The Editorial says that COP29, held in Baku, Azerbaijan, is aptly referred to as the ‘Climate Finance COP’.
A BRIEF HISTORY OF THE UNITED NATIONS CLIMATE CHANGE CONFERENCES: COPS 1-28: https://www.iasgyan.in/blogs/a-brief-history-of-the-united-nations-climate-change-conferences-cops-1-28
The 2024 United Nations Climate Change Conference (COP29) was held in Baku, Azerbaijan from 11 to 22 November 2024. The conference concluded with an agreement on climate finance to support developing nations in mitigating climate change and transitioning to sustainable energy sources.
Plus, some rules and a UN registry were established to facilitate and record the international trading of carbon credits.
In short, the COP29 conference focused on climate finance and helping countries transition to a carbon-neutral economy. A key discussion was on Article 6 of the Paris Agreement, which allows countries to work together to meet their climate goals.
READ: https://www.iasgyan.in/daily-current-affairs/key-takeaways-of-cop29
The Paris Agreement is an international treaty on climate change signed in 2016. It was negotiated by 196 parties at the 2015 United Nations Climate Change Conference. 195 UNFCCC members have ratified the agreement. Iran is the only major emitter that has not ratified it. The United States withdrew in 2020 but rejoined in 2021. Again in 2024, US withdrew from it.
Temperature Goal: To limit the rise in global surface temperature to well below 2 °C above pre-industrial levels and aim for 1.5 °C.
Greenhouse Gas Emissions: Reduce emissions and aim for net zero by the middle of the 21st century.
Climate Change Adaptation: Enhance the ability of countries to adapt to climate impacts.
Finance: Mobilize enough finance for climate mitigation and adaptation.
Each country must determine, plan and report its contributions. There are no binding emissions targets, but countries must exceed previous targets. Developed and developing countries have similar responsibilities under the agreement.
Article 6 enables cooperative approaches to meet climate goals. A crucial component, Article 6.2, facilitates the transfer of Internationally Transferred Mitigation Outcomes (ITMOs) between host and partner countries. This mechanism allows flexibility in achieving Nationally Determined Contributions (NDCs) through tailored agreements. The benefits include:
ABOUT NDCsNationally Determined Contributions (NDCs) are commitments by countries to reduce greenhouse gas emissions under the Paris Agreement, aiming to limit global temperature rise to below 2°C, preferably 1.5°C. To meet this goal, emissions must be cut by 50% by 2030. The Paris Agreement mandates all 195 parties to submit updated NDCs every five years, with NDC 3.0 due before the 2025 UN Climate Change Conference. Initially voluntary as INDCs, NDCs remain non-binding but crucial for climate action. Current emission reduction rates fall short, with only a 5% chance of staying under 2°C unless efforts intensify by 80% beyond NDCs. India’s Updated NDCs
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ITMOs are a mechanism under Article 6 of the Paris Agreement that allow countries to trade emissions reductions, facilitating global cooperation in achieving Nationally Determined Contributions (NDCs). They enable countries exceeding their emission reduction targets to transfer surplus reductions to those struggling to meet their commitments, promoting cost-effective climate action.
Carbon credits, also called carbon offsets, are permits allowing the emission of one ton of CO₂ or equivalent greenhouse gases (GHGs). Based on the cap-and-trade system, companies receive a fixed number of credits, which decrease over time. Firms that reduce emissions beyond their allowance can sell excess credits, creating a monetary incentive for emission reduction. This market-based approach helps achieve national and international climate goals.
The CDM, under the Kyoto Protocol, allows developing countries to undertake emission-reduction projects and earn Certified Emission Reduction (CER) credits, tradable in global carbon markets. Industrialized nations use CERs to partially meet their reduction targets. CDM supports sustainable development and funds the UNFCCC Adaptation Fund through a 2% levy on CERs, aiding climate adaptation in vulnerable nations.
KYOTO PROTOCOLAdopted in 1997 and enforced in 2005, the Kyoto Protocol was the first legally binding treaty committing developed nations to GHG reduction targets. It covered seven major greenhouse gases listed in Annex A: carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF₆) and nitrogen trifluoride (NF₃) (added during the Doha Amendment). The protocol operated on the principle of common but differentiated responsibilities, recognizing historical emissions by developed nations. Its first commitment period (2008–2012) was followed by the Doha Amendment (2012–2020), but consensus was lacking, leading to the transition to the Paris Agreement. The Kyoto Protocol laid the foundation for international carbon markets, shaping climate finance and emission reduction mechanisms globally. |
India, the third-largest greenhouse gas (GHG) emitter in absolute terms, faces the challenge of balancing developmental goals with climate commitments. India’s NDCs include an ambitious 45% reduction in emissions intensity by 2030. However, financial and technical constraints remain a concern. Before COP29, India reiterated its call for $1 trillion annually in climate finance from developed nations.
India launched its Carbon Credit Trading Scheme (CCTS) in 2023, integrating market mechanisms into national policy. While not directly linked to Article 6.2, CCTS enhances carbon credit tracking and verification. India’s experience with Clean Development Mechanism (CDM), voluntary carbon markets (VCM), Energy Saving Certificates (ESCerts) and Renewable Energy Certificates (REC) strengthens its position in the international carbon market.
India has identified 14 key activities for collaboration under Article 6.2, including:
Collaborations with South Korea, the European Union and Japan are being explored for technical expertise and investments.
ITMO transactions under Article 6.2 present multiple advantages for India:
Additionally, New Collective Quantified Goal (NCQG) promotes voluntary climate finance contributions among developing nations. This strengthens South-South cooperation, positioning India as a key partner in assisting other developing nations.
India is exploring ITMO partnerships with African nations, leveraging:
By fostering ITMO transfers, India can enhance regional sustainability, create green jobs and secure carbon market opportunities while supporting African nations in meeting NDCs.
Despite its benefits, ITMO sharing presents significant challenges:
To address these risks, India must ensure:
COP29 and the operationalization of Article 6.2 provide India with a strategic opportunity to mobilize climate finance, advance green technologies and strengthen its global climate leadership. However, ensuring equity, transparency and national interests remain paramount in shaping India’s ITMO strategy for the future.
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PRACTICE QUESTION Q.How can India leverage South-South climate cooperation and Internationally Transferred Mitigation Outcomes (ITMOs) to balance climate commitments with developmental priorities? Highlight opportunities and challenges. |
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