Carbon Markets Can Provide a Crucial Part of the Solution to the Climate Crisis

Fenella Aouane, Principal Green Finance
Specialist, Investment and Policy Solutions Division, Global Green
Growth Institute (GGGI)

By Fenella Aouane
SEOUL, South Korea, Dec 18 2019 (IPS)

One of the main discussions at the COP25 climate change talks
was
Article 6
, which is designed to provide financial support to
emerging economies and developing countries to help them reduce
emissions by using global carbon markets. Carbon pricing is an
essential piece of the puzzle to curb emissions. Without a value on
carbon, there is less incentive to make positive changes,
especially in the private sector. The most efficient way to carry
this forward is to allow trading of carbon both nationally and
internationally, which will ensure the lowest cost of mitigation
for participants globally.

Fenella Aouane

The COP25 negotiations in Madrid have largely been dominated by
Article 6 negotiations on potential carbon markets as they are
perceived by many, including businesses, as a way to generate
financial flows to emerging economies and developing countries, and
to reduce emissions at the lowest possible cost. Thus, it’s
crucial to adopt decisions on Article 6 as rules need to be set to
show how such markets will operate – this is the guidance the
Article 6 rulebook will create. The sooner the better, overall
mitigation in global emissions (OMGE) will be possible under the
Paris Agreement through international carbon trading with aspects
such as corresponding adjustments, which were lacking under the
Kyoto Protocol. Carbon markets are a way to not only manage

mitigation emissions cuts
, but help to find the lowest cost and
therefore a strong motivator for implementing international
efforts.

The Global Green Growth
Institute
(GGGI), a Seoul-based treaty-based international,
inter-governmental organization that supports emerging economies
and developing country governments transition to a model of
economic growth that is environmentally sustainable and socially
inclusive, is already involved in several programs, funded by
developed country governments such as Norway and Sweden. GGGI is
working with the Norwegian Ministry of Climate and Environment on
wider policy approaches, which have been made possible under
Article 6 of the Paris Agreement through cooperative approaches.
This program looks at helping its member and partner governments to
identify areas above their Nationally Determined Contribution (NDC)
targets, where emissions reductions directly resulting from policy
interventions are quantified and transacted. This creates a flow of
carbon finance, in exchange for the transfer of the resultant
internationally transferred mitigation outcomes (ITMOs). These
programs will not only create ITMO transactions but also set up the
lasting infrastructure needed for countries to be able to govern
and properly account for future transfers, ensuring environmental
integrity and transparency.

GGGI has a key role to play. A further good example is
GGGI’s recent collaboration with the Swedish Energy Agency

(SEA). The two organizations will work together to catalyze
international trading of mitigation outcomes in support of the
increased climate ambitions needed under the Paris Agreement.
Through a joint cooperation, SEA and GGGI will identify and
structure mitigation activities and support the establishment of
governance frameworks within host countries as required under the
developing rulebook of Article 6 of the Paris Agreement, with the
goal of completing ITMO transactions.

Although specific rules related to cooperative approaches under
Article 6 have yet to be codified, Article 6 aims at supporting the
authorization of international emissions trades while avoiding
double counting and ensuring environmental integrity, permitting
the movement of the related emission reductions between registries,
and better linking national emission trading schemes, project-level
transactions, and cooperative approaches.

What next? Carbon markets can and should be seen as an
opportunity to lower the cost of cutting greenhouse gas emissions
and enabling countries to commit to more ambitious targets. At next
year’s Glasgow climate change conference, countries need to come
forward with more ambitious Nationally Determined Contributions.
GGGI’s work on pioneering designs for international carbon
transactions over 2020 will help shape how the carbon markets can
contribute to this increased ambition. It has also made the 2020
NDCs a priority in
support of its Members
and will ensure that there is strong
support to deliver this next year. We need to come to Glasgow with
concrete plans and steps. However, tackling climate change cannot
be solved by one government alone. There needs to be high-level
political commitment and collective action – these are a
must.

The post
Carbon Markets Can Provide a Crucial Part of the Solution to the
Climate Crisis
appeared first on Inter Press Service.

Excerpt:

Fenella Aouane, Principal Green Finance
Specialist, Investment and Policy Solutions Division, Global Green
Growth Institute (GGGI)

The post
Carbon Markets Can Provide a Crucial Part of the Solution to the
Climate Crisis
appeared first on Inter Press Service.

Source: FS – All – Ecology – News
Carbon Markets Can Provide a Crucial Part of the Solution to the Climate Crisis