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LONDON, 19 November – The rulebook for market mechanisms in the Paris Agreement progressed slowly over the two-week UN climate talks in Bonn, ending with a mandate for a draft negotiating text to be ready by March.
The Paris Agreement’s market provisions appear in its Article 6. It establishes an accounting framework for international trading and an emissions mitigation mechanism, drawing from the experience with the Kyoto Protocol crediting mechanisms.
The Bonn talks focused on draft headers and the key policy elements needed for making the provisions operational. The constructive talks ended in a rocky finish, when countries gave a mandate to the chair of the Subsidiary Body overseeing Article 6 to prepare a draft negotiating text ahead of the next meeting in April. This text will draw on three informal notes prepared over the course of the talks.
While IETA had called for a draft negotiating text to emerge at Bonn, the work done over the two weeks made substantial progress in laying the foundations for the next steps. Governments also finalised the format and process for the first Facilitative Dialogue, now renamed the Talanoa Dialogue, which will assess progress on cutting emissions and future trajectories. The Fijian President of COP 23 offered the name “Talanoa” to describe the process, using the Fijian word for frank and open dialogue.
“We are starting to get a clearer picture of how governments envisage Article 6 operating, although there are a number of thorny issues to resolve. We also need more clarity on how countries will use it in their national policies,” says Dirk Forrister, President and CEO of IETA. “Over the coming months, we urge governments to accelerate their efforts so that business can start investing and driving forward the low-carbon transition.”
“As the Talanoa Dialogues progress, governments will consider how and when to strengthen their Nationally Determined Contributions to achieve the Paris goals, so it will be essential for them to understand how the market flexibilities in Article 6 will work to enable greater ambition.” he adds. “A well functioning international market can tap the power of the private sector to invest at scale and deliver emissions cuts at low cost. That’s why it is key to unlocking more ambition.”