COP28 update: Day 6, 5 December

Tuesday was Energy Day at COP, and while the adrenaline surge of the High Level segment of the talks has had time to drain out of the system, the regular drumbeat of news and developments has kept everyone on their toes better than those depressingly small americanos being served at the various coffee huts. What’s the Arabic for “venti”?

The day started off with a bang: the COP Presidency published overnight a draft text covering the Global Stocktake and, lo and behold, it refers to a fossil fuel phase-out. Paragraph 35 of the document sets out a variety of possible options regarding increasing renewable energy, accelerating the deployment of electric vehicles and phasing out fossil fuels and coal power.

Unsurprisingly, one of the options is “no text” referring to a phase-out, which suggests that there is still stiff resistance from, among others, Saudi Arabia to any reference to reducing the use of oil and gas.

And there’s still a question over what exactly “unabated” means, observers point out; there’s no agreed definition.

The document also invites Parties “to consider further actions to reduce by 2030 non-carbon dioxide greenhouse gas emissions, including by reducing methane emissions globally by at least 30% by 2030 and 40% by 2035; again, “no text” is an option here. There was also some surprise and sadness that agriculture and nature did not receive more prominent treatment in the text.

Parties are also requested to improve their 2030 NDC targets and submit them by the end of 2024.

Paragraph 30 of the text references Article 6 briefly in terms of “accelerated implementation”, but with the discussions continuing under SBSTA there is little more that can be said in the GST text.

“Informal informal” consultations were taking place in the evening, with the aim of closing the first part of the GST talks by Wednesday afternoon before sending the text up to ministers. Suggestions for improving the text were in some cases very detailed, and it looked as though the session would go late into the night. We also note that the Holy See, as a full Party to these talks, played a role in the discussions.

The GST discussions are also being significantly impacted by what are being referred to as “unilateral trade measures”. That’s code for carbon tariffs, and at its heart is the EU’s Carbon Border Adjustment Mechanism. Smaller nations have raised complaints in the last few days that while the EU may say that CBAM is WTO-compliant, it is likely to hit them hard.

“The small amount of exports from Caribbean countries to the European Union is so minuscule that it cannot, on one hand, either distort trade, or on the other hand, fundamentally come close to the scale of global pollution and contamination of our environment that has been practiced by large powers such as China and the United States of America and India,” Kerrie Symmonds, minister of foreign affairs and foreign trade of Barbados, was quoted as saying yesterday.

“We spent many years negotiating at the WTO level for a simple thing called special and differential treatment,” Symonds added. WTO rules allow for some exemptions and allowances for developing and least developed countries.

But while the GST text was being refined and discontent was still rumbling, there was still plenty to cheer in the news coming out of Dubai today.

For example, Climate Impact X revealed plans to launch a new set of standard tradable contracts aligned with the ICVCM’s Core Carbon Principles. The exchange expects the first physical spot contract comprising CCP-labelled carbon credits will happen next year.

The Monetary Authority of Singapore yesterday launched its Transition Credits Coalition, which will develop solutions to advance the early retirement of coal-fired power plants in Asia through the use of  high-integrity carbon credits.

According to the announcement, in order to be considered high quality, credits will need to reflect the ICVCM’s Core Carbon Principles, as well as UNFCCC principles.

And while everything else appears to focus on Paris, Article 6 and the GST, over in a small dusty corner of the COP there are people working to keep the ageing Clean Development Mechanism ticking over until the Article 6 institutions are in a position to take over.

CMP Agenda item 5 – matters relating to the clean development mechanism – has a draft text that appears to envision the end of the CDM. For example, proposed decision text refers to “maintaining” registry operations, the Accreditation Panel and the Methodology Panel until either 2024, 2025 or even 2026.

Negotiations

Discussions in the SBSTA informal consultations on Article 6.2 and Article 6.4 continued today, covering the draft texts (6.2, 6.4) that were updated earlier this week.

Negotiators had six hours of consultations to go through all the comments to the texts published on 2 December. Common nomenclatures, the Agreed Electronic Format (AEF) and tables for reporting under Article 6.2 were discussed late into the evening, followed by resumed Article 6.4 discussions on authorisation, the mechanism registry, and other matters, including “emission avoidance” and “conservation enhancement”.

The co-facilitators of both items stressed that time for informal consultations is running out, with negotiations to be concluded before 1300 hrs tomorrow prior to the close of SBSTA. A new version of the texts will be produced overnight, and we expect it will be a challenge to find consensus on many of the outstanding issues, options and brackets that are still in the text.

Parties also started in a contact group to discuss the Article 6.4 Supervisory Body’s recommendations on on methodologies and removals, which is part of next week’s CMA agenda. The EU immediately expressed its dissatisfaction with the removals piece, which to some extent seems to be shared by other Parties. In turn, Saudi Arabia, speaking on behalf of the Like-Minded Developing Countries group, spoke up against the paragraph in the methodologies recommendation mandating downward adjustments of baselines.

Some Parties in the CMA contact group have expressed a desire to reopen the SB’s recommendations on 6.4 methodologies, including – as we’ve already reported – the EU. And we also hear that the AILAC and the AOSIS groups are concerned that the removals text does not reference human rights strongly enough.

At today’s session, our observers heard that patience is beginning to run short. One delegate from the LDC group told the meeting: “We could not deliver last year, and despite several meetings this year, we seem to be reopening everything now. This is a compromise text; not everyone can be happy. But not having a decision text at this time will have implications on the process and operationalisation of the 6.4 mechanism.”

Coming up on Wednesday at IETA’s COP28 Business Hub

IETA’s COP28 side event programme resumes on Wednesday. Many of the events hosted at the IETA Business Hub will be webcast – just click on the link by each event to participate! All event times are listed in Gulf Standard Time, which is three hours ahead of Central European and two hours behind Singapore time.

0830-1000: Seagrass Breakfast & Report Launch: Opportunities Through Article 6 to Scale Support Grid Infrastructure (in the IETA Business Hub Lounge), with Naveed Tariq (Seagrass), Perumal Arumugam (UNFCCC) and Ely Sandler (Harvard Kennedy School). This event will not be webcast.

0900-1000: Fair Sharing of Mitigation Outcomes: How to Ensure Host Country Benefits While Maintaining Investor Attractiveness of Market-Based Activities, with Christof Arens (Wuppertal Institute), Isaac Rubayiza (Eastern Africa Alliance on Carbon Markets and Climate Finance), Ousmane Fall Sarr (West African Alliance for Carbon Markets and Climate Finance ), Dietrich Brockhagen (atmosfair) and Malin Ahlberg (Germany). Event webcast.

1100-1200: Alberta’s Trailblazing Journey in Emissions Reduction, Clean Tech Innovation, and Sustainable Prosperity, with Justin Riemer (Emissions Reduction Alberta), Laura Kilcrease (Alberta Innovates), Rebecca Schulz (Alberta), Mark Poweska (ENMAX), Rhona DelFrari (Cenovus Energy), Heather Chalmers (GE Canada) and Tamara Loiselle (Synergraze). Event webcast.

1200-1245: Financing Opportunities for CCS Climate Technology, with Guloren Turan (Global CCS Institute), Alex Milward (UK), Maris Densmore (Winrock International) and Zoe Knight (Centre of Sustainable Finance and Head of Climate Change). Event webcast.

1245-1330: Scaling up CCS in Emerging Economies, with Ellina Levina (Global CCS Institute) and invited speakers. Event webcast.

1330-1500: Joint Statement and Crediting Standards Collaboration Showcase, with Katie Sullivan (IETA), Mohamed Ben Salem (COP28 Presidency) and invited speakers. Event webcast.

1500-1630: SABA and the Launch of the SAF Certificate Registry, with Kim Carnahan (Sustainable Aviation Buyers Alliance), Thomas Koch Blank (Rocky Mountain Institute), Istvan Bart (EDF), Chris Atkins (Amazon), Cate Hight (Bain & Co) and Theye Veen (Sky NRG). Event webcast.

1630-1800: Improving Carbon Market Quality and Integrity Through Digital Measurement Reporting and Verification (DMRV), with Yvan Champagne (CarbonAi), Kasha Piquette (Alberta), Joe Madden (FIUTUR), Ryan Arsenault (CarbonAi) and Benktesh Sharma (Verra). Event webcast.

1800-1930: Global Carbon Pricing Challenge (GCPC) Exchange: Lessons Learned Implementing Carbon Pricing, with Katie Sullivan (IETA) and Catherine Stewart (Environment and Climate Change Canada). Event webcast.

Don’t forget, our sessions are being uploaded to our YouTube channel! And our full Hub programme is available online here.