Paris forges momentum towards enduring climate action

Paris, 12 December 2015 – Today, at the UN climate talks in Paris a global deal where all countries have agreed to take action on climate change was adopted. Carbon Market Watch comments on the long-term goal, the ambition ratcheting mechanism, provisions for the use of markets, the establishment of a new mechanism, human rights provisions, bunker emissions, pre-2020 action and the impact of the Paris treaty on EU’s climate policies.

The Paris Agreement marks a major step forward on climate action. While it is still early to absorb all the implications of the 31 pages of text, in mitigation, there have been seismic shifts, particularly:

• Aiming to limit global warming to 1.5C
• Working to increase ambition every five years
• Developing robust rules for the use of carbon markets
• Establishing a new mechanism that moves beyond offsetting
• Recognizing the need to protect human rights
• Increasing recognition of the importance of international aviation and shipping emissions
• Adding quality rules for the cancellation of carbon credits pre-2020
• Sending signals to strengthen the EU’s climate policies

“The French Presidency achieved a miracle in presenting a detailed treaty acceptable to all Parties. At first reading, the new global climate treaty is surprisingly positive. We are still looking for the loopholes.” commented Eva Filzmoser, director at Carbon Market Watch.

Long term goal
Five years ago, Parties agreed that the global average temperature should be limited to 2 degrees celsius. In Paris, following a two-year review of science, the agreement is now “holding the increase in global average temperature to well below 2C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5C above pre-industrial levels”.

Dr. Katherine Watts, global climate policy advisor commented:
“It is great to see that Parties have embraced a spirit of solidarity with the most vulnerable in agreeing to try to limit warming to 1.5C. Countries will now have to make it happen, but this should be easier than ever as costs of clean technologies are falling rapidly and innovation creates new opportunities to decarbonize.”

Ambition ratcheting
The current INDCs only limit warming to around 3C, far higher than the newly-agreed 1.5C goal. It is therefore extremely important that countries enhance their current INDCs, and also look to far greater ambition in future.

Dr. Katherine Watts, global climate policy advisor commented:
“The Paris Agreement creates common moments when countries are expected to bring forward their contributions. This helps to make countries do their homework to decide what they can bring to the table. It is very gratifying to see that these will happen every 5 years, in line with political cycles to increase accountability for achieving the goals”.

Role of markets under the Paris agreement
The Paris agreement contains several provisions related to carbon pricing and markets. Countries can use and transfer “mitigation outcomes” to other countries, which opens the door to the linking of Emissions Trading Systems. The accounting rules for such transfers will be developed in the coming years and will include guidance on how to avoid the “hot air” trading of bogus pollution permits, including the avoidance of doubled-counted emission reductions. The agreement also obliges countries to promote environmental integrity and to pursue domestic climate measures to achieve their targets, thereby limiting the amount of international carbon credits that can be used.

Eva Filzmoser, director at Carbon Market Watch commented:
“Paris has enshrined the core principles for using carbon markets, though much work remains. The challenge is now to learn from past mistakes that led to billions of hot air credits when elaborating guidance for markets over the next years”.

New mechanism to contribute to mitigation and sustainable development
Similar to the establishment of the UN’s carbon offsetting mechanism Clean Development Mechanism (CDM) in Kyoto, the Paris climate deal established a new mechanism, entitled ‘mechanism to contribute to the mitigation of greenhouse gas emissions and support sustainable development’. The new mechanism, considerably widens the scope, compared to the CDM, with a number of additional key elements that are yet to be defined in subsequent modalities and procedures:

• Moves beyond pure offsetting, including a net mitigation element
• Moves away from being project based to a mechanism including policies and measures, e.g. “mitigation activities”
• All countries, including developed and developing countries, can participate in the mechanism, meaning, they can generate or use carbon offsets
• Needs to ensure environmental integrity and transparency, including in governance, and apply robust accounting rules to avoid double counting

Eva Filzmoser, director at Carbon Market Watch commented:
“We very much welcome that the new market provisions include robust accounting rules and a shift of the new mechanism beyond pure offsetting. However, the new mechanism is very complex so a watchful eye will be required when developing the modalities and procedures in the course of the next few years.”

Human rights
Following calls from numerous countries that wanted to see human rights recognized in the operative part of the agreement, compromise was found with detailed preambular language that specifies that parties, when taking action to address climate change, have to respect, promote and consider respective human rights obligations. This also includes the right to health, the rights of indigenous peoples, local communities, migrants, children, persons with disabilities and people in vulnerable situations and the right to development, as well as gender equality, empowerment of women and intergenerational equity.

Juliane Voigt, human rights policy researcher commented:
“The new Paris agreement recognizes the interconnectivity of climate change and human rights and sets the foundation to make the new sustainable development mechanism accountable to human rights obligations.”

Emissions from international aviation
International aviation and shipping are not included in national emissions reduction targets. The Kyoto Protocol called on the International Civil Aviation Organization and International Maritime Organization to work on developed countries’ emissions, but progress has been intangible. The Paris agreement ideally would have called upon these sectors to reduce their emissions in line with the 1.5C goal and explicitly have brought them into the global stocktake.

Dr. Katherine Watts, global climate policy advisor commented:
“The world’s diminishing carbon budget requires immediate and ambitious action from the fast growing international aviation and shipping sectors. Together, they already account for 5% of global CO2 emissions and their other emissions cause even greater warming. The 1.5°C temperature goal places an obligation on all sectors to act, and aviation and shipping are no exceptions.”

Pre-2020 carbon credit cancellation
After a push for the cancellation of carbon credits to increase ambition pre-2020, Paris stipulated quality criteria for such an action.

Eva Filzmoser, director at Carbon Market Watch commented:
“Quality of cancelled carbon offsets is essential. The decision text is a good starting point but it needs to be clear that the vintage restrictions and accounting rules apply not only to CDM offset credits but all carbon credits alike”.

Impacts on the EU’s climate policies
The Paris agreement implements a 5-year review of the climate pledges guided by a global stocktake that assesses the collective progress towards achieving the long-term 1.5°C objective. Since the EU’s 2030 climate target is currently calibrated to limit global temperature rise to only 2°C, rather than 1.5°C, the EU will need to submit an updated target to the UNFCCC before 2020.

Femke de Jong, EU climate policy advisor:
“The momentum in Paris should be translated into higher ambition in Europe, as reductions far beyond the -40% target by the year 2030 are required to stay within the newly adopted 1.5C goal. Also the EU’s mitigation cycles must be synchronized to those agreed in the Paris climate agreement by adopting five-year periods.”

ENDS

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