The world’s climate negotiators recently concluded two weeks of discussions about the next steps for the landmark 2015 Paris Agreement, with carbon market rules high on the agenda.
The annual mid-year climate negotiations are generally held ahead of the annual Conference of the Parties (COP), the top decision-making body for climate negotiations.
The recent COP24, in Katowice, Poland, was heralded by many as a success in multilateralism and diplomacy. It adopted an almost complete set of rules and guidelines supporting implementation of the Paris Agreement. However, the parties did not ultimately reach a consensus on one specific area: the rules for using carbon markets.
These rules are known in the climate jargon as the “Article 6 rules”, after the Paris Agreement article that mandates them. After the inconclusive talks at COP24, negotiators were tasked to come up with a new proposal for the Article 6 rules that could be adopted at the next COP25, in Santiago, Chile, later this year.
At the recent meeting in Bonn, which concluded last week, countries made good progress on technical discussions and came up with a new negotiating text. But disagreements remain about the status of the text and how to take it forwards. This means that there is everything to play for as we move towards COP25.
Here are some key points for understanding why carbon markets matter so much under the Paris Agreement and what the bottlenecks are in the negotiations.
What is Article 6 of the Paris Agreement?
Carbon markets are aimed at lowering the cost of reducing greenhouse gases emissions. Expanding and linking those markets internationally can help further drive down the cost of achieving emission reduction targets, helping to stimulate the needed investments for clean energy transitions.
By agreeing to Article 6 of the Paris Agreement, countries opened the way for a new form of international interaction on carbon markets. Article 6 builds on a long history of market approaches under the Kyoto Protocol, the Paris Agreement’s predecessor.
Article 6 is intended to support countries in enhancing the ambitions of their stated climate actions, known as Nationally Determined Contributions (NDCs), which collectively contribute to the overarching goal of the Paris Agreement: keeping the rise in global average temperatures to well below 2 degrees Celsius and to pursue efforts to limit the temperature increase to 1.5 degrees Celsius. However, the nature of carbon markets means that robust rules are important to ensure that environmental and sustainable development gains are realised. Article 6 introduces two voluntary market-based paths for international co-operation.
Article 6.2 sets out the principles for voluntary co-operative approaches. One country can transfer so-called “internationally transferred mitigation outcomes” (ITMOs) to another country, which can then use them towards its NDC target. These transfers must apply robust and transparent accounting rules to avoid double counting of ITMOs and to ensure environmental integrity. The transfers can take place using various approaches and mechanisms, such as bilateral cooperation programmes between countries, or national or regional emission trading schemes (ETS).
Article 6.4 establishes a mechanism to contribute to the mitigation of greenhouse gas emissions and support sustainable development, under the oversight of a central UN governance body. Public and private entities can participate in this mechanism if authorised by a country. While the main intention is that emissions reductions from the mechanism will count towards achievement of countries’ NDCs, the mechanism could also be used in other ways. For example, airlines could use credits from the mechanism to comply with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) of the International Civil Aviation Organization (ICAO). Other companies could use them to count towards carbon neutrality. However, double counting of these emission reductions must be avoided.
Despite the lack of a formal outcome on Article 6 at the recent negotiations in Bonn, countries made substantial progress and had constructive discussions. Differences remain on several issues ahead of COP25, though. For instance, countries have not yet agreed on an accounting system to avoid double counting and other elements needed to prevent potential environmental integrity risks.
How is the IEA contributing?
The IEA is contributing to the discussions on Article 6 – as well as to the negotiations more broadly – through technical analysis by the joint OECD-IEA Climate Change Expert Group (CCXG). For more than 25 years, the CCXG has been developing and publishing technical papers in consultation with a wide range of countries to inform ongoing climate negotiations.
Through the CCXG, the IEA recently co-published a technical paper that analyses two specific unresolved issues in the negotiations of rules for Article 6 of the Paris Agreement: the accounting system of Article 6.2, and the implications of a potential transition of Kyoto Protocol mechanisms to the Article 6.4 mechanism. The outcomes of the paper were presented at a side event during the Bonn conference and directly informed the negotiations.
The CCXG also convenes two major events per year to promote dialogue among government delegates and experts from developed and developing economies, outside of the formal negotiations. Discussions stretch well beyond carbon markets, also covering the transparency framework of the Paris Agreement and climate finance issues, among others. The next edition of these invitation-only Global Forums on the Environment and Climate Change will be held at the IEA headquarters in Paris on 1-2 October. In addition, the IEA is ramping up its efforts to support countries in implementing and enhancing their NDCs.
Tipping Points in Australia’s Climate Change debates. Where to Now?
A record-breaking high summer came early to Australia in 2019. By October, the daily weather map of the country was charting the rapid spread of catastrophic bushfires in disparate regions across the entire island continent. This meant recurrent, intense weather events that combined 40°C temperatures, ferocious winds and dry lightning storms, in which sparse rainfall evaporated before it reached the ground. With the forecasts came repeated warnings: the country’s substantial resources and manpower provided no guarantee the fires that were erupting in such conditions could be contained. Nor that local people and properties could be safeguarded.
For months on end came each day’s tally of the nightmarish realisation of the forecasts. By early January 2020, almost two million hectares of the countryside had been reduced to blackened landscapes. Among the hardest hit were the eastern states where 80% of Australia’s population live. Out-of-control fires in the tinder-dry old eucalypt forests and remote mountain bushland were merging into megafires. Along a 1000 kilometre front on the New South Wales seaboard this meant up to 60 metre walls of flame and ember showers that created windblown spot fires up to 30 kilometres away. With little chance of saving their homes, residents of towns and villages evacuated to makeshift community centres and nearby beaches. An estimated 800-900 houses were destroyed, with a higher number anticipated as evacuated families gradually return to streets of rubble and ash. Driven by the strong winds, a thick, toxic pall of grey smoke had also blanketed coastal areas, as well as inland regions including the national capital of Canberra. Peaking at around 20 times acceptable levels of pollution, the pure mountain air of Australia’s showpiece garden city now had an Air Quality Index that was among the highest in the world. The city’s government handed out free face masks, advised its citizens to stay indoors and for a time closed public institutions and offices. With the sun a spectral red in a sepia-coloured sky, the result was a sensation of eerie, off-world emptiness. As one commentator suggested, the bushfires were like some relentless, hellish creature stalking Australians from all directions.
Meantime, the season of horror and catastrophe has brought renewed momentum to the country’s climate change debates. These are strongly politicised debates. With at least a thirty-year history, they have ranged from the baneful nonsense of the Far Right’s outright climate change denial; to a hesitant, ill-informed scepticism about the limits and accuracy of the science that links Australia’s weather patterns of recurrent droughts, floods and bushfires to wider global climate change; to claims that our carbon emissions are insignificant when compared to those of China, Russia or the US; to apocalyptic predictions of an imminent ‘sixth extinction’ caused by wilful ignorance of the extent of humankind’s destruction of the planet’s eco-systems. In more recent years, there also has gradually emerged qualified optimism that innovative, adaptive technologies can and will provide solutions to the environmental threats.
But in the wake of the bushfires, the prevailing consensus among Australians is challenging the confusion and complacency generated by these debates. To an angry public, the destruction wrought was unarguably unprecedented and only explicable in terms of global climate change. This is evident across social media outlets, the mainstream press, elite opinion makers, the emergency services, the rural towns and farming communities, the more progressive voices in the corporate sector, and to the thousands of anti-government demonstrators on the streets of the state capitals calling for Prime Minister Scott Morrison’s dismissal. Their insistent view has been that their country was blindsided by its third-rate governance under Morrison’s extreme Right-Wing leadership. Specifically, this has meant federal government inertia, dismissal of warnings by independent experts, and funding cuts to key bureaucracies, climate change research institutes and fire control services. The result has been that Australia was drastically ill- prepared for the impact of the coming summer of extreme temperatures combined with prolonged drought.
Moreover, the Morrison government has been widely accused of falling back on traditional, nationalistic ‘meet and beat’ rhetoric. Here what is implied is that we resourceful Aussies would voluntarily rise to the challenge of the seasonal bushfires and emerge victorious. It has also been the Prime Minister’s sloganizing term for his repeated claim that Australia continues to advance towards its 2030 carbon emission reduction targets. For the country’s climate change researchers, and probably most of the rest of the world, this last apparent reassurance severely strains credibility. Not least this is because the current fires have been belching poisonous carbon monoxide and dioxide into the stratosphere, already reaching approximately twice the levels of Russia’s 2019 Siberian wildfires. According to data from a December, 2019 World Economic Forum Report, the bushfires had already pumped out half a year’s CO2 emissions. As well, the report warned that ‘vegetation vital for absorbing CO2 is being destroyed by the blazes.’ To paraphrase a recent media headline, when it comes to climate change debates, ‘Australia has a serious bulldust problem.’ In short, Prime Minister Morrison’s ad hoc political strategies have been perceived as omitting any substantial forward planning or persuasive policy agenda.
All of which raises the question of the extent to which the bushfires might prove to be a turning point towards a more enlightened, informed plan to protect and nurture our environment. The concern is that it might be slow in coming. With some fires yet to be extinguished and smog predicted to choke cities and regional areas at least until April, 2020, for the immediate future the focus is on clean-up and recovery. The Morrison government is providing a two billion dollar funding package for a range of welfare services and for rebuilding communities, as well as for the millions of injured birds and animals to be rescued, nursed and relocated to surviving bush habitats. Australia’s Defence Forces have also been deployed to help in the recovery efforts. Though much needed, it is a strategy that has been satirised by one of Australia’s leading political cartoonists as a panicked Morrison with his backside on fire holding out a fistful of dollars to a scornful polity.
What then of this alleged absence of substantial national policy-making, of the urgent need for transformational planning as the world changes? At a grassroots level the bushfires are already proving to be a further stimulus to a long list of environmentally conscious initiatives, from the rejection of plastic packaging, to voluntary community replanting of tree coverage and grasslands, to fashionable inner-city restaurants surrounded by their own patches of homegrown vegetables, to eco housing design that includes the use of fireproof materials and air filters, to cycling to one’s workplace. For example, in Canberra its territory government guidelines require all new housing to include a water storage tank under the foundations and solar panels on the roof; there is a network of bicycle paths across the city, weekend markets for regional organic farm produce, and fenced sanctuaries to protect native wildlife, which are monitored by park rangers. In line with other state capitals and countries, the city is also phasing out the use of gas, as a stepping stone towards a target of zero carbon emissions by 2045.
With the hope of a more fundamental impact that transcends federal government complacency, there is also an expanding, grassroots focus on the applied science of long-term regenerative agriculture, whose aim is to rescue the arid, drought-ravaged farmlands. Its methodologies go beyond the long-standing European techniques of artificial soil fertilisation and piped irrigation, of the kind that have risked turning the inland lakes and river systems, most notably the Murray Darling Basin, into shallow, permanently-polluted puddles. Instead the starting point is a geographical survey to identify the potential of a degraded, natural water course. The next step is the planting of an abundance of native trees, shrubs, reeds and rushes along its banks and erecting stock proof fencing. As well, ‘live weirs’ are built at intervals to provide erosion control structures that slow water flow and help to reinvigorate the surrounding floodplain through spreading seepage. Within a decade or so the result is described by its practitioners as: a healthy, vibrant ecosystem, filtering water through its extensive reed beds, capturing flood sediments, recycling nutrients and providing complex habitat for birds, mammals, reptiles, frogs, fish and invertebrates. Productivity on the floodplain also increases by around 60%.
The success of an initial project on Mulloon Creek in the New South Wales hinterland has not only been profitable, but has led to establishment of the Mulloon Institute. The Institute has since been selected by the United Nations Sustainable Development Solutions Network (SDSN) as among its top five for its world class development of environmental resilience alongside agricultural productivity. Its current aim is to facilitate 100 landscape projects across Australia and internationally that are similarly profitable and sustainable. Incidentally, it has also been pointed out that these methodologies might well have prevented the fertile gardens of ancient Mesopotamia’s Tigris/Euphrates floodplain becoming the deserts of modern Iraq.
What follows considers a more comprehensive national economic plan that addresses directly the failures of successive, backward-looking conservative governments in preparing the country for the savage onslaught of climate change. The plan incorporates more than a decade of econometric monitoring by the University of Melbourne’s Professorial Fellow, Ross Garnaut, that compares the rising financial costs of maintaining our fossil fuel industries with the profitability of transitioning to renewable energy sources. When he began his study in 2007, Garnaut says, his data confirmed the prevalent assumption that a transition economy based on renewable energy and zero carbon emission technologies would be marked by a period of austerity detrimental to both developed and developing countries. His most recent book, Superpower Australia’s Low-Carbon Opportunity, published in November 2019, reviews his earlier data, concluding that such economic considerations have changed fundamentally and will continue to do so. Falling global interest rates which have reduced the cost of capital, combined with the likely rising price of fossil fuels as a result of increasing demand in large developing countries, is making products and projects that reduce green-house gas emissions more lucrative alternative investments.
In addition, there have been relatively rapid transformative cost reductions in machinery for producing electricity from wind and sun, in battery storage of electricity, and decarbonisation through electrification of transport and in other areas from small to medium businesses to large-scale manufacturing. In other words, for an imaginative, forward-looking company there is a considerable wealth to be made in the transition economy. Garnaut also concludes that Australia is singularly blessed with the geography and resources to be a front-runner in the creation of multi- billion dollar domestic and export industries in renewables. ‘If we all understood the economic value of a transition to renewables,’ he says, ‘we could move from policy incoherence to hope.’ With regard to the issue of whether wishing makes it so, of whether despite his detailed pursuit of statistical evidence in the dismal thickets of economics, Garnaut errs on the side of optimism, his book elucidates a couple of core Australian case studies. The first charts his personal experience of applying research-based knowledge in partnership with private-enterprise. In 2015, he became Chairman of Zen Energy, a South Australian company, with plans to scale up from a relatively small supplier of solar energy and battery storage technology to providing renewables to entire communities and industries. In 2017, the company merged with the British- based, multi-billionaire, Sanjeev Gupta’s global GFG Alliance. Though the evidence is not yet available, the rebranded SIMEC Energy Australia has claimed it will supply 100% of South Australia’s electricity needs by 2019. As Garnaut puts it: ‘…what in 2008 and 2011 I had perceived to be a possibility of modest dimension had become a high probability of immense economic gain.’
A second of a number case studies outlined in Garnaut’s book is the massive investment in solar farming in the semi-desert expanses of Northern and Western Australia. A $20 billion development by a Singapore-based company, Sun Cable, together with substantial planning and investment by two of Australia’s wealthiest men, Michael Cannon-Brookes and Andrew Forrest, is currently building what it promises will be ‘the world’s largest solar farm.’ The plan is for a 15,000 hectare array of 10-gigawatt capacity panels, backed by battery storage, which would not only supplement domestic electricity needs. The clean energy would also be exported to Singapore, using a 4500 kilometre, high-voltage, submarine cable. The company’s Chief Executive, David Griffin, describes the project as capturing ‘one of the best solar radiance reserves in the world,’ adding it will operational in less than decade. Further to the west in the Pilbara region, plans are also currently being developed by the Asian Renewable Energy Hub for an even bigger wind and solar hybrid plant, using giant wind turbines and solar panels. The electricity generated would be used primarily to run a hydrogen manufacturing hub to supply a proposed export market in Japan and South Korea.
Among many other researchers, Garnaut describes these projects as climate change mitigation. Implicit here is the deep-seated global concern that they will not be adequate in meeting the imperative that carbon emission increases should be less than 2% – and preferably closer to 1.5% — with a reduction target of zero emissions by 2050 to avoid the acceleration of catastrophic weather events. There is some comfort to be had for Australia in his findings that the country is already embracing a global trend towards a transition economy. But Garnaut also implies that there is little to be gained from a federal government that has continued to stump the debates for renewables against fossil fuels. Instead, state government support, grass roots initiatives, private sector enterprises, expertise that informs new developments, global partnerships and investment have been emerging as a way forward to a more hopeful future.
From our partner RIAC
You never miss the water, till the well runs dry
In the past twenty years, virtually every country around the world has experienced natural calamities if we have experienced it in the form of drought, famine, immense downpours, and snowfall – in the same vein the world experienced it in the way of wildfire, Tsunami, hurricanes, flood, volcanic eruptions, earthquakes and pandemic ailments. The question is, who is accountable for all the calamities and who will pay the price? Nevertheless, it is hard to deny that human civilization is having profound effects on our planet, and very few places persisted unharmed.
This article gives a minor insight into reality, stressing that climate change is not only a threat to water availability or food scarcity but also a significant threat to biodiversity and all the major causes of environmental disasters. The above problems are coupled with one single problem “the rise in global temperature.” Since the dawn of industrialization, the average global temperature increases gradually – no serious step has been taken to tackle the problem.
As the sun’s rays reach the earth’s surface, most are absorbed and re-emitted as heat. Greenhouses gasses such as water vapors and carbon dioxide absorb and re-radiate some of this heat; an increased number of greenhouses gases in the atmosphere mean more heat is trapped – warming the earth. The continued burning of fossil fuels like gas and coal, as well as other anthropogenic activities, have increased the concentration of carbon dioxide in the atmosphere by 45% since the industrial revolution. As a consequence of the human egoistic actions, the global average surface temperature has raised by 0.8OC over that time. However, it is not just a number we should worry about; the costs of the rising temperature is already being felt here and now.
In current 0.8OC rise in temperature, further changes to the climate in recent times can be seen in the warming of the ocean, a rise in sea level, immense heatstroke, decreasing ice sheet and snow in the northern hemisphere as well as a decline in the sea ice in the Arctic. In the coming future, if the emission continues unimpeded, then further warming of 2.6OC to 4.8OC is predictable by the end of this century. Nonetheless, at the low end, this would have a serious implication on human societies and other natural habitats.
Like other greenhouse gases, carbon dioxide is a dynamic gas in global warming. When a considerable amount of carbon dioxide gas is released to the atmosphere, it acts like a blanket preventing the heat from absconding, which comes back to the earth with no place to escape, further intensifying the average temperature. As per the world, average temperature rise, ice sheets, and glacier melt and the sea level expand, which disrupts the coastal communities, infrastructure, and small lands nearby sea.
Climate change also making weather more extremely hot or cold, and further, sever warmer weather and ocean produce a considerable number of hurricanes as well as torrential downpour and wind. In drier areas, global warming is linked with wildfire, drought, amidst all the wildfire has experienced very recently in many countries around the world.
Remarks: In the past years, most of the countries around the globe have witnessed record-breaking changes in the weather; in the same vein, thousands of agreements have been signed by the states to reduce carbon emission; nevertheless, all deals are nothing more than words on pages. The question is, who will make those words a reality. Despite a large number of the accords, none of the agreements came into a function; lack of seriousness is the leading cause. In such circumstances, combine efforts are essential; it is also the concern of the United Nations to push those countries which emit a high amount of greenhouse gases.
The Paris agreement on climate change means working with UN member states to reduce the number of carbon emission by 1.5%, which indeed is the only choice to contest climate change. Since the Paris accord, global banks have invested $1.9 trillion in fossil fuels. The world’s top 100 productive industries are responsible for 70% of global carbon emissions; the G20 countries account for 80% of global carbon emissions; the wealthiest 10% of the world’s population produces half of the carbon emissions while the poorest 50% is account for just 1/10. Indeed, overcoming climate change need mighty force, but some must pay more than others.
Recently a handful of rich countries pledged to reduce the emission of greenhouse gases by so and so % or to become fully climate neutral by this or that date, and nothing has been achieved in the past four years since the accord came into power. The G20 countries are accountable for climate change, and they must take serious action to mitigate or at least lessen the impacts of natural calamities. Instead of signing agreements to satisfy the world, a gravity in their accords is utmost besides with their substantial contribution and thoughtfulness; the global emission may perhaps remain below 1.5%, every friction in the degree matter and even a 1% rise in the global average temperature is detrimental to the ecosystem.
It is now the right time to think and act, spread awareness among people, take deliberate actions, discrete climate changes from politics, and ultimately stop the burning of fossil fuel and re-make this world a green-clean place for living. If we fail to overcome climate change, the world must prepare for long-term everlasting disasters; immense heat-waves, the rise of sea level, acidification of seawater, pure water scarcity, pandemic diseases, wildfire, the extinction of vital species as well as the disruption in food cycle which will, directly and indirectly, disturb the living life.
A World in Distress
World mean temperature is up 1.1C since the industrial revolution. Climate experts believe we have 12 years before it rises enough to set up a self-reinforcing cycle, meaning trouble. All the same, Trump and Brazil’s Bolsonaro remain in denial when climate scientists have already shown human agency and the facts are measurable.
Australia’s mean temperature is up 1.5C since 1910. It has had prolonged severe drought causing vegetation to lose moisture and become fuel for a fire lit accidentally by lightning or careless human activity. The bush fires raging in New South Wales are one result. Thousands of homes have been lost despite the valiant efforts of overstretched firefighters, and some have even made the ultimate sacrifice.
The air is difficult to breathe even in the neighboring state of Victoria where the Australian Tennis Open is being held in Melbourne. Players affected have been forced to withdraw.
Human agency and the effects of key gas emissions have been proven by scientists and the longer nothing is done, the more difficult, even drastic, the solution. The UN Panel on Climate Change offered a prescription in 2018 to keep temperature rise in the future below danger levels. But implementation is another problem altogether stymied by the rich and powerful nations.
The Panel’s COP25 talks in Madrid last month ended more or less in failure though that word is seldom used. Major fossil fuel producers, principally Saudi Arabia and the US, managed to thwart the rest of the world. In the final agreement, all countries are required merely to decide their pledges for COP25 in Glasgow this November. They do actually nothing to abate climate change.
Ironically, Australia with its right-wing government was a key supporter of the US, and Scott Morrison the prime minister is possibly the least welcome man in New South Wales, one community telling him point blank he was not wanted when he tried to visit. And the uncontrollable bush fires keep burning, continually exhausting firefighters in their efforts to abate them.
So where do we stand before the Glasgow COP26 meeting in November? Current policies will lead to an estimated 3C rise above preindustrial levels. As a point of reference, we are currently at 1.1C above and 1.5C begins troublesome coastal flooding. Current pledges will give us a 2.5 – 2.8C rise, still far from necessary for a comfortable livable planet.
Firm action is required, and thus the push for more ambitious pledges before COP26. World leaders have also been invited to Kunming in China for a major conference on safeguarding nature as more and more species become extinct. A month before COP26 it should reinforce the importance of reducing global warming.
The task ahead is clear. The earth needs a halving of emissions from vehicles, power stations, industry and agriculture; instead, CO2 levels are still rising. We can only hope the working groups meeting in preparation can push through what is necessary for success at the Fall conference.
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