On Saturday, COP28 delegates met three times to negotiate on one of the most complex issues under the Paris Agreement: the rules, modalities and procedures of the mechanism established under Article 6.4 of the Agreement itself. In a nutshell, it is about the functioning of emissions trading under the new global governance of Paris in its global version, applicable to the whole world (whereas Article 6.2 orders such agreements between individual states, thus bilateral).

Why is it being negotiated? On what? 

Going back in time, we see that the last substantive decision on the issue dates not to the June 2023 interims, when the topic was essentially postponed to this COP, but to COP27 in Sharm el-Sheikh. At COP27, small progress was made with Decision 7/CMA.4, with much of the discussion on Article 6.4 focused on avoiding double counting of emission credits in the NDCs of countries (who manages and pays for the mitigation project, who ‘receives’ it on their national territory). It was also decided to dedicate 5 per cent of all shares of proceeds, i.e. taxes on credit transfers, to the Adaptation Fund.

Instead, the discussion here at COP28 seems to have shifted to CO2 removals from the atmosphere through reforestation and afforestation projects, as well as – surmountable – diatribes over units of measurement and some more ‘political’ wording in the currently circulating draft text.

The European Union, the AOSIS group (small island states), the United States and Canada have shown, to varying degrees and intensities, a certain opposition to the use of language that is too open towards an ideal, but not accepted, rather than complementarity between offsetting measures (removals, carbon sequestration) and emission reductions. In the words of the EU delegate, who emphasised that this week’s was ‘a very difficult decision on a complex issue’, the excessive juxtaposition of removals with mitigation in the text leads us astray, at a time in history when we need ‘deep cuts’ in global emissions instead. As if to say that projects developed under Article 6.4 will not be a diversion from the main mission, which is to implement national NDCs (also through Article 6, certainly) and quickly reduce global climate-changing emissions.

The European Union also pointed out that, a few hours before the expected closure of the negotiations on this issue (between 9 and 10 December according to the Presidency), some paragraphs of the draft decision are still unclear, in particular 12, 13, 14 and 15, in which, among other things, the passage of credits born under the old Clean Development Mechanism into the new global Paris system is addressed.

Also noteworthy is the thirteenth paragraph of the text, in which we now find an exemption for the Least Developed Countries (LDCs) from the provision to donate 5% of the shares to the Adaptation Fund, for those countries that want to do so. A half step back on a decision taken only a year ago, probably under pressure (behind the scenes, no one in the room talked about it) from some of those countries. Still in terms of particularities, the European Union and Canada have signalled their opposition to possible new exceptions in reporting and rules for certain types of projects, as envisaged in the current wording of paragraph 15.a.

In paragraph 20 of the draft decision, the COP requests the Supervisory Body (the body that regulates the development of Article 6) to develop a new work programme that, among other things, can help countries distinguish between emission reductions and carbon removals and/or carbon capture in projects submitted under Article 6.4. We also witnessed a debate in the chamber about the wording of paragraphs 20.c and 20.e, in which reference is made to contributions from buffer pools, a term that even according to the delegate of the Coalition of Rainforest Nations is not understood, has never been used to date and is ultimately inappropriate in this context where it would be better to speak of ‘reserves’.

In paragraph 20.k, the idea of “reconsidering tonne-year counts for removals based on natural methods” returns to the text after years, a reference widely contested today in the plenary by the European Union, the Environmental Integrity Group, and Like-Minded Countries, while Canada has repeatedly come out in favour. That of tonne-year counts under Article 6.4 seemed to be a closed issue at least since COP27, considered deeply controversial by various civil society groups and strongly attacked, just today, by Climate Action Network in its daily booklet ECO – to better understand what it is about, you can read this piece by Carbon Credits.

Problematic, finally, is the wording of negotiation options 1 and 2, which in fact constitute the title and incipit of paragraphs 24, 25 and 26. In short, these paragraphs – as currently formulated – forcefully bring carbon removals, without specifying whether natural or man-made, into the realm of so-called ’emissions avoidance’ projects (emission avoidance, a formula widely debated between COP27 and the last interims) and nature conservation, ‘provided that’, the text says, ‘it complies with the requirements established by the rules, modalities and procedures of the mechanism’. In the last evening negotiation on Saturday there seemed to be convergence on option 1, which holds avoided emissions and nature conservation together, while option 2 made a clear logical distinction between the two issues.

Finally, paragraphs 28 and 32 set out some ground rules on the mandatory reporting of countries proposing projects and the actual allocation of the credits created to the implementing party or project host country; according to the Coalition of Rainforest Nations, the wording of the two paragraphs circulated during the day left ‘dangerous’ room for interpretation.
The third and final negotiating session on Article 6.4 closed with all these doubts still unresolved, to the utter frustration of the session’s facilitators, who told delegates at the end (20.10pm Dubai time) that, given the lack of time, no further negotiations would take place except on a final text, on which they would work during the night of Saturday 9 to Sunday 10 December with the aim of presenting a new, final and ‘clean’ draft by Sunday noon.

Article By Jacopo Bencini, Policy Advisor – EU and Multilateral Climate Policies, UNFCCC Contact Point

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