MADRID, 15 December - Today in Madrid, nations failed to agree a set of rules governing international emissions markets after 2020.
“This is a huge disappointment,” said Dirk Forrister, CEO of IETA. “The fact is that countries’ ability to deliver stronger targets in line with net zero goals will depend on having access to international market cooperation.”
After more than two weeks of talks to flesh out market rules under Article 6 of the Paris Agreement, Parties (countries) could not reach consensus on how to treat emissions reductions that were created under the Kyoto Protocol, the predecessor to the Paris treaty, nor could they agree on accounting rules to track the flow of emissions reductions between Parties in future markets.
“Studies show that robust international markets can save $320 billion per year by 2030 compared with a scenario in which nations work independently,” Forrister added. “These savings could double the amount of reductions at the same cost.”
“It will be more difficult for Countries to commit to stronger targets without having confidence that the economic fundamentals are secure – and that market cooperation will enable achievement.”
The collapse of the Article 6 talks in Madrid means that the task of piloting the new markets that were set out in the Paris Agreement falls to individual nations.
“The failure in Madrid won’t stop countries from cooperating on building the high integrity markets of the future,” Forrister said. “Since the UN climate process has stalled, the opportunity will move to bilateral and regional markets, where pilot systems are already in formation.”
“These bilateral and regional markets can help inform the process for Glasgow next year, and we urge the incoming UK COP Presidency to make Article 6 its top priority.”