Bloomberg reports that according to Alok Sharma, the President of COP, the Glasgow climate talks will get tougher. The reason cited is that the negotiators are in the process of nailing down a deal that has been underway for the last six years and being chased.
Getting a deal on international carbon market trading is the main benchmark of success at the summit COP26 being held. It would also be a major success for an issue that has been due ever since Paris Agreement was signed in the year 2015.
It is all about Article Six and two types of carbon trading. The first one is carbon credits exchanges from one country to another in which one country will pay to another so that emissions are cut on its behalf. The second one is an offset traded by the private and public players.
According to Bloomberg News, an agreement that is designed well would not only help in cutting the emissions but also rake up to $1 trillion of investment in the poorer countries and foster low carbon innovations.
But if the rules are too casual and lax, it would allow countries to emit more than they should. However, there is a tendency for the rules to be nailed down and it is not just because the planet is getting warmer faster. There is a lot of demand for the offsets and more change in hands as far as credits are concerned, the first in eight months of the current year as compared to 2020, as per BloombergNEF, as the governments and the corporations incur billions of dollars so that the net-zero targets can be met.
However, there are no unified international oversights or standards, that allow for ample room for abuse. The low-quality offsets contribute very little or not at all towards the slow climate change. The Glasgow meet objective is to instill rigor and transparency to the market that is in a state of a mess across the globe.
The companies have kept a careful watch and are lobbying as well. They seek clarity on the norms as the strategies to attain net-zero objectives are implemented, reports Bloomberg News.
The chances of a deal have been underway in recent weeks. Brazil sent signals that it would not compromise in the round of negotiations but would be flexible. It was a reminder in the first week of the conference that a landing zone would not be easy. Countries are holding on to the issue that how much money must be used from revenue generated from trading so that the poorer countries could be helped to facilitate them to adapt to climate change.
Another point of contention is the way the accounting rules must work so that the emission reductions are not counted twice. The deal that is badly drawn could allow credits to be booked in the country that is selling and also in the country that is buying.
There is another point of contention and that is whether the credits from a carbon regime that is now defunct must continue to be valid or whether it must be phased out. The market will be more effective if fewer credits are existing in the system.
The three points of contention pit the richer countries against those of the developing ones. Brazil wishes to be able to make use of the older credits. The African group of nations is seeking a share bigger from the revenues so that the same can be channeled towards those countries that require funds.
The European Union, which is a key player has been asking for robust accounting rules repeatedly and has been opposing the African bloc’s revenue proposals. Meanwhile, Sharma is “cranking up the pressure” so that the deal can get through, reports Bloomberg News.
