Australia set to lie with some strange bedfellows at Madrid climate talks

Australia is likely to find itself relying on some unlikely alliances at the next round of international climate talks to be held in Madrid next month, as the Morrison government faces opposition from a large portion of the international community on the carryover of surplus Kyoto units.

As part of the plan to meet Australia’s 26 to 28 per cent emissions reduction goal by 2030, the Morrison government is relying on being able to carry over credit from its 2020 Kyoto Protocol target into the Paris Agreement, to shortcut the amount of greenhouse emissions reductions it will need to achieve.

International cooperation on climate change is at a crucial transition point with the previous Kyoto Protocol treaty, which has been in effect since 2008, coming to an end in 2020 when the Paris Agreement comes into force, effectively replacing the Kyoto Protocol.

A key area of contention for the COP25 talks in Madrid will be negotiations around the rules for emissions accounting and international cooperation.

Often referred to under the guise of ‘Article 6’, the section of the Paris Agreement that deals with cooperation between countries, these rules will determine how international emissions trading may work, including the issue of the carryover of surplus emissions permits from the Kyoto Protocol.

Australia is likely to find itself allied with some strange bedfellows on the issue of surplus Kyoto unit carry over, with several former Soviet-era countries, particularly Russia and Ukraine, likely to join Australia in advocating to allow surplus Kyoto credits to be carried over into the Paris Agreement.

The combination of an economic downturn following the collapse of the Soviet Union and a decision to use the year 1990 as the baseline year for most emissions reductions pledges under international agreements, has led to many former Soviet countries accumulating a large surplus of emissions reduction permits.

Countries like Russia and Ukraine see an opportunity to sell these surplus units to other countries, and will not want to forego this value without a fight. The same issue resulted in a very public objections from Russian negotiators at the COP18 round of talks held in Qatar in 2012.

Australia heads into the talks having been identified as one of the worst performing members of the G20 in terms of climate action by a collective of 14 think tanks, in a new analysis released ahead of the Madrid talks. Australia was criticised for its weak emissions reduction targets and a lack of strong policy that puts the achievement of the inadequate targets into doubt.

In a media briefing, researchers from the World Resources Institute indicated that these proposals may face stiff opposition from several substantial negotiating blocs, including the European Union, the Latin-American group, the African Group and the Alliance of Small Island States, who all oppose the carryover of surplus credits and see is as a way of reducing the strength of emissions reduction pledges made under the Paris Agreement.

“For the majority of issues, you’d find that the African group, Latin American states, the small islands, as well as the European Union, and some of them their local countries are aligned on. So, you know, it’s very few countries that are most aligned on the specific issues,” Mandy Rhambaros, the article 6 negotiator for South Africa told the WRI media briefing on Thursday.

“Those that have argued against the use [surplus Kyoto units] would say that there wouldn’t be an adequate signal to catalyse emission reductions,” World Resources Institute senior associate Kelly Levin added.

“But the proponents of using the older units towards post-2020 targets suggest that it would lower costs and ensure that existing efforts aren’t discontinued. And certainly those that are advocating for that have benefited more significantly from the Kyoto Protocol mechanisms in the past, but that would really have tremendous implications for the signal that Article Six creates to reduce emissions.”

Emerging countries like Brazil, India and the Arab Group are similarly advocating for the carryover of surplus units generated under the Clean Development Mechanism established under the Kyoto Protocol.

Countries have argued that if the carryover of permits is prohibited, that overseas investment under initiatives like the Clean Development Mechanism will come to a standstill, as the financial incentive to do so is eliminated.

But with just a year left to run in the Kyoto Protocol, it is arguable exactly how much investment would be realistically impacted.

The volumes of these surplus emissions permits runs into the billions of tonnes, and while allowing their carryover into Paris would substantially ease the burden of meeting emissions reduction pledges, it would significantly undermine the ability of the Paris Agreement to actually address global warming.