- Seek solution to Article 6 at the climate summit in Glasgow
- Concerns about double counting emissions
- Focus on the role of finance in the exit from fossil fuel lending
BOSTON / LONDON, Oct 26 (Reuters) – World leaders want the upcoming United Nations climate change summit to resolve issues that have hindered the use of carbon pricing to reduce global emissions, to the role of business in the To strengthen global warming slowdown.
Executives, trading groups and policy experts say hopes for an agreement are growing after negotiators failed to reach an agreement at the 2019 Madrid Summit on how countries can account for international carbon trading under Article 6 of the Paris Climate Agreement.
The lack of international agreements has hindered the development of carbon pricing systems. The ability to measure the economic cost of emissions is a top priority for companies in many industries whose executives want to reduce greenhouse gases, said Rich Lesser, global chairman of the Boston Consulting Group.
For executives “it would make economic sense to look for solutions and alternatives if there were a global carbon price,” said Lesser.
Dan Byers, who will represent the US Chamber of Commerce’s major trade group at the Glasgow Summit, called the final Article 6 resolution “long overdue” to address technical issues such as how countries can monitor and verify carbon emissions.
He added that one factor favoring a deal is the climate focus of US President Joe Biden, who had reverted to the terms of the 2015 Paris Climate Agreement after his predecessor Donald Trump left the deal.
“It is extremely important in the long run that the Biden government supports Paris and sits at the table,” said Byers.
Other topics that business leaders will follow at the meeting starting October 31, include new commitments by national leaders to reduce emissions and how much money is being made available to fund sustainable development in emerging economies.
Carbon pricing plans can be extensive, including carbon taxes that companies charge for emissions or carbon trading markets that limit how much companies or countries can emit but allow them to trade permits that exceed those levels.
Many companies expect carbon pricing plans to help them deliver on the now widespread “Net Zero” promises, said Kelley Kizzier, vice president of the Environmental Defense Fund, a Washington advocacy group and former co-chair of the Article 6 negotiating group previous climate summits.
Some of the specific issues to be resolved in Glasgow for Article 6 include how to prevent two countries from counting the same emission reduction and how new carbon markets could help fund developing countries’ efforts to adapt to climate change, she said. Even if an agreement is reached, companies will still be busy cutting their emissions, she added.
Just because a goal is set: “There are no rainbows and butterflies,” said Kizzier.
Aside from carbon pricing, leaders are more divided on other issues that will be the focus in Glasgow, such as the future role of fossil fuels in the global economy.
For example, a group of investors including PIMCO, State Street Corp (STT.N) and French asset manager Amundi (AMUN.PA) have urged countries to take steps, including increasing their emissions reduction commitments and ending fossil subsidies, and es issued separate calls to international banks to stop funding fossil fuel projects.
But energy managers say fossil fuels still have a role to play in the energy transition. New natural gas plants in emerging markets would produce fewer emissions compared to existing coal-fired power plants, said Aaron Padilla, a policy director at the American Petroleum Institute, which includes major energy companies ExxonMobil Corp (XOM.N), Royal Dutch Shell (RDSa.L) and Norway Equinor (EQNR.OL).
“There is still a lot of room for natural gas, especially to replace coal as a source of production,” said Padilla.
Financial firms are exposed to their own pressures. Companies with total assets of $ 90 trillion, known as the Glasgow Financial Alliance for Net Zero, have urged governments to set broad net zero targets and price emissions, for example. Continue reading
But the group includes banks that are still backing fossil fuel projects, criticizing that they and Alliance Chairman, UN Special Envoy Mark Carney, missed a chance to force tougher measures. Richard Brooks, activist group’s climate finance director Stand.erde, said more should follow the example of France’s Banque Postale, which said it would shut down the oil and gas sector completely by 2030. read more
“Many of the banks that are part of the alliance get praise and green cover but don’t change their day-to-day financial practices,” said Brooks.
When responding to the criticism, Carney said in a statement emailed that member banks need to set tentative carbon reduction targets and decarbonization plans for 2030. “GFANZ has launched an ambitious work package to accelerate the implementation and actions outlined at COP26,” he said.
Reporting by Ross Kerber in Boston and by Simon Jessop in London Editing by Matthew Lewis
Our standards: The Thomson Reuters Trust Principles.