May 31, 2023 — Watching a few hours of the Article 6.4 Supervisory Body meeting today was a sometimes-frustrating experience.
The body, which will regulate a new global carbon market being set up under the Paris climate accord, is trying to set rules and procedures that will prove attractive to investors wanting to make money from emissions-cutting projects and programs.
They will either choose the UN program, or choose an alternative market, whose rules perhaps will be set by a single national government or a private standard setter.
To set up a UN market that’s more appealing than a country-based or private one is no small mandate and I’m not criticising the diverse set of people trying to fulfill it. A UN carbon credit commodity might become important because of its widespread fungibility and desirable stamp, yet that’s certainly not guaranteed.
My frustration stems firstly from the fact that the body seems to be trying to create silos among the various emission-cutting projects and methods that don’t need to be created.
One example is emission-reduction projects vs GHG-removal projects.
A project that reduces emissions might include a funky new-solar-technology generation facility (that replaces a coal plant) or a facility that captures and stores emissions from a natural-gas power plant. A removal project might be a new forest on previously unforested land, a soil-sequestration project or a direct-air co2 capture plant, with storage.
Yet, you can see from the paragraph above that reduction projects can include an element of removal — eg the carbon capture and storage (CCS) facility removes emissions before they get to the atmosphere then stores the co2 in an oil field or salt cave. Or perhaps it will make bricks out of the CO2, storing it there.
Is that CCS project a reduction project or a removal one? A bit of both?
I’m boiling it down a bit, but the debate about which emissions-cutting methods go where means the Article 6.4 negotiations are now threatening to balloon like the main UN climate talks under the UN Framework Convention on Climate Change (UNFCCC) have expanded into dozens of streams during the past 30 years, slowing progress by complication.
Do we need different streams for baselines, engineered credits, land-based credits, ocean based? I’m not sure we do.
On the issue of permanence of emission reductions, let’s not forget that all or most carbon credit projects might cut emissions only temporarily. What if the CCS plant blows up or the solar farm burns down? Are those scenarios really so different from a protected forest generating carbon credits catching fire?
Another frustration I felt today was that envoys make criticisms of the text provided by the UNFCCC secretariat but fail to immediately suggest solutions. Eg a few on the body said the methodology approval process having a 15-day comment period was too short…yet I didn’t hear a suggestion for how long it should be. Three weeks? Four? (It’s possible I missed it.)
The negotiatiing envoys seem hamstrung this week by process and doing things in an order set by people who don’t seem to see the urgency of the climate crisis. They could instead be focussing on the main game — finding way to incentivize emissions cut in the hundreds of millions of tons a year as soon as possible.
I’ve suggested a whitelist or positive list of projects could be placed on the table and approved fairly quickly. After all, we’ve been here before.
The first batch of UN carbon markets near the start of the century were successful for a while before dying several years later because of lack of demand and political commitment…and some bad rulemaking, it has to be said. Many of the rules being debated this week were resolved in pretty decent fashion 20 years ago. Envoys repeatedly said as much today.
Some older hands at the negotiations being held this week are already onto some of these issues.
I reckon it’s time to begin deploying this market almost 8 years after the Paris deal was struck. The new program can learn by doing. Things can be marked “provisional.”
Afterall, billions of dollars/euros/yuan of capital is waiting on the sidelines, as frustrated as me.
All in a day’s work
