Against the background of the postponement of the COP26 to November 2021, the International Carbon Action Partnership (ICAP) and the International Emissions Trading Association (IETA) have organized an alternative format to engage relevant stakeholders of the international community in discussions and exchanges centred around carbon markets. Held 11-12 November 2020, the Carbon Markets Virtual Pavilion aimed at replicating regular COP carbon markets side events, which in recent years have become an important platform for organizations and stakeholders to engage, share knowledge, build capacity and networks. The Carbon Markets Virtual Pavilion featured a rich programme ranging from plenary sessions to panel discussions and more interactive formats, along with an informal carbon markets networking arena. The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) was involved in a number of activities throughout both days of the pavilion.
One topic of great interest were the cooperation mechanisms enshrined in Article 6 of the Paris Agreement. In a BMU-organized event, coordinators of the Eastern and West African Alliances on Carbon Markets and Climate Finance provided insights on the progress in enhancing regional Article 6 readiness and shared key challenges. While the finalization of the Article 6 rulebook is still pending, Article 6 pilot initiatives are already testing new concepts on the ground all over the world. In another BMU event on Developments in Article 6 Piloting, experts shared insights on global Article 6 piloting and enabling initiatives and presented experiences of stakeholders. These early experiences can also serve as an important reference point for negotiators. The question of how to Use Cooperative Approaches to Trigger Transformational Development was the focus of an event organized by the Federal Environment Agency (UBA). This session made clear that market mechanisms can enhance transformational change by strengthening sustainable development if the project is aligned with concrete SDG strategies. Besides a definition of transformation for Article 6, recommendations were shared how Article 6 activities could be transferred to the unconditional part of the NDC after the crediting period and continue to mitigate under national responsibility.
Another relevant topic was carbon pricing. A number of events focused on emission trading at the national level but there were also discussions on the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and carbon pricing for international shipping. Market-based approaches will play a significant role in reducing emissions from both sectors, aviation and shipping. While the aviation sector has already put in place a market-based measure, the International Maritime Organization (IMO) is still looking at carbon pricing options in order to curb the sector’s emissions. In the panel discussion entitled Carbon Pricing and Shipping: Past, Present and Future, experts highlighted the complexity of carbon pricing, the need for alternative fuels in the maritime sector and other technical challenges. The aviation sector was covered by another session. In the panel discussion Where will CORSIA fly? experts discussed how the COVID-19 pandemic has affected the aviation sector and explored the implications of the recent decision by the ICAO Council to change CORSIA’s baseline to 2019 for the pilot phase of the scheme.
With a large number of participants and numerous events with insightful discussions, the Carbon Markets Virtual Pavilion enabled experts and practitioners from all over the world to exchange latest developments and current challenges in the field of carbon markets.
For more information and recordings of all sessions, please visit the Carbon Markets Virtual Pavilion website.