GLASGOW, Nov 13 (Reuters) – Negotiators closed a deal setting rules for carbon markets at the United NationsCOP26 climate talks on Saturday, potentially unlocking trillions of dollars for protecting forests, building renewable energy facilities and other projects to combat climate change.
The final deal adopted by nearly 200 countries will implement Article 6 of the 2015 Paris Agreement, allowing countries to partially meet their climate targets by buying offset credits representing emission cuts by others.
Companies, as well as countries with vast forest cover, had pushed for a robust deal on government-led carbon markets in Glasgow, in the hope of also legitimising the fast-growing global voluntary offset markets.
Critics worry that offsetting could go too far in allowing countries to continue emitting climate-warming gases, making some wary of a hasty deal.
The deal was “a Brazilian victory” and the country is gearing up to become a “big exporter” of carbon credits, its environment ministry said on social media. The country is home to much of the Amazon forest, and has huge potential to build wind and solar plants.
“It should spur investment and the development of projects that could deliver significant emissions reductions,” Brazil’s chief negotiator Leonardo Cleaver de Athayde told Reuters.
But nations most vulnerable to the effects of climate signaled concern over offsets possibly opening up for abuses allowing bad actors to avoid cutting emissions.
“On Article 6, we will need to remain vigilant against greenwashing,” the Marshall Islands’ Climate Envoy Tina Stege said in a statement.
DISAGREEMENTS OVERCOME
The accord managed to overcome a series of sticking points that contributed to the failure of the previous two major climate meetings.
Previously, there was disagreement over a tax on certain carbon trades intended to fund climate adaptation in poorer nations. The deal addressed this with a compromise that had a two-track approach.
Bilateral trades of offsets between countries will not face the tax. The deal suggests developing nations capitulated to rich nations demands, including the United States, which had objected the levy.
In a separate centralised system for issuing offsets, 5% of proceeds from offsets will be collected to go toward an adaptation fund for developing countries.
Also in that system, 2% of the offset credits will be cancelled. That aims to increase overall emissions cuts by stopping other countries using those credits as offsets to reach their climate targets.
Another provision resolved how to carry forward carbon credits created under the old Kyoto Protocol, the Paris Agreement’s predecessor,…