By AFP - Agence France Presse
Nations approve new UN rules on carbon markets at COP29
Baku, November 11, 2024 (AFP) - Governments attending the COP29 talks on Monday approved new UN rules for international carbon markets in a key step towards allowing countries to trade credits to meet their climate targets.
On the opening day of the UN climate talks in Azerbaijan, some 200 nations agreed on a series of basic rules crucial to getting a market up and running after nearly a decade of complex discussions.
COP29 President Mukhtar Babayev celebrated the “breakthrough” but said more work still needed to be done.
Other important aspects of the overall framework still need to be negotiated, experts said, but the decision brings closer a high-quality credit trading market, long sought by the UN.
“It's extremely significant,” Erika Lennon of the Center for International Environmental Law (CIEL) told AFP in Baku, saying it would ‘open the door’ to a fully-fledged market.
Carbon credits are generated by activities that reduce or avoid greenhouse gas emissions that heat the planet, such as planting trees, protecting carbon sinks, or replacing polluting coal with clean energy alternatives.
One credit is equivalent to one ton of heat-trapping carbon dioxide avoided or removed.
Since the Paris climate agreement in 2015, the UN has been drawing up rules to allow countries and companies to exchange credits in a transparent and reliable market.
The benchmarks adopted in Baku will allow the development of rules, including the calculation of how many credits a given project can receive.
Once up and running, the carbon market will allow countries, especially rich polluters, to offset emissions by buying credits from nations that have reduced greenhouse gases more than they promised.
The purchasing countries could then use the carbon credits to achieve the climate targets promised in their national plans.
- 'A big step forward' - Are you right?
This brings the system much closer to existing in the real world,” Gilles said.
“It's a big step forward,” said Gilles Dufrasne from Carbon Market Watch, a think tank.
“But even with that, it doesn't mean that the market exists,” he added, saying that other safeguards and questions about governance have yet to be answered.
A previous attempt by the UN to regulate carbon markets under the Paris Agreement was rejected in Dubai in 2023 by the European Union and developing nations as being too lax.
Some observers were unhappy that the decision in Baku left other crucial and long-standing aspects of the wider crediting mechanism, known under UN terms as Article 6, unresolved.
“It's not possible to declare victory,” said one European diplomat, speaking on condition of anonymity.
There are hopes that a robust and reliable UN carbon market could eventually indirectly raise the standards of the scandal-hit voluntary credit trade.
Companies wishing to offset their emissions and claim carbon neutrality have been the main buyers of these credits, which are bought and exchanged but lack common standards.
But the voluntary market has been rocked by scandals in recent years amid accusations that some credits sold did not reduce emissions as promised or that projects exploited local communities.
Lennon said that even if a carbon market had integrity, “if what you're doing is offsetting ongoing fossil fuels with some kind of credit, you're not reducing anything.”
np/sah/giv
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