COP23: Long pathways and lengthy documents

Under grey autumnal skies, COP23 is now into its second week.  This year the event has been presided over by the Government of Fiji, but held on the sprawling UN Campus in Bonn, Germany. The setup has largely split the Party negotiators from the bulk of civil society and the business community, with two sites separated by over two kilometers of winding path across park-lands. While many have badges that allow them to enter both the Bula Zone (negotiations) and Bonn Zone (displays, side events), the distance, slow buses, cold temperatures and copious amounts of rain has rather limited the interchange. This is a loss for both sides.

Nevertheless, in contrast to COP22 and the most recent inter-sessional meeting, the negotiations themselves have been more open to observers. This has allowed those that can tolerate the pace of the process to witness the gradual expansion of the very exact text of the Paris Agreement into multiple pages of headings, ideas and text elements as the Parties sought a ‘rule book’ to guide full implementation. This is particularly the case for Article 6 on cooperative approaches (interpreted by most as carbon trading), which does need further detail to function and deliver on its potential benefit.

Prior to COP23, the International Emissions Trading Association (IETA) released a further iteration of its own straw-proposal for Article 6, a somewhat simplified version of the same document released earlier in the year. Instead of trying to reconcile all accounting aspects of the Paris Agreement within Article 6, we (the IETA International Working Group, which I co-chair with Jonathan Grant of PwC) recognized that much of what we had been considering more correctly sat within Article 13, the transparency framework. This makes Article 6 somewhat simpler, although that didn’t stop the negotiators from turning a page of Paris Agreement text into over 40 pages of suggested proposals.

While the 40+ pages that the negotiators produced is a record of all the proposals made over several sessions, rather than the result of a negotiation to reach a conclusion, it nevertheless throws up some very diverse views as to the operation of national emission accounts, carbon unit trading and the impact that trading has on ambition. The latter point may become an issue, as the current text proposals appear to reflect the view (by some, not all) that each trade (ITMO) or use of a mechanism must demonstrate that it has led to enhanced ambition, rather than the more accepted view that trade at the macro level leads to lower costs, greater efficiency and therefore (in the case of carbon markets) to enhanced ambition. This is simple to demonstrate as a concept but probably impossible to establish for a single transfer or mitigation activity. Take for example the desire to establish net zero emissions at the economy level. Without trade, a country may be reluctant to do this as there may be insufficient domestic emission sinks to balance remaining emissions. But with access to a broadly based international carbon market, said country may be very willing to set a goal for net zero emissions, knowing that the global market for sequestration units is considerable. It is therefore prepared to invest in that market by purchasing units, potentially increasing the rate at which the global economy can also reach net zero emissions. But this concept is not necessarily demonstrated in every given trade. Further, the trades become integral to the realization of the net zero emissions NDC.

The Article 6.4 process also threw up similar stark divisions, with views on the mitigation mechanism under 6.4 looking troublesome to resolve. While many Parties were proposing ideas that aligned very closely with the business community views in the IETA straw-proposal, some countries saw the mechanism as something that operated above the ambition of the nationally determined contributions (NDC) of the host and recipient Parties involved. This is illustrated by the statement within the draft elements document that says;

An overall mitigation in global emissions takes place when emission reductions are delivered at a level that goes beyond what would be achieved through the delivery of the host Party’s NDC and the acquiring Party’s NDCs in aggregate and beyond offsetting.

While this view may be laudable from an ambition perspective, it would render the mitigation mechanism useless and put a stop to linkages or transfers between trading systems. For example, it would mean that the EU ETS could never accept units from outside its own borders as the ETS is integral to achieving the NDC itself. All of this must now be resolved in the year ahead.

Back to the broader COP event, the highlight for the weekend was the official opening of the unofficial pavilion of the United States of America. At every previous COP I have attended, the USA has had a very large display stand, which in recent years has had an elaborate and very popular NASA display of global climatic changes projected onto a globe. Not so in 2017, with the current Administration opting not to repeat this. An alternative appeared, apparently sponsored by various non-state actors, with the opening also being the launch of America’s Pledge (#wearestillin), where said actors (e.g. California, Washington, Virginia etc.) pledged to deliver on the US NDC, even if the nation leaves the Paris Agreement as announced by President Trump in June.

The COP now enters the second week and much remains to be done, both in this week and in the year before the end of COP24, when the Paris Agreement ‘rule book’ should be completed.