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The New Article 6: We Know What We Need (ECO: UNFCCC SB48)

Market negotiations resumed at full speed in Bangkok, with new text being published after only one day of negotiations. Parties are feeling the pressure now that COP24 is looming. We’ve started the session by hearing lists of priorities for items that could not be postponed to 2019 (assuming  that not all issues could be resolved at COP24). Two of these priorities stick out for ECO: the need to avoid double counting through corresponding adjustments for all international transfers, and the transition away from Kyoto Protocol Mechanisms to Article 6. This applies especially to avoiding double counting with ICAO’s CORSIA! ECO shares the view that these are crucial priorities if market mechanisms are to increase ambition, but one critical priority was missing. We need to ensure compliance with human rights and social safeguards to avoid the ghosts of the Clean Development Mechanism (CDM) coming back to haunt us after 2020.

Now urgently need to operationalize rules in order to ensure that the new market mechanisms can start on the right foot and promote ambition in the Paris Agreement. After hearing Parties mention the transition from Kyoto Protocol (KP) mechanisms to Article 6 as a key priority, we were surprised when we discovered that there is no strict timeline to deal with the transition of these elements within the documents drafted by the co-chairs. Failing to have an end date would send a disheartening signal to the world and all market actors, indicating that Parties do not feel the urgency to incorporate the lessons learned from the CDM, which has seriously disrupted the livelihoods of entire communities.

Parties’ commitments to decide when and how corresponding adjustments are required in 2018 is clearly a hot topic. However, we struggled to understand how the issue would be dealt with. Especially between the hours of 7:30 and what turned into 15:00. While we see that there is a clear attempt to structure the discussion, we’re not convinced that all important elements are where they should be. What we know for sure is that we can’t postpone the development of clear rules on how one tonne of CO2 can be prevented from being double-counted.

We haven’t heard enough about, are environmental and social safeguards and human rights. These seem to have fallen through the cracks of Parties’ priorities for 2018. While most were eager to deal with the transition from the CDM to Article 6, we want to hear more about how they will put into practice the lessons learned from the CDM. This includes setting up a robust grievance redress mechanism, safeguards to ensure projects do not cause environmental and social harms, and detailed rules for mandatory stakeholder consultations before the implementation of projects.

While Parties get ready for a deep dive into accounting technicalities, we urge them not to forget the importance of drawing upon lessons from the past. A red line must be drawn above the use of CDM units after 2020. This was a fact highlighted at COP21 when Parties were urged to cancel Certified Emission Reductions (CERs) before 2020, because they cannot help meet the Paris reduction targets. Necessary provisions for the Article 6 “sustainable development mechanism” must be put in place to avoid the dramatic adverse impacts on indigenous peoples and local communities we’ve witnessed under the CDM. After all, the markets shouldn’t be in the business of harm!


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