Every year, emissaries from nearly 200 countries fly somewhere on the globe to hammer out the world’s plan for climate change. Kyoto, Copenhagen, Paris. This year, it’s Madrid.
Moved from Santiago, Chile at the last minute due to unrest, the world’s climate negotiators have been tasked with figuring how to turn the 2017 Paris accords—with the goal of preventing global average temperatures from rising more than 2°C above pre-industrial levels—into a reality.
It’s not going all that well, say sources on the ground. More than halfway through the two-week negotiations, which began on Dec. 2, much is left undone—especially compared to previous conferences of the parties (or COPs, as they’re known) under the United Nations Framework Convention on Climate Change.
The challenge grows each year as most nations fail to rein in emissions. A UN report last month showed the world is now headed toward a 3.2°C (5.8°F) temperature rise by the end of the century. Many are now urging industrialized countries to up their next set of commitments for 2020 to meet the challenge.
To do this, one of the big pieces of unfinished business in Madrid is a rule book for carbon markets, a system for reducing greenhouse gas (GHG) emissions in one place, and converting those reductions into credits that can be traded. “Markets are usually the overlooked part all this,” says Nat Keohane, a senior vice president at the Environmental Defense Fund who is attending COP25. “But here it’s front and center.”
In Madrid, the UN has a chance to establish accounting rules for countries to trade emission reductions to ensure a net reduction in atmospheric GHG emissions. A similar scheme by the US reduced acid rain from sulfur dioxide in the 1990s—and did it far faster and cheaper than anyone expected. Carbon trading schemes (with varying degrees of success) are up and running in Europe and parts of the US. Done well, they can deliver cheap, effective emission reductions. Done poorly, they’re worse than no market at all.
Not surprisingly, the negotiations are contentious. Brazil wants to count its emission reductions twice. Australia is hoping to carry over emission reductions credits earned under the 1992 Kyoto Protocol toward future targets under the Paris accords. More than 100 nations have opposed this latter move as undermining global emissions reduction efforts. Through the end of the week—the meeting ends on Dec. 13—negotiators will have to chart a way forward.
Outside negotiating rooms, civil society groups have come out against market mechanisms and the deepening involvement of corporations in the process. This year has seen a swelling corporate presence at COP with billboards (and sponsorships) across the venue, according to Taylor Billings at the civil advocacy group Corporate Accountability.
Calling it a “corporate takeover” of COP25, she and others object to proposals that would allow fossil fuel companies and countries to use offsets to emit GHG, and potentially avoid liability for future losses and damages inflicted by climate change. In an unusual occurrence, COP organizers ejected more than 300 people protesting the proposals from the meeting’s plenary.
Not everyone sees corporate involvement as a downside. David Waskow of the environmental group World Resources Institute said many companies at COP25 have taken climate change “very seriously.” It’s become a strategic imperative for some industries as buyers and investors choke off capital to high-emitting firms. A total of 177 firms—including Procter & Gamble, Pfizer, Cisco, and Marks & Spencer—have now signed up for emissions targets across operations and supply chains that put them in line with the 2°C target, and net-zero emissions by 2050.
Countries, if they’re going to live up to their agreements under the Paris accords, will have to do the same. I’ve attended several COPs since 2007. The closed-door negotiations are often tedious, tense, and spill over into the dawn hours as diplomats wrestle over language to avoid going home empty-handed. The big decisions about markets in Madrid will be no different.
Have a great week ahead. Please send feedback and tips to mjc@qz.com.