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What was Decided at the Climate Change Conference in Glasgow?

The 26th UN Climate Change Conference (COP26) took place from 31 October to 12 November 2021, in Glasgow, Scotland. As at the previous Climate Change COPs, the focus was on limiting global warming and the measures needed to do so. As well as the important commitment to phase out the burning of coal, regulations were decided on for Article 6, which is relevant to carbon offset projects and the CO₂ markets.

The Situation Before the 26th UN Climate Change Conference in Glasgow 

In 2015, the global international community concluded the Paris Climate Agreement, which came into force in 2021 and replaced the Kyoto Protocol. The aim of the Paris Agreement is to limit global warming to significantly below 2 degrees Celsius compared to pre-industrial times, if possible below 1.5 degrees. Industrial and for the first time also emerging and developing countries must calculate Nationally Determined Contributions (NDCs) and commit to them. According to the United Nations, emissions must be reduced by 45 per cent in 2030 compared to 2010 levels, in order to keep global warming significantly below two degrees.  

COP26 in Glasgow was originally planned for 2020 but had to be delayed until autumn 2021 due to the Covid-19 pandemic. 

 

What was Decided at the Climate Change Conference in Glasgow? 

The overarching goal of this United Nations Climate Change Conference was to stick to the 1.5 °C target of the Paris Agreement. For that reason, the most important regulations for effective climate protection had to be defined and measures to achieve the goals needed to be set in motion. One crucial element was that the participants had to complete and operationalise the Paris Climate Agreement Rulebook.  

 

There were two chapters still outstanding to complete the “Paris Rulebook” 

For one thing, specific regulations were defined in Glasgow to document the reduction of greenhouse gas emissions in a uniform way, communicate them transparently and avoid “double counting” (see below). The signatories also adopted regulations for the international trade in emissions reductions and Article 6, which is of relevance for carbon offset projects, and which determines the emissions reductions between nations (6.2) and between nations and private individuals (6.4.).  

 

The Following Additional Measures and Regulations were decided on 

  • Coal phase-out: For the first time at a global climate conference, all nations agreed on an accelerated global energy transition away from the burning of coal. The phase-out of the burning of coal is to be initiated. 
  • Climate protection plans: In order to limit global warming, the signatories are to amend their national climate goals for 2030 in 2023. 
  • Climate financing: Promised funds for climate protection and for adaptations to climate change are to be paid. Developing countries should be able to spend more money on adaptations to climate change. 
  • USA-China pact: Together the joint working group with representatives from both sides intends to contribute solutions for the development of a climate-neutral global economy. 
  • Further outcomes: Some other additional initiatives were also launched or expanded, however these are not legally binding. A total of 130 nations have signed a declaration aiming to put a stop to global deforestation by 2030. Some countries have declared that they no longer intend to pipe oil and gas abroad. US President Joe Biden’s initiative to emit less methane has been expanded. Finally, a group of nations has agreed to accelerate the end of combustion engines in cars.  

 

What changes have been made to Article 6 since COP26? 

Article 6 of the Paris Agreement opens up the possibility for countries to enter into a “voluntary collaboration” with other countries, to achieve their respective Nationally Determined Contributions (NDCs). Rules for the implementation of Article 6 of the Paris Agreement were established in Glasgow. These specific conditions and binding rules were the result of six years of difficult, controversial negotiations. The passing of these regulations is an important and major step for the future of carbon offset projects like those myclimate and others offer to private individuals and companies as specific, instantly effective offsetting measures for their own unavoidable CO2 emissions. (See the explanatory video about this above). 

Previously, on the basis of the regulations in the Kyoto Protocol, nations or companies financed climate protection measures in the form of carbon offset projects in developing or emerging countries. These demonstrably reduce CO₂ emissions and thus generate tradable CO₂ certificates. These so-called emissions reduction certificates (Certified Emission Reductions, CERs) can be traded and transferred on international offsetting markets. This means that until now, nations and private individuals were able to credit themselves with emissions savings by funding these savings.  

The Paris Article 6.2 now regulates direct international collaboration, that is the trade in emissions reduction certificates between two or more nations. A second possibility resulting from the collaboration is the “mechanism to contribute to the mitigation of greenhouse gas emissions and support sustainable development” (Article 6.4). Article 6.4 regulates the successor to the Clean Development Mechanism (CDM) from the Kyoto Protocol. The most important standards of the voluntary CO₂ market, such as the Gold Standard, can now define regulations based on the conditions of 6.4. These are to be checked by a UN Supervisory Body, which is yet to be created (future successor to the CDM Executive Board, EB). 

Both Articles define clear quality standards for the projects. These focus, for example, on environmental integrity, transparency and sustainable development. 

Certificates from the voluntary market from the time of the Kyoto Protocol are only valid if they have an issue date of 2020 or older. Certificates with a more recent date already fall under the regulations of the Paris Climate Agreement. 

 

How is Double Counting to be Prevented by Means of “Corresponding Adjustments”? 

One important goal of the regulations is to prevent any double counting of emissions reductions. For this reason, the signatories have agreed to regulations which exclude double counting of emissions reductions achieved abroad in cooperation between nations. These certificates – now known as Internationally Transferred Mitigation Outcomes (ITMOs) –  also always require a “corresponding adjustment”. This signifies a newly created mechanism, which is to prove that double counting or double claiming can be excluded by means of a transparent process and appropriate accounting.  

Double counting refers to occasions when two parties count the same emissions reduction for their respective climate goals. For example, when a country such as Switzerland and the country in which the carbon offset project is implemented both count the CO₂ reductions achieved for themselves. To prevent this double counting of emissions reductions, countries conclude agreements with each other. In these implementing agreements, the aforementioned “corresponding adjustments” ensure that the CO₂ reductions are deducted from the national greenhouse gas inventory of the country in which the carbon offset project is implemented.  

In the case of projects under Article 6.4, one would speak of double claiming instead of double counting. If a country and a private entity – such as myclimate, for example – do not have an agreement with each other, both could claim the CO₂ reductions for themselves. In such a case, this could reduce the ambition of the country in which the project is taking place.  

The corresponding adjustments in Article 6 are also particularly important for the voluntary CO₂ market, for example, in order for a company to be able to continue to call itself “climate-neutral” in future. This requires only the company to be credited and the removal of the emissions reduction from the accounting of the respective project country. 

 

What Happens now, Following the Climate Change Conference in Glasgow? 

At COP26 in Glasgow, all nations were requested to revise their national climate goals and measures by the end of 2022. The goal to keep global warming significantly below two degrees will continue to be pursued. Global emissions are to be reduced by 45 per cent by 2030 compared to 2010. The follow-up conference COP27 is to take place from 7 to 18 November 2022, in Sharm El-Sheikh, Egypt under the slogan “Together for fair, ambitious implementation, NOW”. 

 

What do the Outcomes from Glasgow mean for the Future of Voluntary Offsetting? 

The key regulations for the implementation of voluntary carbon offsetting were adopted in Glasgow. There is now clarity about the implementation of the Paris Agreement. This has further strengthened the importance of international collaboration in climate protection and the significance of market-based approaches, as well as voluntary contributions from the economy and society. This means that according to the Paris Rulebook, which was adopted in Glasgow, following a transition period which is yet to be defined, in future it will only be possible to claim climate neutrality when carbon offset projects are supported by corresponding adjustments. 

More information about the future development of voluntary carbon offsetting and “climate neutrality” can be found here. 

 

Sources: 

https://www.carbon-mechanisms.de/grundlagen/das-uebereinkommen-von-paris-und-dessen-artikel-6 

https://www.ey.com/de_de/decarbonization/freiwilliger-markt-fuer-co2-kompensation-im-umbruch  

https://www.carbonbrief.org/in-depth-q-and-a-how-article-6-carbon-markets-could-make-or-break-the-paris-agreement  

https://carbonmarketwatch.org/2021/12/10/faq-deciphering-article-6-of-the-paris-agreement/#article-6-intro  

https://www.uvek.admin.ch/uvek/de/home/uvek/medien/medienmitteilungen.msg-id-85865.html  

https://www.bafu.admin.ch/bafu/de/home/themen/klima/dossiers/klimakonferenz-glasgow-cop26.html  

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