An official confirmation of Modi’s visit has yet to be announced.
India, China, Brazil and some other developing countries have strongly advocated maintaining carbon credits, which allow companies to offset their greenhouse gas emissions, as part of the Paris Agreement of 2015, an ambitious global action plan to fight climate change.
The carbon market mechanism, mainly the guidance of Article 6 (market and non-market mechanisms) of the Paris Agreement regulations, is the new voluntary climate change mitigation mechanism that aims to help organizations reduce their carbon footprint.
At the 2019 UN climate summit, countries failed to reach unanimous agreement on Article 6 on the carbon market system as long negotiations remained inconclusive despite 48 hours past the deadline official.
Describing the agenda for the 26th meeting of the Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCCC), Patricia Espinosa, UN Chief Climate Officer, said the one of the main subjects of negotiation is the conclusion of the negotiations underway around the rules of article 6. to finally allow market and non-market tools to launch their operations.
The Article 6 Rules Agreement maintains environmental integrity, including guidance for cooperation under Article 6.2, a new UN mechanism under Article 6.4 and a program of work on non-market approaches under Article 6.8.
Explaining the mechanisms of the carbon market, the UNFCCC says that when countries set a limit or ceiling on greenhouse gas emissions, they create something of value: the right to emit.
What happens if we apply the principles and rules of the market? Countries or companies that cut their emissions below their cap have something to sell, unused emission allowances, measured in tonnes of CO2 equivalent.
Countries and companies that fail to meet their target can buy these one-ton units to fill the gap. This is called emissions trading, or cap and trade. The net effect on the atmosphere is the same, provided the measurements are correct, i.e. each unit represents a true reduction of one tonne below the ceiling and each unit is only used. ‘once. It requires clear rules and transparency.
Article 6 carbon market rules will replace the Clean Development Mechanism (CDM) under the Kyoto Protocol, the predecessor of the Paris Agreement.
In India, 1,669 projects were successfully registered under the CDM, millions of Certified Emission Reduction Credits (CERs), better known as carbon credits, remain unsold with the CDM market collapse .
One CER is equal to one tonne of carbon dioxide. CERs help companies earn billions of dollars by trading them. Currently there is a market but no political platform.
At the last UN climate summit, the developed world took a stand against allowing the âspamâ carbon market, which allows the buying and selling of carbon emissions, and emerged as part of the of the Kyoto protocol adopted in December 1997 to continue in the existing mechanism under the Paris Convention An understanding.
They blamed the faulty mechanism and loopholes in the existing system that failed to prevent double counting of carbon credits and called for a new mechanism to be put in place.
Several countries such as India were demanding to carry over old carbon credits also earned by companies to meet new climate targets.
The carbon credit system allows countries to reduce their emission reduction targets by accumulating and trading carbon credits.
According to rough estimates, countries have nearly 4 billion unsold Certified Emission Reductions (CERs). India has a depository of 750 million and China has much more than India.
Climate negotiators say there is a need to increase transparency in COP26 to trade carbon credits, as the current mechanism has been “strewn with scandals”.
A latest report from an international task force led by UN Special Envoy for Climate Action and Finance, Mark Carney, and chaired by Bill Winters, CEO of Standard Chartered Bank, indicates that to achieve the goals of Paris aiming to limit global warming, the world community must reach ânet zeroâ by 2050 at the latest.
This will require an economic transition as a whole: every company, every bank, every insurer and investor will have to adjust their business models, develop credible plans for the transition and implement them.
The report, Taskforce on Scaling Voluntary Carbon Markets, says that given the demand for carbon credits that could arise from global efforts to reduce greenhouse gas emissions, it is evident that the world will need a voluntary market. carbon that is vast, transparent, verifiable and robust to the environment.
Limiting global warming to 1.5 degrees Celsius requires that annual global greenhouse gas emissions be reduced by 50% from current levels by 2030 and reduced to ânet zeroâ by 2050.
(Vishal Gulati can be contacted at [email protected])
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