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Governments are set to take a decisive step at Cop28 towards making a long-awaited global carbon market governed by the UN a reality.

The Paris Agreement establishes ways for countries to “voluntarily cooperate” to meet their climate targets by allowing emission reductions and removals to be traded.

In Dubai, negotiators will finalise the architecture of a new mechanism allowing countries to sell offsets to other governments, companies and individuals under Article 6.4.

It comes at a pivotal time. The voluntary carbon market has faced more intense scrutiny than ever this year with report after report casting doubt over its integrity. But for many, carbon credits remain a valuable tool to channel much-needed finance to developing countries.

The stakes are high for the new system to get it right and correct problems with existing systems. We outline four critical questions for the outcome from Dubai.


Which activities are eligible?

Deciding which activities can produce credits is an important and fraught question.

If the criteria are too restrictive, countries may struggle to obtain any meaningful financial support from the mechanism. Too broad and projects with questionable climate credentials, or other significant environmental and social concerns, will undermine their credibility.

Over the last year, the UN’s Article 6.4 supervisory body has been evaluating the eligibility of carbon removals: activities that take carbon dioxide out of the atmosphere and store it. These can be nature-based, such as planting trees, or engineering-based, like machines to suck CO2.

A Direct Air Capture (DAC) plant operated by Climeworks in Iceland. Photo: Climeworks

Tensions emerged last May when an internal briefing note drafted by the UNFCCC secretariat advised against including technological solutions describing them as “unproven” and potentially risky.

While the supervisory body distanced itself from the document, it angered the industry which responded by flooding the consultation process with submissions putting their case forward.

It worked. The final recommendations, agreed upon after several extended meetings, do not directly encourage or discriminate against any type of activity.

Ministers still need to approve the package in Dubai. While a broad agreement is expected, certain groups may still have issues with it.

Papua New Guinea, representing the Coalition for Rainforest Nations, could be a blocker. It has long argued that credits issued for forest conservation under the Redd+ framework should automatically qualify for the new mechanism.

Most countries and experts disagree. “The intention of the Redd+ framework was never to generate credits”, says Pedro Martins Barata, a carbon markets expert at EDF and a former negotiator. “That mechanism is much less stringent. They should go through the same process of methodology submission and independent evaluation as all the other activities.”


Are the reductions additional and permanent?

As credits are used by governments or companies to compensate for their polluting activities, each unit must represent a real emission reduction. This has been a fundamental and long-standing issue with many carbon offsetting projects.

Among other things, rules need to make sure the activities would have not happened anyways without the carbon finance (additionality) and that any CO2 removed does not re-enter the atmosphere in a short amount of time (permanence).

The Supervisory Body has tackled those policy issues in the recommendations sent to Cop28 for approval.

On additionality, the document says that projects will have to take into account all relevant legislation and produce a detailed analysis of investment barriers to demonstrate that emission-cutting activities would have not occurred without the mechanism.

Experts told Climate Home these provisions should be stringent enough.

New nature fund needs $40m by December to get going

A community ranger standing in a mangrove forest restored as part of a nature protection project in Kenya. Photo: Anthony Ochieng / Climate Visuals Countdown

On permanence, concerns have been raised.

“The text leaves open the question of for how many years a credit is guaranteed to correspond to an actual removal without giving specific thresholds,” says Martins Barata, adding this should be established in further work.

Another contentious point is the possibility of relieving project developers of the duty to carry out permanence monitoring after they stop issuing credits. The risk is that, for example, protected trees could burn in a fire unleashing the stored carbon into the atmosphere.

The recommendations indicate this exemption can apply when a “negligible” risk of the emission removals being reversed is demonstrated.

Jonathan Crook of Carbon Market Watch argued the text could be tightened. “How do you define negligible risk? What sources will be accepted as evidence? These are all open questions that may cause potential issues,” he added.


What happens if a country wants to take back credits?

Article 6 has a provision to ensure that emission reduction activities are not counted twice, by both the seller and buyer, towards their respective climate plans. When a country transfers a credit to a government or a company it needs to deduct that from its greenhouse gas inventory.

As a result, countries need to strike a balance between attracting revenues and being able to meet their own climate plans.

But a contested rule could give struggling governments a way out. In Dubai, negotiators will be discussing whether countries may be allowed to withdraw any credits that have been previously authorised. This could also apply in cases where the projects are causing environmental and human rights violations.

Carbon Market Watch’s Crook said this provision poses a substantial threat. “If a country can revoke credits that have already been traded, and potentially used, then you have a serious risk of double counting,” he told Climate Home. “If revocations are allowed, at the very least they shouldn’t apply to credits already sold.”

Will the new market rescue the reputation of carbon credits?

A lot is riding on the Article 6.4 mechanism because of the impact it can have on the wider carbon offsetting world.

Crook said it needs to set a “high bar”, sending a strong message to the voluntary market that there needs to be improvements.

The new mechanism is set to include some positive elements that currently don’t exist in carbon markets used by corporations.

Already agreed rules have established that 2% of any credits traded in the new market will be automatically cancelled. This means that offsetting will not just be a zero-sum game, shifting emissions cuts from one place to another.

But when it comes to individual projects, experts said it was too early to say if they will have high integrity.

“You can have the best rules but it all comes down to implementation,” said Martins Barata. “They’re off to a good start. But come back to me when they start approving projects”.

If the recommendations are approved in Dubai, the new mechanism may start issuing credits towards the end of 2024.

Paradoxically, the first batch of credits to be traded may pose some of the biggest integrity risks. A process to transition credits created under the Clean Development Mechanism (CDM), the now-defunct UN carbon market established through the Kyoto Protocol, into the new mechanism is well underway.

CDM credits have been widely criticised for failing to contribute to real emissions reductions and causing human rights violations.

The post Four questions for Cop28 to settle about a global carbon market appeared first on Climate Home News.

https://www.climatechangenews.com/2023/11/29/four-questions-for-cop28-to-settle-about-a-global-carbon-market/

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Pre-COP draws attention to Pacific’s climate plight and 1.5C goal

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After witnessing and hearing stories of Pacific islands’ vulnerability to climate change, senior climate officials have promised to strengthen efforts to limit global warming to 1.5C, despite an expected overshoot, and to help the region adapt to rising seas and other impacts.

More than 30 world leaders, ministers, climate negotiators and international development bankers travelled to the sinking atoll nation of Tuvalu on Tuesday before attending the pre-COP31 talks in Fiji, where schoolchildren told them about the effects warming-driven droughts, heatwaves and storms are having on their education.

Australia and the Pacific nations hoped to use the pre-COP to reinforce the urgency of tackling climate change to the officials from around 50 countries who travelled to the region. Fiji’s climate minister, Lynda Tabuya, told a closing press conference on Thursday they had wanted to “bring decision-makers to the climate frontlines”.

Many of those decision-makers said they had been moved by what they had seen and heard this week, and their speeches emphasised the importance of limiting global warming to 1.5C above pre-industrial levels, a key goal of the 2015 Paris climate agreement.

    In September, a UN report acknowledged that the 1.5C threshold will be breached but said temperatures could still be brought back down to that level by the end of the century with stepped-up climate action.

    A month ago, Türkiye‘s COP31 President Murat Kurum told a press conference in the northern Turkish city of Trabzon that limiting global warming to 1.5C “does not really look possible”, adding that “around 1.5C, that will be a success”.

    But after seeing the “anxiety” of children and mothers in Tuvalu caused by rising sea levels, Kurum told reporters in Fiji that 1.5C is a “matter of survival – the survival of cultures, history, memories, your homeland, your homes – it’s that important.”

    “The 1.5C target is in jeopardy and we do not have a single minute, a single day to lose,” he added through an interpreter.

    Jacobo Ocharan, head of political strategies at Climate Action Network International, warned that “words of concern will not protect anyone”. “The Pacific has shown the world what is at stake. Now governments must show they are ready to act,” he said. “[COP31 in] Antalya must deliver decisions that change people’s lives for the better.”

    $1.5 billion for 1.5C

    In Fiji, Kurum echoed the call of Australia and Pacific nations for contributions to the fledgling Pacific Resilience Facility (PRF), which aims to use the returns on its investments to fund community climate adaptation projects like water storage, building sea walls and protecting homes from storms. “$1.5 billion for 1.5 degrees will save the Pacific,” he said. “It’s that easy. Life will continue in Tuvalu. Children will be smiling again.”

    COP31 President Murat Kurum (left) speaks at a press conference on Thursday 8 October alongside Lynda Tabuya, Chris Bowen and Simon Stiell

    Sitting next to him, Fiji’s Tabuya said she was “encouraged” by his words. “$1.5 billion for 1.5. We will hold COP 31 to that,” she said. The PRF has been promised just under $200 million so far – including about $15 million pledged by European and Pacific governments at pre-COP – and is aiming for $500 million by COP31. It has a longer-term target of mobilising $1.5 billion in capital.

    After Pacific leaders on Tuesday aired a litany of concerns about the barriers to accessing the global climate finance system, Kurum joined in at Thursday’s press conference. “Justice in climate finance is essential,” he said. “Resources must reach those in need in a timely and accessible manner, not through a lot of red-tape, and we cannot accept that the same countries should always bear the burden.”

    Plan for easier access to climate finance

    Australian climate and energy minister Chris Bowen, who is COP31’s president of negotiations, also lamented that “the countries that need the finance the most get it the least”. He said he would ask governments and multilateral development banks to support an access to finance plan for small island states and the world’s poorest nations, launched by Australia on Thursday.

    The plan says that while there has been progress in making it easier and quicker to obtain international climate funding, “multiple persistent challenges have continued to limit access to climate finance for developing countries”.

    It adds that the amounts available are insufficient to meet climate goals and stresses the need for “grant-based and highly concessional financing”, especially for adaptation and responding to loss and damage. The plan proposes an annual high-level forum on climate finance access to track implementation.

    The pre-COP summit closed with an emotional plea from Fiji’s host minister Tabuya. Fighting back tears before finally succumbing, she asked delegates to “carry something of the Pacific with you”.

    “Remember the people you met, the stories you heard and why we gathered. This pre-COP draws to a close tonight. Our responsibility does not,” she said to applause.

    The post Pre-COP draws attention to Pacific’s climate plight and 1.5C goal appeared first on Climate Home News.

    Pre-COP draws attention to Pacific’s climate plight and 1.5C goal

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    Australia’s climate credibility tested at Pacific Pre-COP talks, as High Court fossil fuel ruling puts government on notice 

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    NADI, FIJI Thursday 8 October 2026 — As the Pacific Pre-COP talks wrap up and Australia prepares to take the reins of COP31 Negotiations in Türkiye next month, Greenpeace Australia Pacific says the government is on notice over fossil fuel expansion and exports, and must accelerate action to align with a 1.5°C pathway.

    Following yesterday’s landmark High Court ruling that the climate impacts of coal and gas exports must be considered by New South Wales planning authorities, Greenpeace Australia Pacific is calling on the Albanese government to find the “courage, leadership and grit” to chart a new course away from fossil fuels.

    High res images and video from yesterday’s ‘Keep 1.5C Alive’ flotilla in Nadi can be found here

    Speaking from Nadi, Shiva Gounden, Head of Pacific at Greenpeace Australia Pacific, said:
    “The outcomes of this week’s talks are a drop in the ocean given the scale of need, and urgency of the crisis our communities are facing. It is like taking a glass of water to a burning house if we do not urgently act to address the root cause of the existential threat facing Tuvalu, Fiji and all Pacific countries: fossil fuel expansion.

    “The Electrification Pledge must end fossil fuel dependence, not be an end in itself — its ultimate success depends on ensuring electricity comes from renewable sources that displace fossil fuels and align with a 1.5°C pathway. It must be underpinned by justice and backed by finance flowing from polluters to communities.

    “Limiting global warming to 1.5°C is a non-negotiable survival line for humanity and Australia must act. The landmark climate advisory ruling from the ICJ is clear — 1.5°C is the moral, the scientific and the legal limit. Continuing down the fossil fuel path, and failing to align efforts with limiting warming to 1.5°C, is a breach of our international legal obligations, and risks making Australia liable for future reparations from climate-vulnerable nations.”

    Also in Nadi, Dr Simon Bradshaw, COP31 Lead and climate expert at Greenpeace Australia Pacific, said: “The Pacific was never going to be a mere backdrop for Australia in its role as incoming chair of the COP31 climate talks, but where its credibility and commitment to climate leadership would be tested.

    “Here we see communities fighting for their survival and doing everything possible to hold the line on returning warming to 1.5°C. When governments profess to take their concerns seriously, only to then throw more fuel on the fire, the pain and sadness is visceral.

    “This week the High Court of Australia recognised what the Federal Government refuses to — that Australia is responsible for the climate damage of our fossil fuel exports and if governments don’t act, the courts will intervene. The message is simple: this is not someone else’s problem, it is ours.

    “We must now follow other countries in developing a national roadmap away from fossil fuels that ensures a managed wind-down of fossil fuel production, including exports, in line with our legal obligation to help return warming to 1.5°C.”

    ENDS

    Media contact: Kate O’Callaghan in Nadi on +61 406 231 892 (Whatsapp/Signal)

    Australia’s climate credibility tested at Pacific Pre-COP talks, as High Court fossil fuel ruling puts government on notice 

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    New Zealand accused of breaching EU trade deal over climate rollbacks

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    A Dutch NGO has filed the first climate complaint under the European Union’s trade rules, arguing that New Zealand violated the environmental provisions of its free trade agreement with the bloc by weakening its climate regulations.

    The case will test whether binding climate provisions in the EU’s free trade deals can be enforced to hold governments accountable to their climate obligations, experts told Climate Home News.

    The EU-New Zealand free trade agreement, which came into force in 2024, was the first in the world to include legally-binding climate provisions and possible sanctions for violating them, as the EU seeks to use its trade partnerships to advance greater environmental protection.

    Under the deal, both parties committed not to weaken their environmental law to promote trade or investment and to “refrain from any action or omission that materially defeats the object and purpose of the Paris Agreement”.

      At the time the agreement was signed, EU Commission President Ursula von der Leyen said the agreement included “unprecedented social and climate commitments”. But experts warned it was unclear how the Paris Agreement provisions would be enforced.

      The EU included a similar “trade and sustainable development” clause in 14 other bilateral trade deals in recent years, with several others, including with China, awaiting ratification or being negotiated.

      Climate activists at the Dutch NGO Both ENDS argue that the New Zealand government breached these terms by reopening its waters to offshore oil and gas exploration, releasing a climate plan that barely requires any emissions reductions, and passing a law that prevents corporations from getting sued over climate damages.

      “Here, we have a so-called gold standard for free trade agreements with sustainability provisions but we have a trading partner that is doing exactly the opposite: regressing, as all the evidence points to, away from the Paris Agreement,” said Marius Troost, a senior policy advisor at Both ENDS.

      Can the EU enforce its climate trading rules?

      The Dutch environmental group filed the complaint under the EU Commission’s Single Entry Point, a mechanism that allows civil society to request enforcement of the bloc’s trade commitments.

      The EU-New Zealand trade deal includes the possibility of suspending beneficial trading arrangements between the two parties in response to serious violations of its climate provisions. This, Troost said, is a “unique” tool to enforce both parties’ obligations under the deal.

      “This is an opportunity for the EU and New Zealand to show that they are actually serious about these commitments,” he told Climate Home News.

      Civil servants warn fossil fuel exploration could harm New Zealand's climate reputation
      New Zealand Prime Minister Christopher Luxon visits a school in Tonga, August 30, 2024. (AAP Image/Ben McKay)

      A spokesperson for New Zealand’s Ministry of Foreign Affairs and Trade denied any violations of the agreement and said the government hadn’t received formal notice of the complaint. The country, they said, “takes its commitments under the NZ-EU Free Trade Agreement seriously, including the agreement’s environment and climate-related provisions”.

      An EU Commission spokesperson said it will start a preliminary assessment of the complaint and engage with NGO Both ENDS. “Sustainability is a central pillar of the EU-New Zealand relationship,” they added.

      The EU is New Zealand’s second-largest trading partner after China, with about 14% of the country’s exports going to the European market. Agricultural products like meat, diary, fruit and vegetables are the country’s biggest exports to Europe.

      New Zealand is ‘having its cake and eating it’

      Eliza Prestidge-Oldfield, a senior legal researcher at the New Zealand-based Environmental Law Initiative, which is supporting Both ENDS’s claim, told Climate Home News that if the EU upholds the complaint, both parties would begin a negotiation process.

      “The idea is to try and resolve this positively with the New Zealand government acknowledging areas where it needs to change its actions in order to comply with the agreement, and get that change in place as soon as possible,” she said.

      But New Zealand’s right-wing coalition government said it won’t take any directives from foreign actors regarding its policies. Trade minister Todd McClay told local media that it was “not for overseas countries, organisations or lobby groups to tell New Zealand how to meet its obligations”.

        Prestidge-Oldfield argued the complaint isn’t about “Europe telling anyone what to do at all”, but rather stressing the conditions under which they are willing to import goods from New Zealand. “The New Zealand government is trying to have its cake and eat it too,” she said.

        If New Zealand refuses to adjust its policies in line with the agreement, the complaint will be assessed by an independent panel, which can require the country to make changes. If those changes are not implemented, the panel could decide that New Zealand should lose its preferential EU market access.

        A negotiated resolution is more likely, however, with no prior labour-related complaints to the EU having ever reached the panel stage.

        Alexander Gillespie, a law professor at the University of Waikato in New Zealand, said sanctions would be a “last resort”. “This is a test case, which will generate considerable attention – as it is not just about climate change, but how free trade and environmental sustainability have been woven together,” he said in a statement.

        Trade deals as tool for climate accountability

        Experts said the case could set a precedent for how trade deals can be used to hold governments accountable on climate action. The EU has enacted similar “trade and sustainable development” clauses in its trade agreements with Canada, Japan and South Korea.

        While still pending ratification, the EU’s 2024 trade agreement with Mercosur – which encompasses Argentina, Brazil, Paraguay and Uruguay – also includes climate provisions, including a commitment to “effectively implement” the Paris Agreement and promote low-carbon trade.

        In addition, legal researcher Prestidge-Oldfield noted that last year’s landmark advisory opinion on climate change by the International Court of Justice (ICJ) laid out stronger climate obligations for developed countries like New Zealand and could strengthen allegations of violations of the terms of the trade deal.

        “It will be an interesting area to watch how the EU free trade agreement is interpreted in the light of this advisory opinion,” she said.

        The post New Zealand accused of breaching EU trade deal over climate rollbacks appeared first on Climate Home News.

        New Zealand accused of breaching EU trade deal over climate rollbacks

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