Countries assembled in Katowice for the climate talks were close to finalising an agreement over the rule-book of the 2015 Paris Agreement on Saturday night, after an issue over carbon markets that had held up negotiations for two days was deferred for next year.
Brazil had been involved in major stand-off with the developed countries on a few provisions of the new market mechanism to be created for trading of carbon emissions. For two full days, and one whole night, it argued, backed silently by India and China and a few others, for allowing the unused carbon credits of developing countries, earned in the existing carbon markets under the Kyoto Protocol, to be transitioned to the new one being created under the Paris Agreement.
Carbon credits used to be earned by industries in developing countries by making verifiable reductions in their emissions. These credits could then be traded, for money, to countries which wanted them to fulfill their emission reduction targets under the Kyoto Protocol.
Much of the credits accumulated by countries like Brazil, India and China in the last few years, however, have remained unused in the absence of demand. Brazil had been arguing that these be allowed to be traded in a similar market mechanism that is sought to be created under Paris Agreement, which will replace Kyoto Protocol in 2020.
Developed countries had been opposing this transition on the grounds that the quality of these credits — the question whether these credits represent actual reductions in emissions — was suspect. They have been arguing that the rules of new market mechanism being set up were much more stringent than the existing ones, and so, existing credits must not be allowed to be transitioned.
Another tussle on carbon markets was happening over the need to avoid double-counting of emission reductions. Developed countries have been claiming that some of Brazil’s demands would allow for double-counting, which would hurt the global objective of keeping the emissions below a certain level.
The big fight had stalled the entire negotiations, sending it into an extra day. With none of the parties ready to budge from their positions, it was proposed that the issue be deferred for next year.
The two sides relented, paving the way for an agreement, which was scheduled to be reached later at night.
The fight over carbon markets overshadowed all the other tussles that remained till the last day. Till Saturday afternoon, disagreements had remained over issues related to finance, where a provision seeking to classify loans as climate finance has angered the developing countries. It was still not clear how it had been resolved.
The problem of how to acknowledge a special report from the Intergovernmental Panel on Climate Change over the feasibility of keeping global temperatures below 1.5 degrees had also made a return, after apparently having been resolved at one stage. The report had been commissioned by these same countries at the Paris climate conference three years ago. A fight had broken out last week over whether to “welcome” the report or just take “note of” it in the final decisions of this conference. The language has later changed to “welcomes the timely completion of”, which, too, was unacceptable to several countries. The final resolution was still awaited.