Controversial, flawed method enters UN carbon market draft text at COP28

A new draft text on Article 6.4 of the Paris Agreement released on December 9, 2023 at the 28th Conference of Parties (COP28) to the United Nations Framework Convention on Climate Change has called for a reconsideration of a controversial measure panned by experts.

Article 6.4 is being negotiated at COP28 and will create a global carbon market that allows the selling and purchasing of carbon credits. The market will be overseen by a Supervisory Body.

Under 6.4, entities that develop a project that reduces emissions (emission reductions) or removes carbon dioxide from the atmosphere before storing it (removals) need to submit their proposal to the Supervisory Body. Once approved, these projects can earn carbon credits, which represent a tonne of carbon dioxide equivalent. These credits can be bought by countries, companies, or even individuals to reach their climate targets. 

The recent draft text asked the Supervisory Body to reconsider including ‘tonne-year’ accounting for nature-based removals, which are projects that use nature’s ability to capture and store carbon. Examples include forests, mangroves, and agricultural soils, which can remove and store carbon from the atmosphere.

The tonne-year accounting method allows the issuance of credits for projects that store carbon temporarily. Each tonne sequestered for one year would be worth a “tonne-year”, according to Carbon Market Watch, an independent, not-for-profit watchdog. “For example, storing a tonne for 100 years would create a carbon credit, but so would storing 100 tonnes for a year or 10 tonnes for 10 years,” it added.

The Supervisory Body had initially considered this tonne-year accounting metric, but it did not make it to the final submissions to the Parties.

“There are a lot of flaws with this tonne-year methodology. Earlier this year, a bunch of experts said that it was dangerous and the supervisory body rejected it. On December 8, Canada just tried to slip it in,” Injy Johnstone, Research Associate in Net Zero Aligned Offsetting, told Down To Earth.

The expert, however, added that it is unlikely that this will stay in the draft text over the next few days. “It’s just a sign that even at this late stage, there can be these kinds of considerations added in,” she added.

Over the next few days, Parties will also have to decide on the issue of emission avoidance and conservation enhancement activities, which are not clearly defined.

Some Parties view emission avoidance as project developers claiming carbon credits to keep oil in the ground. In 2022, the Philippines made a submission defining emissions avoidance as “the full displacement or prevention of greenhouse gas emissions expected to be generated by planned greenhouse gas emitting actions in energy, transport, manufacturing, agriculture, human-induced deforestation, and other emitting development activities.”

The Republic of Korea called for establishing a clear definition of emissions avoidance along with a list of activities that would be included in this definition.

Conservation enhancement activities involve protecting natural landscapes, species or ecosystems.

At COP28, Parties have listed two options. The first one is that emission avoidance and conservation enhancement activities may also result from emission reduction or removal activities. 

The other option is to separate emission avoidance from conservation enhancement activities. It also states that emission avoidance activities are not eligible under the mechanism.

“Parties should choose the option that excludes emissions avoidance in the Article 6.4 mechanism,” Erika Lennon, a senior attorney at Center for International Environmental Law, wrote on X, formerly Twitter.

Further, the draft also offered another option: A moratorium on markets as a precautionary measure. To analyse the suspension of the moratorium, it also suggested involving the Intergovernmental Panel on Climate Change to produce an official report that assesses how the carbon market contributes to the stabilisation of the climate system every three years.

Over the next few days, Parties will discuss other recommendations provided by the supervisory body on removals and standards for methodologies that calculate emission reductions.

If they are approved, Article 6.4 could become operational. But civil society groups don’t think the recommendations are ready for adoption. There are far too many loopholes. It opens the door to a host of land and engineering-based (meaning unproven technofixes) removals, Lennon noted.

The recommendations lack tools to monitor the reversal of removals, which happens when stored carbon is released back into the atmosphere, she also pointed out. There is also no mention of protecting human rights or the rights of Indigenous Peoples.

Parties are holding ‘inf infs’, where delegates converse informally and non-Party stakeholders such as Observers are not allowed.