COP29 adopts establishment of global carbon market under Paris Pact’s Art 6

 

 

 IN A landmark decision on the first day of the global climate talks here, COP29 has officially adopted the new operational standards for a mechanism of the Paris Agreement under Article 6, setting the stage for a global carbon market. This adoption of article 6.4, achieved during the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA), sets the stage for operationalising Article 6, which has faced years of deadlock. Article 6 of the Paris Agreement facilitates international collaboration to lower carbon emissions. It offers two pathways for countries and companies to trade carbon offsets, supporting the achievement of emission reduction targets set in their climate action plans, or nationally determined contributions (NDCs). The first option, known as Article 6.2, allows two countries to establish a bilateral carbon trading agreement under their own terms. The second, Article 6.4, seeks to develop a centralised, UN-managed system to enable both countries and companies to offset and trade carbon emissions.

 

The Article 6.4 Supervisory Body, tasked with creating a United Nations-governed carbon market, finalised essential standards covering carbon removal projects and methodology guidance. These include guidelines on the development and assessment of methodologies and requirements for carbon removal activities. While previously delayed by conflicting views over transparency and quality, the early adoption of these standards is intended to streamline carbon market operations. Despite the historic agreement, concerns arose over the process. Some delegates questioned whether the Presidency’s swift push to adopt these standards at the start of COP29 undermined traditional governance procedures. Negotiations had previously faltered due to divergent views on how permanent and reliable carbon credits should be.

 

At COP28, disputes over forest credits and deforestation risks hindered progress, leading some stakeholders to worry that the expedited adoption at COP29 could set a precedent for sidestepping scrutiny. Environmental organisations expressed cautious optimism. John Verdieck, Global Climate Policy Lead at The Nature Conservancy, noted, “The Art 6.4 decision is a helpful start to COP29 Weneedeveryfinancialmechanism we can get to solve the climate crisis.” The Article 6.4 mechanism is seen as an importanttool in bridging the climate finance gap. The mechanism aims to enhanceclimatefinanceflows to countries with carbon-rich ecosystems, supporting both environmental integrity and equitable access to funding. Despite this achievement, significant elements under Article 6 remain unresolved, especially Article 6.2, which governs bilateral trades between countries. The EU and the US remain divided over transparency requirements, and these talks will continue throughout COP29. For Article 6.4, additional standards oninsurance policies, stress testing of the Reversal Risk Buffer Pool, and monitoring frameworks are stillneededtoensurerigorand investor confidence. As negotiations advance, stakeholders urge continued commitment to a transparent, equitable, and functional global carbon market, stressing that the urgency ofthe climate crisis demands both ambitious action and robust oversight.

 

 

 

UN SECRETARY-GENERAL Antonio Guterres on Tuesday urged world leaders to ensure that COP29 must tear down the walls of climate finance, warning that “developing countries must not leave Baku empty-handed”. Addressing the opening ceremony of the World Leaders Climate Action Summit at COP29 here, Guterres sought urgent measures to support developing nations, which are bearing the brunt of climate-fuelled catastrophes despite contributing relatively little to global emissions. “The rich cause the problem, the poor pay the highest price,” Guterres said, pointing out that developing nations face disproportionate impacts from climate change, such as food insecurity, infrastructure damage, and biodiversity loss.

 

“Developing countriesmust notleave Bakuempty-handed. A deal is a must and I’m confidentitwillbereached,”hesaid. With 2024 on track to be the hottest year on record, he described climate change as a “masterclass” in destruction, devastating communities and driving up global food and energy prices. In his address, Guterres outlined three priorities essential toachievingclimategoals,particularly stressing the role of developednations inensuring thatdevelopingcountrieshave the necessary resources to adapt and transition to cleaner energy. He called for developed countries to lead emissions reductionsbyprovidingemerging economies with technology and financial aid to enable climate action. Guterres highlighted the staggering financial gap in adaptation financing, which couldreach$359billionannually by 2030, and urged developed countries to fulfil promisestodoubleadaptationfunding by 2025.

 

INDIA’S FOCUS ON EQUITY, FINANCE, AND ADAPTATION: OUTLINING its core expectations from the COP29 inways thatrespecttheunique needs of developingcountries, India on Tuesday said it is expecting carbon market mechanism ‘without creating barriers to trade’ and a recalibration of climate finance under the new Goals. Indiaandmorethan190other countries have gathered at this Azerbaijan capital for the annual climate negotiations,COP29,underthe United Nations Framework ConventiononClimateChange (UNFCCC). Highlighting India’s approach, official sources emphasised the commitment to the principle of Common but Differentiated Responsibilities (CBDR), underscoring that developed nations, as historical emitters, should take the lead in mitigationeffortsandclimatefinance.

 

India’s priorities at COP29 includeadequatefinancialsupport for developing nations, especially for adaptation efforts, and ensuring a fair and equitable approach in all climate negotiations. NATIONALTARGETS SAME A YEAR AFTER HISTORIC DEAL ON TRIPLING RENEWABLES BY 2030: REPORT A YEAR after countries agreed totripleglobalrenewableenergy capacity to11,000gigawatts by 2030, a new report on Tuesday revealed that nationaltargetsstillonlyaimforacollective doubling of capacity in the next six years. The report by global energy think tankEmber showed only eight countries have updatedtheirrenewabletargets in the last 12 months, resulting in just a four-GW increase inoverallrenewableenergytargets globally. The report analysednational2030renewable capacity targets for 96 countries andtheEUas a bloc. These countries collectively account for 96 per cent of the world’s renewable capacity, 95 per cent of global electricity sectordemandand94per cent of global power sector emissions. Of the 96 countries, 83 haverenewablecapacitytargets for 2030.

 

At the UN’s climate conference in December 2023 inDubai,worldleadersreached a historic agreement to triple global renewables capacity by 2030.TheInternationalEnergy Agency(IEA)andInternational Renewable Energy Agency (IRENA)bothshow thata global tripling of renewables to at least 11,000 GW by 2030 is the optimal pathway to limit global average temperature rise to 1.5 degrees Celsius. “A year after the global goal to triple renewables was reached at COP28, the collectivesumofnationaltargetshas onlyincreasedby4GW.Thecurrent sum of 2030 national targets from96countriesandone region is 7,242 GW, up from 7,238 GW at the end of 2023,” Ember said.