Text on carbon market must be approved in the final stretch of COP26

The week is drawing to a close and the final text of the Paris Agreement needs to be finalized at COP26 in Glasgow, Scotland. The mood in the Brazilian delegation is one of optimism regarding the approval of Article 6, which regulates the carbon market, but not in relation to other articles related to transparency, accounting for goals and financing for adaptation and mitigation.

The United Nations Special Rapporteur on the Rights of Indigenous Peoples, Victoria Tauli-Corpuz, agrees with the difficulty of finalizing the chapter on financing.

“The pressure from the governments of developed countries to get rid of negotiations on long-term financing and the hesitation to finance damages and losses is very regrettable”, he adds.

At the moment, according to the negotiators, there is little unanimity. One is that the final document should come out only on Saturday and not on Friday (12), according to the initial schedule. The other is that everyone defends the principle of environmental integrity (the full maintenance of ecological functions and essential ecological processes), but there are several proposals to reach it.

According to sources from the Brazilian delegation, climate finance is an issue that has grown a lot in relation to COP25, in Madrid. At this Climate Conference, many countries, especially developing nations, would be placing money as the main focus of interest, even greater than the pending items in the Paris Agreement’s rulebook – approved in 2015 and which established the goal of maintaining the increase in the planet’s temperature well below 2°C.

In addition, developing countries already want to start the discussion on the next collective global financing target from the year 2025, which will replace the current one that stipulates US$100 billion a year for poorer nations. Brazil made a proposal with Argentina and Uruguay to create a committee that would discuss this matter. However, rich countries would be avoiding this negotiation.

There is still a lack of definition about what climate finance would actually be, which should not be defined in this COP. Also according to sources, developing nations expect to receive outright donations – as it works for example in REDD+ (reduction of greenhouse gas emissions and increase in forest carbon stocks).

Rich nations, on the other hand, would be trying to push expensive loans, with the co-financing factor. In practice, therefore, climate finance would be becoming a new form of indebtedness for developing countries.

With regard to financing linked to damages, a flag linked to the most vulnerable island nations, the fund currently foreseen is even smaller: around US$ 200 million, with a demand to increase the value.

About Article 6 – which took the reputation of blocking the negotiations of the last COP in Spain together with the positions of Brazil –, in Glasgow it seems not to be the focus of dispute. The discussion now would only be directed towards the transition of methodologies from the Kyoto Protocol to the Paris Agreement. And Brazil is open to negotiations considering making concessions for the approval of the text on carbon credits.

Furthermore, on Wednesday (10), the United States and China, the two biggest polluters in the world, pledged to work together and with other parties to implement the Paris Agreement and to continue efforts to limit the rise in temperature at 1.5°C.