New Zealand is drumming up support for a declaration on international carbon trading at the Paris climate talks, a move it hopes will bolster certainty that emissions markets have a future regardless of the outcome in the French capital.
New Zealand is the only developed country that has made its INDC emissions target entirely conditional on access to the international carbon market and accounting rules.
In Paris, it has approached most of the nearly 100 countries that have made mentions of markets in their post-2020 plans, developed and developing nations alike, hoping to win support for its plan.
The declaration has not been released yet and the exact wording will depend on the outcome of the talks, but the proverbial cat was inadvertently let out of the bag on Wednesday – much to the dismay of the NZ delegation – when Australian Foreign Minister Julie Bishop said in a speech that “Australia supports the New Zealand Paris declaration on carbon markets”.
After the speech, Jo Tyndall, New Zealand’s chief negotiator, told Carbon Pulse in an email.
“It’s no secret that carbon markets are a priority issue for New Zealand. We’ve also made it clear we want to send some signals to and about the UN market as part of our engagement at the COP,” she said.
“There’s a tendency to jargon and code in this process, so we want to send a clear signal that (a) carbon markets will have a strong role in the post-2020 period, and (b) that we’ll work to develop standards and guidelines for the environmental integrity of market mechanisms and to avoid any double-counting or double-claiming of units.”
The concept of carbon markets is controversial in some quarters at the talks, which is why recent rounds of negotiations have referred to “international transfer of mitigation outcomes” rather than mentioning markets outright.
IN OR OUT?
The latest draft text for an overarching Paris agreement published by the French presidency on Wednesday included a proposal for a market-based mechanism, though COP President Laurent Fabius said in his speech that the issue was among those where only “initial progress” had been accomplished in getting the necessary consensus among all 196 UNFCCC parties.
Venezuela’s Claudia Salerno told the conference on Wednesday evening that the ALBA alliance of Latin American nations opposed carbon markets and rich countries buying the right to pollute.
She said the language on “cooperative approaches” in the current draft text should be removed due to its reference to carbon pricing, adding that “there must be a powerful lobby behind it”.
Market proponents said last week they were concerned that a potential stalemate in Paris might end with markets being dropped from the text, because major parties such as China, the EU and the US – while supporting markets – don’t in their INDCs have immediate plans to outsource emission reductions, and therefore having market-based mechanisms explicitly supported in the agreement may not be a top priority for them.
NEW BODY?
The New Zealand declaration will seek to ensure that markets continue to play a role in international climate change action, though the country has withheld the statement so far partly over concerns that pursuing a market-based approach regardless of what is agreed in Paris may be seen as arrogant. And that may have caused reluctance among other countries to support the declaration.
Negotiators and experts from a number of countries have made it clear on the sidelines of the talks that nations have the right to – and most probably will – trade emissions internationally, even if a system for it is not anchored in the Paris pact.
Should that situation occur, backers of an international market would likely need to establish a new oversight body to monitor the transfer of units across borders, implement MRV regulations, and so on, taking that responsibility out of the UN’s hands.
However, while business group IETA believes international carbon trade drives down the cost of emission reductions and enables nations to set deeper reduction goals, many environmental campaigners are sceptical and want countries to focus on the direct financing of low-carbon development in poorer nations.
“There is no future for carbon offsetting in the post-2020 world: there is just no space in the remaining global carbon budget to not be acting to reduce emissions,” said Femke de Jong, Carbon Market Watch’s EU Policy Advisor.
By Stian Reklev and Ben Garside – stian@carbon-pulse.com
Not yet signed up to CP Daily? Subscribe to our free newsletter here
