Harvard Project on Climate Agreements Hosts Webinar Previewing Article 6 Negotiations at COP26

Negotiators convening this week and next at the 26^th Conference of the Parties (COP26) of the United Nations Framework Convention on Climate Change (UNFCCC) in Glasgow, Scotland will be challenged to find consensus on a range of issues, but perhaps none more important than the so-called “Rulebook” for implementing Article 6 of the landmark 2015 Paris Agreement. A panel of experts shared their perspectives on the negotiations during a webinar on Monday (November 1), co-sponsored by the Enel Foundation and the Harvard Project on Climate Agreements (HPCA). Titled “Prospects for Article 6: COP-26 and Beyond,” the webinar was moderated by HPCA Director Robert Stavins.

“The Paris Agreement is judged by many observers as a major accomplishment, but there are two necessary conditions for its success. One is adequate scope of participation, which has been essentially achieved, and the other is adequate ambition of the individual national contributions,” Stavins explained. Countries can be incentivized to increase their Nationally Determined Contributions (NDCs), he argued, through the establishment of linkages between jurisdictions, which will necessitate the exchange of both climate credits and responsibilities.

“It’s going to be very important to attribute the emissions reductions to the correct party in regard to the achievement of its NDC target,” he said. “In particular, it will be important to avoid double-counting, and this is where Article 6 of the Paris Agreement comes in.”

Michael Mehling, Deputy Director of the Center for Energy and Environmental Policy Research (CEEPR) at the Massachusetts Institute of Technology (MIT), presented a synopsis of his recent HPCA paper which explores key areas of disagreement on Article 6 and possible outcomes from COP26. He explained that the so-called “fault lines” surrounding Article 6 — both technical and political — remain obstacles to consensus but he outlined the range of options that the Parties can consider which could pave the way for progress.

“It's not about finding a quick fix, a silver bullet, or some accounting methodology, so it's really about reconciling very different interests and economic motivations…of Parties which are on some issues still relatively far apart, and still have to be brought together,” he said.

Mehling described what he perceives are the five critical Article 6 negotiation issues at COP26: accounting for Article 6.4 reductions outside the scope of Party NDCs; generating finance from Article 6.2 to support adaptation action; transitioning “legacy units” generated under the Kyoto Protocol prior to 2020; resolving whether “overall mitigation in global emissions” should apply to internationally transferred mitigation outcomes under Article 6.2; and setting baselines and determining additionality under Article 6.4.

“The pressure, of course, is huge for negotiators to come to an agreement. After two COPs [in which no agreements on the Article 6 Rulebook were reached], this is the one outstanding issue, so there will be pressure to move forward. And there’s been a saying, especially in the environmental NGO community — ‘no deal is better than having a bad deal.’ I think that when it comes to accounting, that’s absolutely true,” he said. “If we don’t get that right, we will see a repeat of some things that we’ve seen with earlier carbon markets, and this would undermine and destroy confidence in the market.”

Kelley Kizzier, Vice President for Global Climate at Environmental Defense Fund and a former Article 6 climate negotiator, agreed with Mehling, stating that “many compromises are possible and…we need to avoid a situation where perfect stands in the way of the good. We have to find a compromise and I hope that, with these changes and with the extra time that we've had between COP25 and 26, we will have a good compromise on the table in Glasgow.”

Daniele Agostini, Head of Low Carbon and Energy Policies at the Enel Group, offered his perspectives from the private sector, arguing that finding a compromise on Article 6 is essential in light of recent research showing its potential to help reduce the cost of emissions reduction under current NDCs by $300 billion by 2030, and freeing up additional financing of $1 trillion by 2050.

“What the UNFCCC manages to do in Glasgow is fundamental,” he remarked. “If we do not get this chapter of the Paris Agreement finalized…the UN runs the risk of being irrelevant, and putting together and coordinating the different systems [voluntary and compliance markets] afterwards is going to be a lot more difficult.” If the process drags out far beyond Glasgow, Agostini explained, markets could become unsettled and low-carbon private sector investments could be undermined.

Agostini continued, “Balancing flexibility and robustness is fundamental, and we really hope that there will be a very pragmatic approach, but a pragmatic approach that holds everybody on board. We need to make sure that everybody strongly agrees on these rules and that ambiguities are cleared so that the markets can take off with greater certainty.”

The panel fielded questions from members of the audience on topics ranging from voluntary carbon markets to non-market approaches. Monday’s webinar was a preview of an in-person side event scheduled at COP26 next Wednesday, November 10, also co-sponsored by HPCA and the Enel Foundation, with the same panelists, titled “Securing Climate Ambition with Cooperative Approaches: Options under Article 6.” For details see here.