The International Chamber of Commerce (ICC) said the business community was “deeply disappointed” that a deal could not be reached on Article 6 of the Paris Agreement as climate negotiations concluded on December 15.
The negotiations—Conference of the Parties 25 (COP25)—marked the longest in history yet “governments failed to match the ambitions of business and other stakeholders regarding the operationalisation of ‘Article 6’ of the Paris Agreement, a crucial missing element of the so-called ‘Paris Rulebook’ agreed at COP24 in Katowice, Poland a year ago,” said ICC in a statement on December 15.
Article 6 of the Paris Agreement aims to promote integrated, holistic and balanced approaches to assist governments in implementing their nationally determined contributions or NDCs through voluntary international cooperation.
This cooperation mechanism, if properly designed, should make it easier to achieve reduction targets and raise ambition. In particular, Article 6 could also establish a policy foundation for an emissions trading system, which could help lead to a global price on carbon.
Under this mechanism, countries with low emissions would be allowed to sell their exceeding allowance to larger emitters, with an overall cap of greenhouse gas (GHG) emissions, ensuring their net reduction. Supply and demand for emissions allowances would lead to the establishment of a global carbon price that would tie the negative externalities of GHG emissions to polluters.
“In other words, by paying a price on carbon, states exceeding their NDCs would bear the costs of global warming,” said ICC.
“Through this flexible approach, GHG emissions would undergo a strong decline, coupled with stimulation for innovative and cleaner technologies and an overall transition towards a low-carbon economy.”
In addition to being a driver for carbon pricing, the successful implementation of Article 6 could create new channels for climate finance and lead to technology transfer and capacity-building.
Majda Dabaghi, ICC’s director of inclusive and green growth, said: “We are deeply disappointed that despite tremendous efforts, negotiators were unable to reach consensus on international market cooperation—vital to enhanced ambition and reaching the net zero emissions target of the Paris Agreement.”
Despite the lack of decision on Article 6, many governments were able to commit to cooperative approaches through their own respective partnerships that adhere to the key principles of the Paris Agreement, ICC added.
During the conference, 84 countries in total signed up to the Climate Ambition Alliance, signaling intention to enhance climate ambition.
The United Nations Framework Convention on Climate Change (UNFCCC) explained that of this, 73 nations have signaled their intention to submit an enhanced climate action plan (or NDC), while 11 nations have started an internal process to boost ambition and have this reflected in their national plans by 2020.
In addition, non-government actors—including 786 businesses and 16 investors, and the 2,100 signatories to the Chambers Climate Coalition—all committed to reaching net zero emissions by no later than 2050, said UNFCCC.
ICC secretary general John W.H. Denton AO said: “Today’s result is extremely disappointing, but we are nevertheless encouraged by the commitments of many governments to raise ambition and ensure advances are made.”
ICC chair Paul Polman called for stakeholders to “dial up the heat” to ensure government ambition aligns with that of business and others. “We cannot stop,” he said.
UN chief on outcome
Meanwhile, UN Secretary-General António Guterres said in a statement on December 15 of the outcome of COP25:
“I am disappointed with the results of #COP25.
“The international community lost an important opportunity to show increased ambition on mitigation, adaptation & finance to tackle the climate crisis.
“But we must not give up, and I will not give up.
“I am more determined than ever to work for 2020 to be the year in which all countries commit to do what science tells us is necessary to reach carbon neutrality in 2050 and a no more than 1.5 degree temperature rise.”
COP26 will take place in Glasgow in November 2020.
Photo courtesy of UNFCCC