UN talks inch forward rules on Article 6

UN climate negotiations in Bonn, Germany, have concluded with "uneven" progress made towards completing the rules for the UN Paris climate agreement, including the guidelines that could launch a global carbon market.

Negotiators met to continue writing the rules that will implement the Paris agreement when it comes into force next year.

The Bonn event focused on writing the technical rules, with final decisions on politically sensitive issues not expected until ministers meet at the UN climate summit in December (Cop 25), which will take place in Santiago, Chile.

But the latest draft texts from Bonn are longer than those from the start of the meeting, and contain multiple options that ministers will need to reach a compromise on at Cop 25.

"All options are still in the text," non-governmental organisation Carbon Market Watch (CMW) policy officer Gilles Dufrasne said.

Article 6.4

Article 6 contains rules that would allow countries to trade emissions reductions under the Paris agreement. This could provide the foundations for an international carbon market.

A key issue in the article 6 talks is the future of clean development mechanism (CDM) projects, and the certified emissions reduction (CER) credits generated by these projects.

Negotiators this week came no closer to deciding whether CDM projects, and their CER credits, will be transferred to a new mechanism that will be set up under the Paris agreement. This would mean the credits could be used for compliance with the Paris agreement.

The latest text includes options to transfer all credits, transfer credits produced before or after a specific date, or to ban all transfers.

No option has support from a majority of countries. Brazil and India — both of which have produced, and not yet sold, millions of CER credits — pushed for credits to be transferred to the new mechanism. African countries, small island states and least-developed countries opposed the transfer of credits.

Environmental groups including CMW have warned that CER supply could swell to 4.6bn credits by 2020. If the rules do not prohibit it, countries could buy large quantities of cheap credits to meet their Paris targets, instead of investing in new projects to cut emissions.

"This could really blow a hole in the Paris agreement," Dufrasne said.

Article 6.2

Article 6.2 contains rules allowing countries to trade emissions reductions — known as Itmos — and count them towards their emissions reduction pledges under the Paris agreement.

Negotiators have not yet decided whether Itmos will be measured in tonnes of CO2 equivalent (CO2e) only, or by using other measurements as well.

Saudi Arabia led efforts during the talks to allow non-CO2e measurements. Environmental groups warned that using different measurements could create loopholes and allow countries to manipulate the way their CO2 cuts are counted.

"The potential to game this conversion process seems enormous," Climate Action Network said.

Various methods to avoid "double counting" emissions cuts also remain in the text. Double counting occurs when a single emissions reduction is used for compliance with multiple climate schemes.

Countries' positions on this issue "have not really changed since Cop 24", International Emissions Trading Association international policy director Stefano De Clara said.

Ministers will need to hold further talks ahead of Cop 25 to try to reach compromises, he said. This is likely to take place during a UN climate summit in New York in September, and a "pre-Cop" round of talks in Costa Rica in November.

Not "welcome" here

Countries came under fire from environmental groups for excluding a major climate science report from the Paris agreement text, after countries including Saudi Arabia refused to discuss its findings.

The latest draft text expressed "appreciation" to the Intergovernmental Panel on Climate Change (IPCC) for its report, which warns that global warming must be capped at 1.5˚C, rather than 2˚C, to avoid the most severe impacts of climate change.

But the text failed to "welcome" the report's findings or encourage countries to implement policies to hit the 1.5˚C goal. The EU had pushed for this wording at last year's UN summit.

"Saudi Arabia blocked substantive discussions called for by a large number of vulnerable developing countries on the implications of the IPCC [report]," Union of Concerned Scientists policy director Alden Meyer said.

"If we cannot accept the messages of science when formulating our scientific advice, we are not doing our job," Ana Villalobos, a Costa Rican delegate at the UN talks, said.