COP27 is just around the corner. This month, world leaders (and observers) will come together in Sharm el Sheikh, Egypt, for two weeks to continue climate negotiations.
So, what exactly is COP27? And what does it mean for the voluntary carbon market (VCM)?
COP stands for ‘conference of the parties’ and is the supreme governing body of an international convention composed of member states’ representatives and accredited observers. The United Nations Climate Change Conferences serve as the formal meeting grounds for the United Nations Framework Convention on Climate Change (UNFCCC) COP. The parties generally meet every year, and this year’s COP will be the 27th convened. Fun fact: the first COP was held in Berlin, Germany — where CEEZER is headquartered! — in 1995.
The UNFCCC was signed by 154 states at the United Nations Conference on Environment and Development (UNCED), aka the Earth Summit, in 1992. The Kyoto Protocol, signed in 1997 and in place from 2005 to 2020, was the first implementation of measures under the UNFCCC. This was superseded by the Paris Agreement, which entered into force in 2016.
At each COP, the parties review the implementation of the convention, and associated legal instruments, assess its progress in dealing with climate change and take decisions necessary to enhance its effectiveness into the future. Simplified, the goal of COP negotiations is to accelerate the reduction of greenhouse gas (GHG) emissions, build resilience and adaptive capacity against the impacts of climate change and deliver on climate action finance commitments.
Amongst broader issues, these decisions may directly or indirectly influence how the VCM operates. Article 6 of the Paris Agreement is of particular relevance as it enables ‘cooperative approaches’, including market and non-market mechanisms for countries to achieve their nationally determined contributions (NDCs) to carbon reduction. However, up until recently, negotiators struggled to align on detailed rules for the functioning of such mechanisms.
Last year’s COP26 in Glasgow, Scotland saw the agreement of the Article 6 Rulebook, which now provides clarity through a procedural framework for carbon credit transactions. This was a significant step forward in establishing a global compliance carbon market, but many issues still remain unaddressed, particularly for players in the VCM.
It is expected that continued discussions at COP27 will provide further clarification around Article 6, particularly regarding: creation of centralised administrative infrastructure; eligibility criteria and certification standards for credit issuing projects (including emissions specific and broader ESG standards); methodologies for corresponding adjustments; and, the interface between international and voluntary carbon markets (including clarification around private sector participation and disclosure obligations).
For players in the VCM, COP27 presents a real opportunity to engage on the most pressing climate issues, grow our ecosystem and consolidate our role in enabling the Net Zero transition. CEEZER’s work is focused on providing a platform to connect suppliers (project developers) of high quality carbon credits with buyers wanting to build well-informed portfolios to maximise climate impact along their decarbonisation journey. As such, we are looking forward to being in attendance at COP27 to see first hand how these discussions unfold. We will be sure to provide live insights into the event via our social media channels, and will actively work to integrate developments into our marketplace.
If you would like to find out more about our role in enabling a transparent and impactful VCM, please visit www.ceezer.earth. If you would like to organise a meet-up at COP27, please reach out to us at firstname.lastname@example.org.