New Delhi: India, China, Brazil and some other developing countries have failed to convince the world at the UN climate change negotiations named COP25 to evolve rules for trading internationally their carbon credits which help nations decarbonise economies at lower cost.
Almost 200 countries failed to agree unanimously on Article 6 of the Paris Agreement rulebook concerning the carbon markets system as the lengthy negotiations concluded in Madrid on Sunday, two days past the official deadline.
The developed world took the stand of not allowing the 'junk' carbon market, which allows buying and selling of carbon emissions, and emerged under the Kyoto Protocol adopted in December 1997 to continue in the exiting mechanism under the Paris Agreement that is coming into force from January 2021.
They blamed faulty mechanism and loopholes in the existing system that failed to prevent double-counting of carbon credits and wanted a new mechanism to be put in place.
Several countries like India were demanding to carry forward the old carbon credits earned also by companies to meet new climate targets.
The carbon credit system allows countries to reduce their emission reduction targets by accumulating and trading in carbon credits.
As per rough estimates, nations hold close to 4 billion unsold certified emission reductions (CERs). India has a depository of 750 million and China has much more than India.
One CER equals one tonne of carbon dioxide. The CERs help companies earn billions of dollars by trading them. Currently, there is a market but no political platform.
Climate experts told IANS that the only saving grace for India, China and Brazil and some other countries was that they did not allow the developed nations to completely reject the carbon trade mechanism, still a key component for the full operationalisation of the Paris Climate Change Agreement.
This issue will now be discussed in the next round of UN climate negotiations that will take place in Bonn, Germany, in June 2020 and later in Glasgow, Scotland, at the COP26 in November.
"The international community lost an important opportunity to show increased ambition on mitigation, adaptation and finance to tackle the climate crisis," said UN Secretary-General Antonio Guterres.
In India, 1,669 projects have been successfully registered under the Clean Development Mechanism (CDM) mechanism, millions of certified emission reductions (CERs) credits remain unsold with collapsing of the CDM market.
Sam Van den Plas, policy director at Carbon Market Watch said: "People all over the world are asking for urgent action and several countries only offered accounting tricks and cover for climate inaction."
"These loopholes are nothing but a way of cheating the climate and betraying the people. What was on the table here could have been a real disaster for the Paris Agreement. We need carbon markets to increase climate action, not undermine it, to protect the environment and to uphold human rights and benefit local communities."
Future carbon market negotiations will need to deliver robust rules, said Sam Van.
A UN report released last month warned that the world is currently headed toward a 3.2 degrees temperature rise by the end of the century, urging industrialised countries to raise their ambition to enact deeper emissions cuts.