Climate of ambition delivers Glasgow kiss to countries over Article 6

Felix von Geyer – Glasgow

Article 6.4 of the Paris Agreement may now be left to the Voluntary Carbon Markets, it was rumoured last night (Tuesday), in the absence of countries finding further agreement at the Glasgow climate talks.

On a day when UK COP President Alok Sharma told journalists the “world wants ambition” at the UN Climate Conference COP26 in Glasgow, this surprising twist of events tantamount to a proverbial head-butt, known famously as a Glasgow kiss, was later confirmed to by parties from Brazil and Kenya.

Article 6.4 is meant to see the creation of a central United Nations mechanism to allow countries to embrace and link carbon markets as part of their mitigation targets under their Nationally Determined Commitments.

The creation of projects such as clean energy projects where countries could offset their national emissions by creating clean projects that would not otherwise have occurred.

The move would leapfrog arguments over the issue of double counting or “corresponding adjustments” between nations seeking to trade carbon credits. Effectively these will be notched up by the private sector under corporate accounting and not contribute to countries’ NDCs

Furthermore, leaving Article 6.4 would eliminate the issue of carry-over of credits and projects from the Joint Implementation and Clean Development Mechanisms of the Kyoto Protocol era, notably Brazil, Australia and China, the issue that stalled the last round of climate talks at COP 25 in Madrid.

But the issue of Carbon Border Adjustment Mechanisms (CBAMs) – effectively a cross-border tax for countries with no carbon pricing or carbon market mechanisms – has been a major issue circulating UN talks.

Permissible under World Trade Organization rules, a CBAM would be enforced upon countries such as the US, Australia, and Brazil. While the US has regional carbon markets like the California-led Western Climate Initiative and New England’s Regional Greenhouse Gas Initiative, it would be for the United States at federal level to implement a carbon pricing initiative as the US government is a WTO member, not individual states.

The disparity of carbon pricing between Canadian provinces might also require CBAMs on Canadian exports as well.

In a press conference on Tuesday, House speaker Nancy Pelosi avoided questions from that would have asked whether the Biden Administration would in fact push a carbon tax or price through Congress, thus averting any potential CBAM.

Observers and negotiators were unsure if a voluntary approach could ‘land’ in Article 6.4. 

Today, (Wednesday) the UK COP Presidency is expected to release its negotiating paper for the Ministerial High-Level Summit that COP President Sharma told a press conference may require them to confer with their governments back home.

Asked by if this meant there would be extra ambition in the paper requiring negotiators to refer to their leaders for a negotiating mandate, Sharma was passionate about the need for ambition before the COP, during the world leaders’ summit and around. “The world wants ambition” he concluded.