Post-COP26, Australia risks losing its advantages in carbon crediting and clean technologies without stronger policies to deploy, not just develop, technological solutions.
Following the most influential COP since the introduction of the Paris Agreement in 2015, the spotlight has shifted to federal government and business to seize new opportunities and unlock the barriers to a sustainable and ‘just’ transition.
The Carbon Market Institute (CMI) has released its COP26 Key Takeaways document, welcoming the historic progress made at COP26, while noting the stark realities of the agreements made in Glasgow and the implications for Australia and global carbon markets now set to enter a new phase.
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“Australia now has a once-in-a-generation opportunity to build on its well-established and globally regarded carbon crediting mechanism, and its proposed Indo-Pacific Carbon Offsetting Scheme, to set high standards in the new post-Glasgow global carbon markets,” CMI CEO John Connor says.
“Both of these Australian and regional emissions trading and carbon pricing schemes need to deliver integrity in the credits and in the ambition of the emission reduction trajectory they support. Carbon markets must be means to end that means helping achieve the Paris temperature goals.
“Australia has abundant opportunities in clean energy, technology and natural climate solutions and a decade of considerable experience and achievement in monitoring, reporting and verification. This expertise and experience alone is an important potential export, but policies are required that drive investment in the deployment, not just the development of technology.
“Under Article 6 agreements in particular, COP26 has delivered a platform for greater international cooperation and established a governance framework for international emissions trading. This now needs to be aligned with booming voluntary global and Australian carbon markets to ensure verified emission reductions and other social and environmental benefits are achieved in industrial decarbonisation and natural climate solutions.
“There is an urgent need to mobilise these markets to ensure we maximise climate action this decade. Unfortunately, progress will be limited until there are updated policy frameworks to support this ambition, including reforms to Australia’s Safeguard Mechanism. This is a generational opportunity that can’t be missed.”
CMI’s Key Takeaways from COP26
- COP26 boosted climate ambition but with more action and ambition required this decade in line with the Paris Agreement, Australia and others will be under greater scrutiny at COP27 and COP28.
- Whether its phase down or phase out, the global focus shifts to managing the transition from fossil fuels and the need to do this in a “just” inclusive way.
- New rules for international cooperation and carbon markets provide a platform for high integrity, transparency and comparability, but corporate and national vigilance on integrity and emission reduction will be vital.
- Global capital costs and risks are rising for high carbon-intensive countries, companies and projects amidst increasing investor activity, corporate disclosure requirements and carbon trade mechanism developments.
- There is greater emphasis on the importance of protecting, conserving and restoring nature in achieving net-zero emissions, including forests and other terrestrial and marine ecosystems. Australia is well positioned to become a global leader in nature-based solutions development, knowledge brokering, finance and capacity building but needs to nurture its crediting mechanism integrity frameworks and have a more credible emissions reduction trajectory.
- Failure to deliver on public and private climate finance pledges remains a stumbling block with commitments to double adaptation funding and a “dialogue” on Loss and Damage barely keeping developing countries at the table; this issue to be central to COP27 and future progress.
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The upcoming 8th Annual Australasian Emissions Reduction Summit
CMI’s largest-ever business and climate action Summit on 9 and 10 December 2021 at the Sydney International Convention Centre is a unique opportunity to explore the outcomes of COP26 and its implication for Australian governments, business and the region. Speakers include the Chair of the Pacific Island Forum, Fijian Prime Minister Frank Bainimarama; Co-Chair of the Voluntary Markets Integrity Initiative Rachel Kyte; Australian Energy and Emissions Reduction Minister Hon. Angus Taylor; NSW Treasurer, Energy and Environment Minister Matt Kean and Opposition Energy and Emission Reduction Spokesperson Chris Bowen.
The Carbon Market Institute is the independent industry association for business leading the transition to net-zero emissions. Its over 120 members include primary producers, carbon project developers, Indigenous corporations, legal and advisory services, insurers, banks and emission intensive industries developing decarbonisation and offset strategies.