Carbon Market Watch

For fair and effective climate protection.

COP19 #1: Stop carbon markets from undermining mitigation commitments

11 Nov 2013

For the next two weeks, countries around the world are meeting here in Warsaw for the 19th time to negotiate how the world can stabilize greenhouse gases so to keep global warming below 2 degrees Celsius.

Not an easy goal to start with but all the harder to achieve in a country that is dominated by coal power.  Inconceivably, Poland, the host country of this year’s COP19 has organized an International Coal & Climate Summit where world’s largest coal producing companies are discussing the role of coal in the global economy. The Coal summit happens at the same time as countries are trying to negotiate a new climate deal that would start in 2020 and be finalized in 2015.  

At the same time, as the host of the COP19, Poland holds the presidency of these important climate negotiations. The Polish COP Presidency has stated at several occasions that they would like to see progress on the so called Framework for Various Approaches (FVA). If established, this framework would allow countries to trade market units for compliance with their climate commitments under the UNFCCC.  Although there is little agreement on any of the key features of this framework, the idea of this global carbon market framework has been promoted widely by several Parties.

Some countries, most notably Poland, has been advocating establishing a pilot phase for the FVA. This would enable the international trade of carbon market units for compliance with climate targets. Countries participating in such a pilot FVA would be able to claim benefits for early actions pre-2020 under the new post 2020 climate treaty, for example in the form of receiving reduction units which they could use for compliance under the new climate regime. This would set a dangerous precedent because it would potentially open doors to create even more hot air than we already have. Ultimately, such a pilot phase would effectively risk the integrity of a future climate deal. For more information on the FVA, see our policy brief “Herding the global carbon market cats: recommendations for the negotiations of the framework on various approaches”.

While keeping our eyes on the FVA in Warsaw, we’ll be advocating strongly for the exclusion of coal power from the CDM. The CDM’s reputation has suffered so severely that policy makers have started to reconsider whether the construction of new coal fire power plants should be financed through the CDM. Way to go!

Moreover, as the CDM project Barro Blanco in this Watch This! edition shows, there is urgent need to establish safeguards to protect local communities from negative impacts during the implementation of CDM projects. Safeguards will be relevant beyond the CDM and will become an essential element for all future climate mitigation mechanisms, such as projects financed by the Green Climate Fund, REDD projects or NAMAs.

 

Today, we have sent the open letter “Stop carbon markets from undermining mitigation commitments at COP-19”, signed by 87 organisations from 33 countries to UNFCCC ministers and delegates around the world and calls for:

  • Agree  on requirements for clear, equitable and ambitious mitigation commitments to ensure we can stay below 2 degrees warming;
  • Reject a pilot phase for trading carbon market units under the Framework for Various Approaches (FVA) to avoid that the new post-2020 climate regime be undermined;
  • Establish an international accounting framework under the ADP to avoid double counting and allow for net atmospheric benefits to be achieved;
  • Ensure that access to carbon markets be linked to ambition to avoid that no new hot air is created;
  • Exclude clearly non-additional project types, such as large power projects, from the Kyoto’s flexible mechanisms CDM and JI to avoid undermining our climate protection efforts;
  • Stop climate finance for coal power and exclude coal power from the CDM;
  • Establish safeguards to protect human rights when climate mitigation projects are implemented under the CDM, the Green Climate Fund, NAMAs or future carbon markets.

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