One step “extremely important”. On the first day of COP29, Monday November 11, countries around the world adopted new rules to regulate the controversial carbon credit market. A more than expected update, since the subject has been on the menu of international negotiations since 2015. Franceinfo explains to you what these markets are.
Credits with the idea of reducing CO2 emissions
Carbon credits are generated by activities that reduce greenhouse gas emissions, responsible for global warming. These include, for example, tree planting projects, the protection of carbon-absorbing ecosystems such as forests or peatlands, the replacement of wood-burning stoves or the replacement of polluting energies, such as coal, with solar energy. or wind turbines. Concretely, their initiators claim to absorb or store more CO2 that if these projects did not exist, and associate with this CO2under certain conditions, carbon credits.
One credit equals one ton of CO2 prevented from entering the atmosphere or eliminated from it, and can be purchased by an actor, whether state or not, to enable it to “offset” its own CO emissions2that is to say, reducing its carbon footprint on paper.
Markets launched almost thirty years ago
This possibility of exchange was launched in the wake of the Kyoto Protocol, signed in 1997. The document then spoke of “emission rights”allowing “rich countries to buy emissions reductions from developing countries, via carbon credits”explains the NGO Carbon Market Watch. Then in 2015, on the occasion of COP21 and the signing of the Paris Agreement, two new carbon markets, established by Article 6 of the treaty, replaced them.
The first allows a “good student” country, if it goes beyond the national emissions reduction objectives that it had promised, to sell its surplus reduction to another country within the framework of a bilateral agreement. “For example, if a country has committed to reducing its emissions by 100 tonnes of CO2e [tonnes d’équivalent CO2], but actually reduces them by 110 tCO2e, he will have the possibility of selling the 10 tCO2e additional costs to another country which has failed to achieve its own objectives”illustrates Carbon Market Watch. Developing countries rely on it in particular to finance themselves and oil companies see it as an inexpensive way to move towards “net zero” emissions. “Even before the ink has completely dried on the rules, countries are already getting started. There are already more than 40 contracts [d’intention] signed”reports Lola Vallejo, who follows the negotiations in Baku for the Institute of Sustainable Development and International Relations (IDDRI). She cites the examples of Singapore and Switzerland, also referenced by the International Association for Emissions Trading (Ieta).
The second expands the possibility, with possible exchanges between countries and private companies. But, a point of contention since 2015, the details of the application of these mechanisms were still waiting to be decided. Until now, this market had developed alone, outside of all rules, and was mainly used by companies wishing to “offset” their emissions and claim their carbon neutrality. On the occasion of COP26 in Glasgow, a UN monitoring body was created to “develop and supervise” rules, describes the UN on its site. And these are its recommendations that COP29 adopted on Monday. The new criteria notably describe the methodology for calculating the number of credits that a given project can generate, and what happens if the stored carbon is lost, for example if the forest concerned burns. But other official texts will still have to be forged to fully establish a reliable market.
A solution strongly criticized for its ineffectiveness and risks
But the device is strongly criticized. If paragraph 6.1 of the Paris Agreement states that these mechanisms “volunteers” are intended for “raise the level of ambition” countries, its detractors denounce a free pass given to some for not reducing their own emissions. Several studies have also shown the ineffectiveness of numerous projects, certified by lax private organizations, sometimes to the detriment of local populations. “The absence of standards, regulations and rigor in the voluntary carbon credit market is very worrying” and these must not “undermining real efforts to reduce emissions”declared UN Secretary General Antonio Guterres during COP27.
If the carbon credits defined in Article 6 are seen as rights to pollute, this is a big problem for the climate. If we see it as a limited tool, with a lot of safeguards, then it could be interesting.”
Lola Vallejo, director of the climate program at Iddriat franceinfo
Reacting to the adoption of the new rules at COP29, the NGO Reclaim Finance hit the nail on the head: “Carbon credit schemes… have repeatedly been found to be riddled with fraud, incapable of reducing emissions and benefiting carbon traders and other intermediaries more than the communities who need financing to fight climate change. There is no reason to believe that these new rules will be any different.said Paddy McCully, analyst at the NGO.
Other associations have pointed the finger at the adoption process. The method by which the texts were pushed to the climate conference was, according to them, not very transparent. Oil Change International thus criticized a decision taken “without debate or public scrutiny”. Isa Mulder, expert on global carbon markets at Carbon Market Watch, spoke of a “agreement on the sly” with “many questions still unanswered”. “This is not the end of the story, there is still work to be done for these markets to deliver on the promise made”summarizes Lola Vallejo.
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