As usually happens in the second week of a COP, most of the action is going on behind closed doors, and the negotiating rooms are no longer open to observers. So we have had limited opportunity to get first-hand accounts of what’s happening.
Parties are discussing the “cover” decisions, the high-level political section of the COP text that will try to capture some of the major announcements and initiatives made by leaders during the first week.
One of the most interesting elements of this cover text is item 37, that “calls upon Parties to accelerate the phasing-out of coal and subsidies for fossil fuels”, something that has never appeared in a COP decision. It’ll be worth watching to see whether this specific item remains in the text, or which Party or Parties try to have it removed!
So far this text doesn’t contain any references to Article 6 apart from a placeholder (item 70) which will probably only be filled once a decision on markets is reached.
This is the stage where senior negotiators are working more pragmatically, and this is usually a good sign. We have managed to meet Article 6 negotiators when they're not in the room, and what we hear is very positive.
We are at the point in the talks where each delegation seems to be getting ready to accept something they don't really like, in the spirit of getting a final text agreed by the end of the week.
We’re told delegations are offering constructive bridging proposals and holding bilateral meetings to try to close the gaps between positions.
However, on the big three issues – corresponding adjustments in Article 6.2, Share of Proceeds in Article 6.2, and the carryover of Kyoto credits – Parties are not yet reaching agreement.
There were new versions of the draft Article 6 decisions published early this morning, which we shared with you by email. They weren’t very different from what we saw last week, though the number of brackets has been reduced, and there are still substantial sections of text that are not agreed.
We understand that negotiators are discussing a number of bridging proposals, which we haven’t seen, but we expect to see another iteration of the texts tomorrow morning which may incorporate these new elements.
We’ve been hearing speculation about various elements that might be in a final text. One of these deals with the relationship between the voluntary carbon market (VCM) and the mechanisms established under Article 6.
One such rumour involves whether corresponding adjustments may be required for voluntary market transactions. Our view is that the Article 6 discussions have never implied that the VCM should be brought under the umbrella of the Paris mechanisms.
There has also been discussion over whether corresponding adjustments might be required for reductions made from projects that fall outside the scope of a country’s NDC. Several Parties have for a long time rejected the idea that they should have to make adjustments for such transactions, but we now hear that they are prepared to be flexible on this.
Some of the same countries that are against having to make corresponding adjustments are the same countries that want a large carryover of Kyoto credits, so it’s clear that they will need to compromise. We have heard proposals for “transitional arrangements” for corresponding adjustments and for specific limitations on how many Kyoto units can be brought into the Paris system.
We will notify you of any new texts as soon as they become available.
Late in the day, the United States and China issued a Joint Statement on Enhancing Climate Action in the 2020s, in which they pledged to cooperate on a range of areas related to decarbonisation.
The two countries also pledged to “work cooperatively to complete at COP26 the implementing arrangements (“rulebook”) for Articles 6 and 13 of the Paris Agreement, as well as common time frames for NDCs.” Both also committed to communicate their 2035 NDCs in 2025.
Wednesday at the IETA Business Hub
Our opening event on Wednesday was hosted by the Arbor Day Foundation, discussing how to go beyond carbon neutrality and how nature-based solutions, specifically trees and forests, put us on a path to net-zero and carbon negative outcomes. The event can be reviewed here; use the passcode: v+%dU0y7.
IETA hosted a very popular “Americas Deep Dive” looking at sub-national efforts as well as the prospects for federal action in the US, as well as developments across North American and Latin American voluntary markets. Technical issues mean we can’t bring you a link immediately, but we will add it once it’s available.
IETA CEO Dirk Forrister sat down with Peter Liese, the European Parliament’s rapporteur for the EU’s “Fit For 55” package, to discuss EU climate ambition and reforms to the EU ETS. You can view the conversation here.
Germany’s environment ministry (BMU) held a virtual discussion on “Challenges and Opportunities for the Voluntary Carbon Market”, with both buyer and seller perspectives. And in the final event on Wednesday, Xpansiv presented a session on “Scaling the Voluntary Market: The Emergence of Standardised Contracts”.
Thursday at the IETA Business Hub
Our first event on Thursday begins at 1100 GMT, when Natural Capital Partners and Verra will discuss how host countries can benefit from engaging with the voluntary carbon market. Virtual participants can join here.
At 1200 GMT, CTX/Global Environmental Markets will announce new formal agreements signed with the governments of Iceland, Nigeria, Democratic Republic of Congo, Philippines and South Africa to establish national registries that would link to the eventual Article 6.2 system. You’ll be able to watch this event here.
At 1330 GMT IETA will present a session on natural climate solutions, looking at how these exciting technologies have evolved and what their prospects are. We will stream the event on Zoom here.
YC Holdings will take over at 1500 GMT to host an event entitled "Carbon Pricing and CBAM: Perspectives from Asia”.
The final event of the day takes place at 1630 GMT; AirCarbon Exchange will host a panel discussion on DEFI and blockchain, and how they can accelerate the transition to net zero. Virtual participants may register for this event here.