Day 9: 15 November 2022
Molly Peters-Stanley and Trigg Talley from the US negotiating team provided an update to the BINGO constituency on Tuesday morning, facilitated by Eve Tamme from Climate Principles
The pressure is building…
Work continued in contact groups on reducing the number of contentious elements in the draft decision texts on Tuesday, but there was relatively little progress to report back from the Article 6 negotiations.
As we reported yesterday, the Egyptian Presidency gave technical negotiators until the end of today to clean up their draft texts, saying any remaining issues would be kicked upstairs to ministers for political guidance.
Tuesday evening, COP President Sameh Shoukry held a very short stocktaking plenary and told delegates that “progress has been made” but that some issues require additional technical work. This work, he said, must be finished by the end of Wednesday.
But other issues are now ready for higher level political engagement, including Article 6, Shoukry said.
Ministers Grace Fu of Singapore and Espen Barth Eide of Norway were tasked with leading consultations on Article 6 and other related mechanism issues (including the CDM). The Presidency has also sought ministerial assistance on the mitigation work programme, the Global Goal on Adaptation, Finance and Loss and Damage financing.
The Presidency will convene meetings with all ministers on Wednesday to work out the path forward.
An updated text on Guidance to the CDM dropped this afternoon. The document still has a large number of options and brackets, mostly relating to deadlines for the issuance of CERs, deadlines for the approval or updating of methodologies, accreditation, and for transfers of CERs into the Article 6.4 mechanism registry.
Authorisation issue update
We’ve had some time to look into another aspect of authorisation, in this case the authorisation of emission reductions, which as we said is a relevant topic under both the Article 6.2 and Article 6.4 tracks.
In the Article 6.4 talks, Parties are disagreeing on the issuance and use of “non-authorised” Article 6.4 Emission Reductions (A6.4ERs).
Negotiating positions are quite far apart on this issue. Brazil, the African Group of Nations and the Like-Minded Developing Country group, which counts about 25 members ranging from China, Indonesia and Saudi Arabia to India, Malaysia and Pakistan, believe that A6.4ERs can be issued by host countries without necessarily being authorised for use in the Article 6.4 mechanism.
That would mean that these reductions could potentially flow to voluntary buyers. And since they are formally issued as A6.4ERs, they would still be subject to rules regarding Share of Proceeds and Overall Mitigation of Global Emissions.
Essentially, in the Brazil/AGN/LMDC view, non-authorised A6.4ERs could be seen as another voluntary market credit under a global UN-operated standard.
Opposing this point of view are countries in the Environmental Integrity Group (a group of five Parties led by Switzerland), while the Umbrella Group and the EU are also thought to oppose it. Our understanding is that these Parties don’t want any “non-authorised” credits to be made available to buyers. Instead, they should be used towards domestic reduction, ie NDCs.
Other COP news
Elsewhere at COP27, at an event featuring IETA’s International Policy Director Andrea Bonzanni, Nigeria unveiled plans to launch a cap-and-trade market to cover selected sectors of the country’s economy.
The UNFCCC and UNEP launched a new five-year technology programme under their respective Technology Executive Committee (TEC) and Climate Technology Centre and Network (CTCN). The programme will work to accelerate deployment of low- and zero-carbon tech across developing countries. The US contributed $3 million in funding to the new effort.
Seven countries led by the EU, United States and the UK announced at the G20 meeting today a new Just Energy Transition Partnership to help Indonesia shift away from coal power. This follows on from last year’s inaugural initiative focused on South Africa. The partners will mobilise up to $20 billion – half of which will be public money with the balance to come from GFANZ members.
And there have been some big carbon credit deals announced at COP27 as well. Today’s big news was that Cambodia has agreed to sell more than 10 million REDD+ offsets to buyers including Arbor Day Foundation and Everland.
IETA COP27 Business Hub news
Wednesday at IETA’s #COP27BizHub starts at 0800 hrs with a session highlighting the potential for nature-based apron removals. IETA members Pachama and Arbor Day Foundation will discuss the capital challenges facing the sector, which could contribute 30% of the reductions to meet the Paris goals.
At 0900 hrs, Verra’s senior director of climate policy and strategy Andrew Howard will lead an examination of what host countries are doing with Article 6, how projects will need to work with the mechanism and where developers can support project benefits on the ground.
The voluntary carbon market is the topic at 1030 hrs, when GAIA and Mundo Verde will host a panel discussion of voluntary offsets and how they can unlock finance, from the perspective of bankers, investors and project developers.
We welcome Harvard University’s Robert Stavins to the Business Hub at 1200 hrs, when he and a panel of experts including our Chairperson Lisa DeMarco, former CEO Andrei Marcu and ENI’s Daniele Agostini will review existing carbon markets and how they match the economists’ ideal.
At 1330 hrs our CEO Dirk Forrister will moderate a discussion of the importance of robust and transparent data in underpinning carbon markets. Speakers representing the World Bank, Gold Standard, BeZero and the government of Chile will participate.
VNV Advisory will present a session at 1500 hrs looking at the co-benefits that impact investing in climate projects can offer, including social networks, gender equality and inclusiveness and affordable and clean energy.
At 1630 hrs Chia Network will present a discussion on blockchain technology and how immutability and transparency can enable efficiency, accountability and trust to support coordinated global action toward climate change mitigation.
The final event on Wednesday at 1800 hrs sees our International Policy Director Andrea Bonzanni moderating a panel representing state and private actors to discuss the early lessons and experiences of IETA’s Business Partnership for Market Implementation (B-PMI).
We’d like to thank all our main partners, supporting partners and sponsors who are making IETA’s programme at COP27 possible. Your help and participation is appreciated!