UN climate talks sputter on carbon market disputes

Connecting the world’s new carbon emissions trading schemes remains a priority for countries struggling to meet their Paris Agreement targets.

MADRID — U.N. climate change talks enter the final week here on Monday as senior national officials arrive to try to hammer out rules to link the nascent carbon markets that are deemed critical to reaching the targets under the Paris Agreement.

So far, a deal to craft an international trading market to help reduce the carbon pollution driving up temperatures has proven elusive to the legions of largely technical experts gathered at the COP25 conference in the Spanish capital since last week.

Negotiators acknowledged that translating world leaders’ lofty promises to protect the climate into an actionable set of rules by the end of the conference on Friday will be a daunting task.

“Whenever you come here, you reach for the moon, and in the end of the day you reach the fence,” said Tosi Mpanu-Mpanu, a negotiator from the Democratic Republic of Congo.

The outstanding issues on the table are some of the most politically challenging elements of the Paris climate accord left over from last year’s conference in Poland. In addition to establishing the rules for international carbon trading, they include hiking the funding that rich nations provide to help developing countries adapt to the changing climate and rising seas and setting out a common schedule for nations to update their greenhouse gas goals.

Negotiators are still far from reaching a deal, as evidenced by several delays in delivering a clear set of proposals to govern carbon trading — a hurdle that has prompted some countries, such as South Africa and India, to harden their positions and call for even more aggressive action.

“They’re trying to escalate here, which is not the best sign,” said Brad Schallert, deputy director of international climate cooperation for the World Wildlife Fund.

Environmental, foreign and finance ministers from many countries are joining the second week of talks to apply political pressure, hoping to break stalemates. They won’t be joined by top U.S. officials, however, who have skipped the meeting after President Donald Trump started the one-year countdown in November to pull the world’s second-largest polluter out of the pact negotiated by his predecessor, former President Barack Obama.

Most heads of state are sitting out the Madrid talks, since this year’s conference is viewed as building out the technical rules in the agreement, in contrast with next year’s COP26 talks in Glasgow where countries are expected to update their national climate plans.

As expected, the most fraught discussions are over designing the rules that would underpin trading carbon emissions and offsets across borders. Negotiators want to set rules to ensure the system that allows polluters to buy credits from countries and projects that cut emissions will result in actual emissions reductions that wouldn’t otherwise have happened.

Brazil — which under President Jair Bolsonaro has backed away from climate action — is taking a hard-line stance by insisting any emissions reductions, from its massive forests or other projects, can be used both for its own Paris targets, as well as by the countries that pay it. Opponents say that amounts to “double counting” that will undermine the emissions trading system, and few believe the country’s position is tenable since it so far has attracted no major allies.

The EU has “zero willingness to compromise on double counting,” an EU negotiator said.

Brazil also wants to transfer old credits created through the 1997 Kyoto Protocol to the new Paris system, even though those credits were largely ineffective at reducing emissions. That stance has support from India and Saudi Arabia, observers said. China, the world’s largest greenhouse gas emitter, has been somewhat quiet in public, but holds many of those older credits.

Veterans of the climate talks suggested Brazil’s position may be little more than saber rattling in an effort to secure a generous transition of old credits to the Paris system. But reviving those credits would “water down” the Paris Agreement by allowing potentially billions of tons worth of questionable emissions credits to satisfy national emissions goals, said Kelley Kizzier, associate vice president of international climate with the Environmental Defense Fund.

“It doesn’t make any sense,” Kizzier said of Brazil’s posture. “It’s a major reason why countries would walk away from a deal here.”

Climate finance fight

Little progress has been made in overcoming one of the biggest hurdles in the talks: increasing the financial support that rich, industrialized nations send to poorer countries to help them develop clean energy and adapt to more ferocious storms or devastating droughts. Developing countries, especially African nations, small island states and Latin American states, are leading an effort to implement a levy on carbon emissions trading between countries. So far, wealthy countries have resisted that type of fee, which they say was not included in the Paris Agreement.

Countries are also haggling over the percentage of funding from carbon offset projects that will be diverted into the adaptation fund, which was part of the original Paris deal. South Africa has suggested 6 percent, WWF’s Schallert said, which would go beyond previously discussed limits.

Chile, which is hosting the conference that was moved from Santiago only weeks ago, has also pressed for countries to propose steeper emissions cuts than they pledged in 2015 in Paris. Even if those previous targets are met, the world will fall short of the greenhouse gas reductions needed to keep global temperatures rising above the 2-degree target that was agreed in Paris that scientists say is critical in heading off the worst effect of climate change.

“We will try to make as many countries commit to update their [national plans],” COP President Carolina Schmidt, the Chilean environment minister, said last week. She is backed by the least-developed and vulnerable island nations, which are seeking a clear signal countries are serious about their efforts.

But after the first week of talks, that effort is not going well.

Officials from Brazil and India pushed back on Schmidt’s call to increase their targets at a Wednesday meeting, said Shuo Li, a senior global policy adviser with Greenpeace China. Instead, they pressed for negotiators in Madrid to focus on implementing the Paris Agreement rather than trying to increase their emission reduction goals so soon.

But increasing that climate ambition is critical issue for small island states, since many may become uninhabitable if cuts in greenhouse gas emissions aren’t far deeper than what the industrialized countries promised in Paris.

“This is supposed to be the ‘ambition COP.’ We cannot wait another year for ambitious climate action. It must start now,” said Lois M. Young of Belize, who heads a negotiating bloc made up of small island states.

Some developing nations, such as India and others in the group countries that includes Bangladesh, Vietnam, Saudi Arabia and Egypt, have suggested setting up a monitoring regime to evaluate whether developed nations met the marks they set before 2020, said Elliot Diringer, executive vice president with the Center for Climate and Energy Solutions, underscoring a long-simmering distrust between the developed and developing worlds.

Aligning climate plans

Talks on trying to get countries’ national plans to cover the same time spans continues to run into resistance, with some negotiators blaming the European Union. Though it appears to be a technical matter, aligning the timing of nations’ emissions pledges under the Paris Agreement would make it easier to compare and speed up emission reductions.

EU regulation, for instance, runs on a 10-year cycle — something climate campaigners are keen to trim to five years. Brussels has balked at that, concerned that changes clash with the EU’s long-winded political process that typically takes years to get legislation past European lawmakers and EU member states.

Under the Paris Agreement, countries have some years still to work out those rules in detail. But country blocs such as the Africa Group won’t let up. Congo’s Mpanu-Mpanu said Saturday that the countries backed a five-year cycle.

“If you allow for 10-year cycles, you lock in weak ambition,” he said. ”It is important for us to come every five years and actually review, reassess where we are at.”

Loss and Damage

Another thorny issue that politicians will have to grapple with this week is how to support developing countries devastated by hurricanes, floods and other climate-related shocks, called “loss and damage” in climate negotiators’ lingo.

Vulnerable countries say they want a mechanism to help guarantee financial support, something wealthy nations have traditionally resisted. But negotiations in recent days suggest there may be signs that decades-old resistance from wealthier nations to consider the issue is thawing, as the worsening effects of climate change raise pressure on countries to reach a compromise.

But that doesn’t mean that vulnerable countries are close to getting what they are asking for. The struggle over the next few days will be to get wealthy nations to give up their long-held opposition to the loss and damage issues that were first put on the agenda in 1991 by Vanuatu, a nation of islands in the South Pacific.

“For the last six years developing countries have not seen progress on loss and damage finance,” said Harjeet Singh, advocacy group Action Aid’s global lead on climate change, who is involved in the negotiations.

Singh said Australia, the U.S., Canada and Japan in particular are “blocking” the loss and damage effort, and called on the EU to “break the deadlock and actually start engaging with these proposals.”

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