12/6/2023

Attending COP with the delegation of Paraguay

My client for this COP is the delegation of Paraguay. I am part of their “party overflow”, meaning I can assist them in their work and attend negotiations, but I don’t have the authority to speak on behalf of the country. My main work for them was keeping their team informed on Article 6 negotiations, which have to do with international voluntary carbon markets. My studies up until this point at school focused mostly on energy and economics, so I thought I was well-poised to understand what was going on in the negotiation rooms. I learned very quickly that the highly technical nature of the negotiations proved a high barrier to entry.

Article 6 background

Article 6 was introduced in the 2015 Paris Agreement as a set of market mechanisms used to accelerate decarbonization efforts. Article 6 aims to facilitate cost-effective emissions reductions and promote sustainable development while ensuring environmental integrity and preventing double counting of emissions reductions. The main theory underpinning this was that CO2 reduction is cheaper in some places than in others. Significantly, mitigation outcomes are usually cheaper to achieve in the developing world than they are in the developed world. Therefore, article 6 would enable a wealthier country to achieve its carbon reduction goals by purchasing Internationally Traded Mitigation Outcomes (ITMOs).

There were three main sections of interest for the Article 6 negotiations in this COP. Article 6.2 is a decentralized mechanism where, for example, two countries can agree on a bilateral cooperative approach to trade ITMOs between them. Article 6.4 is a centralized, project-based mechanism with global oversight. Article 6.8 outlines non-market approaches that countries can take to increase mitigation outcomes globally, such as capacity building and technology transfer.

Article 6 has made some progress since the Paris Agreement but is not fully implemented – or “operationalized” in COP speak – yet. COP26 in Glasgow and COP27 in Sharm el Sheikh saw significant progress in Article 6. Countries agreed on avoiding double counting of emissions reductions, sharing proceeds for adaptation, and completed a rulebook on operationalization. However, there remains work to be done in this COP to fully implement Article 6.

Progression of negotiations

At this stage, Article 6 negotiations are highly technical and difficult to follow without deep knowledge of the history of the negotiations and the significance carried by key words in the document. I did not know I was going to be following Article 6 until I got here, so I tried my best to catch up quickly.

The 40-page document pertaining to Article 6.2 will be, by far, the most difficult to work through. The level of technicality is such that countries are debating on the contents and wording of drop-down menus on the Agreed Electronic Format (AEF) that will be used to register these ITMOs.

One of the most difficult things that countries are trying to balance is ensuring environmental integrity while giving countries flexibility to implement Article 6 in a way that makes sense for their individual circumstance. Everyone wants this new carbon market to be very credible and transparent, given the difficulties the current voluntary carbon market faces. However, Article 6 will not be a one-size-fits-all approach.

The process of negotiations is very slow. The co-facilitators set the agenda to discuss one specific section of a document and won’t move on until every negotiating group or country that wants to speak is able to do so. It seems like parties have very strong opinions on nearly every paragraph, and it is difficult to find places of consensus. Parties are also very repetitive with each other, slowing down the negotiations further. After sitting in several of these meetings, it is unclear how anything gets done at COPs. I suspect that many areas of consensus are found in the final hours when delegates have gotten almost no sleep for two weeks and compromises are presented as “take it or leave it” offers.

We’ll see how the negotiations progress in the next week. Hopefully, this COP will take a solid step forward for Article 6 operationalization.