At a workshop in June, the UNFCCC Secretariat had the glorious idea that maybe it would move things along more swiftly if we came up with a new name for the so called FVA- the Framework for Various Approaches. The FVA is supposed to be an umbrella for markets but maybe also non-markets and maybe also other schemes that produce some kind of unit that can be sold to other countries for compliance with their climate commitments.
How about SCAG – Shopping Cart for Anything Goes. Not that we like a SCAG but it sure looks like one right now.
But things are not really moving. So far, countries have not even been able to agree on the scope of the FVA. Despite the utter lack of clarity on what the purpose of an FVA should be Poland has been pushing hard, even before this COP started, to establish a pilot phase under the FVA. Now, unfortunately, if it’s coming from Poland it’s got to be bad news.
Why would Poland push for establishing an FVA? Do they want to somehow revive their AAUs?
Since arriving in Warsaw, the FVA pilot phase has magically been transformed into an information platform. So now many countries are gung-ho about such an information sharing platform. But what information would countries actually share, given that neither scope nor purpose of the FVA have been decided and given there is little appetite for any kind of carbon market units?
One of the main arguments in favour of market mechanisms has been that they create an incentive for countries to take on higher targets than they would otherwise. But to date carbon markets have not incentivised countries to take on adequate commitments. On the contrary, markets are severely oversupplied. Countries could buy millions of carbon credits for some pocket change but they don’t and they are also not raising their pledges. No, even worse, some of them are weakening them.
Some of the very same countries that have been pushing for more carbon markets are the ones who have the measliest pledges. Japan for example, so proud of their home-grown Joint Crediting Mechanism and a proponent of the FVA, just announced that well, sorry, we just can’t be bothered with that mitigation business after all.
May we remind all of the enthusiastic carbon market proponents that only if there is sufficient demand can markets function. Establishing an FVA would clearly be premature should it precede clear and ambitious mitigation commitments from Parties.
Dear delegates, the remaining global carbon budget is very small and shrinking fast. Let’s stop dillydallying and let’s get the priorities right. Ambition must come first.