Carbon credit rules seen being major issue at COP26

Rules for carbon credit markets were a big sticking point during the negotiations at the recent COP25 summit in Madrid and the debate will continue at this year's COP26 summit in Glasgow.

Some developing and developed countries are concerned about how issues such as double-counting will be dealt with, as well as the fate of the Kyoto protocol.

“Countries like Brazil and Australia had doubts over the concepts that were being handled on the issue of double counting,” Julia Arana, Chile country manager for ComunicaRSE, said at a review of the COP25 conference at a Deloitte-organized event in the Chilean capital.

One of the main concerns over carbon credits, which are generated through emission reduction projects, is that a country or company selling a carbon credit might claim the underlying emissions reduction for itself, while the buyer of the credit also claims the same reduction.

In such a situation, the party selling the carbon credit could increase its emissions, while the buyer lowers them by the same amount.

Arana said that rules for this issue were discussed in Madrid and at one point they were part of a draft agreement, but the discussions ended up being pushed back to the summit in Glasgow, which will be held in November.

On the subject of the Kyoto protocol, Arana said that Brazil and Australia also wanted to know if the rules for carbon credits established in 1997 will be fully replaced by those set in Article 6 of the Paris Agreement, whose implementation has not been agreed upon yet. 

Other issues that will be discussed in Glasgow include how much financing will be required for developing regions, such as Latin America, to reach their emissions goals.