–Transition from Kyoto to Paris set (sort of)
By Mathew Carr
Dec. 15, 2020 — LONDON: The board overseeing the main UN carbon market agreed to extend the program into next year, at least temporarily, creating a transition into the era of the Paris climate deal.
The move gives investors in carbon credits created in developing countries under the Kyoto Protocol a chance to get a return on their investment, which is currently threatened by low demand and near-zero prices.
The panel, the executive board of the Clean Development Mechanism, will continue registering emission-cutting projects and issuing credits on a provisional basis for the 10 months until the November talks in Glasgow, a decision needed because of delays blamed on the coronavirus pandemic.
The decision will boost risks for project investors. They must “accept the risk that it may not be possible for certified emission
reductions (CERs) to be issued for the emission reductions achieved,” according to a report of the board meeting that ended Monday (see below for link).
Emitters in the EU carbon market, the world’s biggest by traded value, can use CERs for a portion of their compliance in 2020.
The Paris climate deal establishes new carbon markets under its Article 6, which could encompass elements of the CDM.
If rich nations expect to be able to use Article 6.2 of Paris to cut the cost (and cut the risk) of meeting their Paris emission-reduction targets for 2030 and beyond, UN envoys will need to also agree rules for a carbon market under Article 6.4 of Paris, according to one emerging-nation envoy familiar with global climate negotiations.
For a report of the CDM board meeting: