They’ve been adamantly opposed to mandatory retirement of credits.  They haven’t been willing to increase grant-based climate finance or indeed any schemes that don’t lead to credits and offsets for the financiers. 

It remains difficult to estimate to what extent a weak agreement on Article 6 might drag down OMGE, simply because actual ‘landing zones’ for these negotiations have yet to appear.  Nonetheless the host country for COP26 is determined to find those landing zones.  Watch this space.

Less well understood is the concept of ‘credit carryovers’.  One of the pre-Paris (Kyoto Protocol) Agreement mechanisms for international cooperation on mitigation was the Clean Development Mechanism, which prior to 2020 issued Certified Emissions Reduction units (CERs).  Parties such as Brazil and India have argued that those CERs should be rolled over into post-2020 accounting.  Possible time or volume limits on the use of Certified Emission Reductions have been floated in the negotiations – but again, any rollover of pre-2020 credits would weaken OMGE. 

How much might CER unit rollover weaken ambition, measured as OMGE?  Recent research suggests that the potential supply of pre-2020 CERs are in the billions of tonnes – between three and four billion, depending on factors such as what start-date is used to count those CERs.

By way of comparison, a just-released UNEP report found that the ‘emissions gap’ to 2030 for a 1.50C aligned pathway based on updated NDCs stands at between 22 to 33 billion tonnes of CO2eq.

So, CER supply of between three and four billion tonnes would increase the 2030 emissions gap significantly.  At the lower end, the figure is 25 billion tonnes of CO2eq. At the higher end, it increases the emissions gap to 37 billion tonnes of CO2eq.  

That means 10-18% of the total remaining carbon budget aligned with 1.5°C could be lost from OMGE, just in this one provision of Article 6, if carry-over credits were allowed.

Another way to state it:  allowing this level of pre-2020 credits into post-2020 accounting systems would completely wipe out all of the emission reductions proposed in recent, upgraded NDCs. 

CLARA follows the science in calling for maximum OMGE, and the raising of ambition.  International carbon offset markets lower ambition.  So would the carry-forward of pre-2020 CERs.  Both go against the Paris Agreement benchmark of 1.5°C. 

A bad deal on Article 6 that allowed for offsets, and carry-forward of credits, undermines our collective ability to implement the Paris Agreement toward that 1.5°C goal. 

If COP26 is really our ‘last best hope’, then let’s get our act together by making OMGE in Article 6 as strong as possible.  No offsets, no carry-forward of credits.