Day 3: 9 November 2022
Greetings from IETA’s #COP27BizHub at Sharm El-Sheikh.
We’re beginning to see a trend emerging. There’s a lot of interest in how the private sector can engage in the race to net zero, and some participants talk about a sense of convergence as voluntary initiatives are all pointing towards science-based targets and putting decarbonisation before offsetting, and Article 6 negotiations are progressing, albeit slowly.
(And while the WiFi in many parts of the Blue Zone is unstable, the barista-tended coffee at the nearby Australian pavilion is top-notch.)
Wednesday was billed as Finance Day at COP27, and although there were no major pledges on funding or filling up the Green Climate Fund, the UK had already announced that it will treble climate finance for adaptation to £1.5 billion by 2025. But we did not hear of any other major nations pledging new money.
Instead, we saw the launch of an initiative to reduce the cost of green and sustainable borrowing for climate-vulnerable countries. The initiative will establish a sustainability sovereign debt hub to facilitate debt issuances that are aligned with climate targets; capacity building to enable more countries to access green and sustainable bond markets; and encourage multilateral development banks to offer more guarantees for external debt and ODA, or facilitate debt cancellation.
Major emitters are meanwhile readying a pledge to cut methane emissions by 30% by the end of this decade, and there’ll be more on that tomorrow.
In the wake of yesterday’s publication of reports from the High Level Expert Group and the new African Carbon Market Initiative, today US climate envoy John Kerry formally unveiled the Energy Transition Accelerator, a partnership with the Rockefeller Foundation and the Bezos Earth Fund to help support the energy transition in developing countries, flowing funding in exchange for carbon offsets.
Details are a bit thin so far, but Kerry said the plan will be fleshed out and presented at next year’s COP. According to the US release, the ETA “will produce verified greenhouse gas emission reductions, which participating jurisdictions will have the option of issuing as marketable carbon credits.”
Reaction to the proposal has been mixed. For our part we think it’s probably too early to judge the ETA – there are too few details. Of course, any initiative that encourages the private sector to take on science-based decarbonisation targets is good news, but we’d like to understand more about how offsets created in this system would interact with the VCM and Article 6, for example.
Elsewhere, IOSCO, the international organisation of securities regulators, has launched a 90-day consultation on “recommendations for establishing sound compliance carbon markets and on key considerations for enhancing the resilience and integrity of voluntary carbon markets”. It is calling for submissions by 10 February on how to ensure fair and functional markets, and how to ensure the markets achieve their environmental objectives. IETA will be preparing a response to this consultation, so watch this space for more information in the coming weeks.
Nitty gritty of the negotiations
In the meeting rooms, negotiations on Article 6.2 resumed in the morning, focusing on procedures relating to the authorisation of emissions reductions.
It was a robust discussion, especially regarding changes to, and revocation of, authorisation for the issuance of ITMOs (options for which are set out on page 9 of the draft decision).
There appear to be five competing positions:
- India, Brazil and AOSIS say that changes to or revocation of initial authorisation should be possible; it’s a national prerogative.
- The UK, Singapore and Indonesia say there should be no changes, or at most limited changes.
- The African Group believes that changes in use (i.e. between achieving an NDC or being transferred to CORSIA) should be allowed, but there should be no revocation of authorisation.
- The EU and Canada say that decisions on changes to authorisation should be discussed in a work programme during 2023.
- Finally, the US, Thailand, Japan, New Zealand and the Least-Developed Countries say such matters are beyond the mandate, and that the CMA should not provide further guidance.
Informal consultations on Article 6.4 also took place in the afternoon, and the co-facilitators will publish a new draft text tonight or early tomorrow based on the SBSTA chair’s proposal and comments made by Parties this week.
The new text will lift brackets and remove options where possible, and will improve drafting where requested by Parties. The next meeting is tomorrow at 1500-1700 hrs.
IETA COP27 Business Hub news
IETA’s Business Hub is located in Area C, Zone 5, Pavilion 123 – our neighbouring pavilions at this year’s event are the International Chamber of Commerce, the GEF, the Coalition of Rainforest Nations and the Republic of Guinea.
There’s a lot to participate in every day! Remember that some of our side events will be webcast, and you can join by finding the relevant QR code in the Business Hub programme.
Thursday’s programme at the #COP27BizHub kicks off at 0800 hrs with an overview of US voluntary carbon markets and the leading project types supplying offsets. The session, sponsored by IETA members Anew, will also look at supply and demand trends. Speakers include John McDougal of Anew, Mary Grady of the American Carbon Registry, Brennan Spellacy from Patch and Richard Saines of Pollination.
At 0900 hrs, Kate Abnett of Reuters is moderating a debate on “Are carbon credits necessary to achieve net zero?”. Discussants include our former international policy director Stefano De Clara, now with the International Carbon Action Partnership, Maggie Comstock of Pollination, Gilles Dufrasne from Carbon Market Watch and Carsten Warnecke of the New Climate Institute.
At 1030 hrs, IETA members Patch will host a deep-dive looking at how corporates can build and execute a robust net zero strategy. Rachel Kyte from the VCMI, SBTI CEO Luiz Alvarez, Abyd Karmali of Bank of America and Patch CEO Brennan Spellacy will share insights and experiences on how to make commitments more efficient and impactful.
VNV Advisory takes over the Hub at 1200 hrs to explore the social sciences behind land-use removal projects including mangrove restoration, agroforestry, marine ecosystems and high-altitude projects.
At 1330 hrs, Verra will host a discussion of the various opportunities presented by the VCM, Article 6, CORSIA and domestic markets, as well as by voluntary corporate emissions abatement targets. This wide-ranging session will look at the opportunities from the perspective of investors, project participants, crediting programmes and auditors. Visit the IETA programme online to participate virtually in this event.
At 1500 hrs Resources for the Future will examine how we can advance climate ambition during an energy crisis: how can countries balance and advance goals for decarbonisation, energy prices and sources, as well as the future security and transition of energy systems?
IETA members Sweep will join us at 1630 hrs to discuss how data driven technology can help achieve reduction targets. Speakers from HP, Accor, 3 degrees, SBTI and Winrock will participate in this hybrid session.
The final session of the day at 1800 hrs will see Switzerland’s KliK Foundation assemble a panel of experts in project development to discuss the country’s pioneering development of Article 6.2 programmes. This session will also be available for virtual participants to attend.
We’d like to thank all our main partners, supporting partners and sponsors who are making IETA’s programme at COP27 possible. Your help and participation is appreciated!