BRIEFING: Carbon Market Watch expectations for the UNFCCC session in Bonn June 2015 related to the role of carbon markets in the Paris Agreement
In June in Bonn, the UNFCCC will convene its first session to begin real negotiations on the text agreed in Geneva in February. Those elements of the text that are agreed by Parties will become parts of the Paris Protocol, which should be completed in December this year.
UNEP estimates the remaining carbon budget to keep global average temperature increases below 2ºC to be only 1000 GtCO2e, and at current rates of emissions, this budget will have been spent in the mid-2030s. This means that there is very little room for offsetting, some room for emissions trading under caps, but that the focus of development and infrastructure investment needs to be on zero/ low carbon options.
Carbon markets can be useful tools to reduce emissions in sectors where there are not yet technical solutions available to reduce emissions. They can reduce costs in those sectors where emissions reductions costs remain high as the technical solutions have not yet been bought down the cost curve. While carbon markets are often seen as a cost-efficient means to reduce emissions, they may instead cause greater expense in the longer term, through allowing locking in of high carbon infrastructure that will need to be replaced before the end of its lifetime. For this reason, the use of carbon markets and in particular the transfer of international emission units should not be seen as a substitute for domestic action – in all countries and all sectors – to reduce emissions as rapidly as possible.
The main aim of the Bonn conference will need to streamline the Geneva text to a manageable and negotiable size. Parties will need to show flexibility on wording so that similar concepts can be unified. Bilateral cooperation between groups of similar positions to agree new language will be an important part of the process.
Some key issues that need to be advanced are:
– An overarching account framework to avoid double counting and undermining of climate targets
– Clarity on the future of the CDM as a tool to contribute to domestic climate action in developing countries
– Participation requirements in carbon markets under the framework for various approaches
– The need for social and environmental accountability for all climate action, including the establishment of a CDM grievance mechanism under the SBI process
The Bonn session will be an important staging post to set these issues up for ultimate agreement in December. For more information see below as well as our more detailed recommendations for the reform of modalities and procedures of the Clean Development Mechanism discussed under SBI and the discussions on the Framework for Various Approaches under SBSTA.
Read expectations here
18 Sep 2017