The 26th Conference of the Parties (COP26) in Glasgow, UK this month set out principles that could hold the world’s biggest polluters to take more responsibility for their actions.
India has long maintained that the countries contributing the most to the climate crisis should honor their commitments to finance mitigation and adaptation projects.
Article 6 of the Paris Agreement
To offset annual greenhouse gas emissions, major polluters engage in carbon trading. As part of this practice, countries that have emission units that are not being used can sell excess capacity to countries that have exceeded their targets.
Another way to offset emissions is a voluntary program in which polluters pay for the development of carbon reduction programs in the poorest countries.
These rules on how a country can reduce its emissions using international carbon markets were first set by Article 6 of the Paris Agreement on climate change.
However, Article 6 could also weaken a country’s Nationally Determined Contributions (NDCs) and increase global emissions without the right rules. The biggest risk it poses is double counting, in which the two countries that sell and buy the credits to reduce emissions count it as part of their NDCs.
Although Article 6 emphasizes the need to avoid double counting, its scope depends on how the accounting rules are implemented.
Double counting leads to an increase in global emissions.
A common set of tools
COP26 negotiators announced that they had agreed on a common set of tools to globally harness the burgeoning carbon market that would attract huge green investments through offset programs carbon.
“It creates a framework for international cooperation. And a solid that ensures integrity by preventing double counting of emission reductions when credits are transferred across borders, ”Hæge Fjellheim, head of carbon research at financial data provider Refinitiv, told The Guardian. .
Emissions trading system
Last week, the EU’s emissions trading scheme drew a carbon price of 67 euros per tonne on the first day of trading.
Countries like the United States, Canada, Japan, Switzerland, New Zealand, China and South Korea are also running similar programs worth around $ 272 billion.
Invest in projects
Meanwhile, climate commitments made at COP26 have led to a boom in green programs. The new rules agreed at COP26 will help countries achieve their national goals by investing in projects in developing countries.
Under this program, a country can invest in a renewable energy project in Nigeria or a tree planting program in Brazil to achieve its own goals.
The new rules will therefore help developing countries secure investments from major polluters to finance reforestation or low-carbon energy programs.
(Edited by : Shoma bhattacharjee)