COP29: Parties reach consensus on standards for creation of carbon credits

Countries (Parties) participating at the ongoing United Nations Climate Change Conference in the capital city of Azerbaijani, Baku, have reached a consensus on standards for the creation of carbon credits under Article 6.4 of the Paris Agreement.

This was disclosed in a statement published Monday on the website of the conference organisers.

“Today, Parties assembled for the first day of the UN Climate Change Conference achieved a critical early success by reaching consensus on standards for the creation of carbon credits under Article 6.4 of the Paris Agreement,” the statement said.

It said the move will enable climate action by increasing demand for carbon credits and ensure that the international carbon market operates with integrity under the supervision of the United Nations.

Carbon credits, or carbon offsets, refer to carbon emissions reductions or removals, measured in tonnes of carbon dioxide equivalent (tCO2e). The carbon market allows investors and corporations to trade both carbon credits and carbon offsets simultaneously. Thus, helping to mitigate the environmental crisis, while also creating new market opportunities.

The Article 6.4 mechanism, also known as the Paris Agreement Crediting Mechanism, allows countries to trade reductions in carbon emissions in a manner that goes beyond zero-sum offsetting, to achieve their commitments under the Paris Agreement.

In July last year, Nigeria’s former Director General of the National Council on Climate Change Council (NCCC), Salisu Dahiru, explained that the “carbon trading” scheme captured under the country’s climate change Act will address some of the climate challenges in the country.

“As far as Nigeria is concerned, the carbon trading scheme is an aspect of our national policy and also a national priority to put in place all the measures needed to address all our mitigation challenges,” he said,” Mr Dahiru said at the time.

However, climate activist/advocates have also expressed concerns over the idea of carbon market initiative, as many believe it could lead to land grabbing and permission/gateway for rich companies to continue to emit greenhouse gases.

COP29 top priority

During the opening plenary on Monday, the COP29 organisers hinted that the negotiating priority at the conference is to achieve a “new climate finance goal”.

“COP29 will “test our commitment to the multilateral climate system” upon end of the first decade after the Paris Agreement. COP29 top negotiating priority is a new climate finance goal,” the statement said.

It added that a realistic goal for what the public sector can directly provide and mobilise seems to be in the “hundreds of billions”.

Commenting on the outcome of the consensus, COP29 President Mukhtar Babayev said, it will be a game-changing tool to direct resources to the developing world.

“Following years of stalemate, the breakthroughs in Baku have now begun. But there is much more to deliver,” he said.

The COP29 Presidency identified the full operationalization of Article 6 as a key negotiating priority this year. It noted that finalising Article 6 negotiations could reduce the cost of implementing national climate plans by $250 billion per year by enabling cooperation across borders.

“Today’s decision is an essential step in achieving that goal and establishes strong momentum for continued progress over the coming two weeks of negotiations,” the COP29 president noted.

In his opening address Mr Babayev highlighted how current policies put the world on track for catastrophic warming of 3 degrees Celsius, citing the latest UNEP Emissions Gap Report.

He told delegates at the plenary that “We are on a road to ruin”. Adding that “Whether you see them or not, people are suffering in the shadows. They are dying in the dark. And they need more than compassion, more than prayers and paperwork”.

He said people are crying out for leadership and action and that COP29 is the “unmissable moment” that can chart a new path forward for everyone.

To enable action, Mr Babayev identified agreement on a fair and ambitious New Collective Quantified Goal (NCQG) on climate finance as the top negotiating priority for COP29.

He noted that progress on structure, access features, transparency arrangements and timeframe, while acknowledging remaining differences on contributors and the size of the final goal.

“We have put mitigation on the agenda at all meetings ahead of COP so that we can find a way forward,” he said. “As a Presidency we are making every effort to attack the problem in every direction, without losing focus on our top negotiating priority – the NCQG,” he said.

Conference of the Parties-COP

The Conference of the Parties, dubbed COP, is the supreme decision-making body of the United Nation Convention on Climate Change (UNFCCC).

States (countries) that are parties to the convention send representatives to COP, where they review the implementation of the convention and any other legal instruments adopted at COP meetings, and they make decisions necessary to promote the effective implementation of the convention, including institutional and administrative arrangements.

One such decision is the legally binding international treaty on climate change — the Paris Agreement, adopted by 196 parties in 2015. The agreement’s primary goal is to hold “the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.”

Based on this, a major task at COP is to review the national communications and emission inventories submitted by all parties. The meeting presents a platform to assess the effects of the measures taken by parties and the progress made in achieving the ultimate objective of the convention. The parties meet every year, unless they decide otherwise.

This year, the COP29 agenda is expected to be anchored on climate finance, mitigation, and adaptation, with the New Collective Quantified Goal (NCQG) designed to provide support for vulnerable communities in global climate solutions.

The COP29 President opened the summit by setting clear expectations for how global leaders must enhance ambition and enable action during the conference.

“COP29 is a critical moment for global leaders to come together and demonstrate their collective commitment to climate action,” organisers said.

This year’s summit will run from 11-22 November in Baku, Azerbaijan, and approximately 70,000 delegates are registered to attend, according to organisers. This includes heads of state and government who will participate in the leaders’ segment on 12-13 November.