What are carbon markets and how can they be used to mitigate climate change?
Different nations have different capacities to cut carbon emissions. Carbon markets allow countries to trade their emissions allowances in the most cost-effective way for them, meaning that reductions are made as cheaply and efficiently as possible.
Carbon markets may have the potential to successfully facilitate global emissions reductions, as long as there are specific parameters for their use and enough actors are involved in the scheme.
However, there are problems associated with carbon markets. Firstly, it is difficult for carbon markets to work across global markets, as opposed to within smaller markets such as the European Union. Also, market-based mechanisms are slower and arguably more complex than other measures such as regulation and taxes.
Moreover, numbers are vulnerable to manipulation and emissions could be double counted. Double counting is when an emissions reduction is recorded by both the selling and buying country, therefore suggesting a greater reduction than has actually been achieved. These risks are very likely to be addressed at COP26.
Hear more on carbon markets from Professor David Reay and Dr. Sarah Ivory
What role does Climate Finance have in COP26 and global climate negotiations?
Climate finance is likely to be high on the agenda at COP26. Although a commitment was made in 2009 to dedicate $100 billion per year by 2020 to climate change action, the target so far remains distant.
Investing in climate action, including both mitigation and adaptation, is necessary imminently to avoid a higher cost in the future. Yet, because the commitment has not been honoured, there is a deficit of funds available in less economically developed countries to support their adaptation needs.
At COP26, discussions are likely to focus on what has been achieved so far and what must be done next in order to meet and surpass climate finance commitments. Also, there will be a careful consideration of how money is being spent, and how we can ensure that the worst affected by climate change are prioritised in the allocation of funds.
Learn about the role of climate finance at COP26 from Dr. Jessica Omukuti, Professor David Reay and Professor Elizabeth Bomberg
What makes a successful climate finance project?
Success is subjective. A successful project could mean positively influencing the development of climate change policy, or significantly contributing to mitigation targets.
Evidence shows that locally-led initiatives tend to be more effective in achieving their objectives. Local people are directly impacted by the effects of climate change and are also likely to have valuable knowledge on their environment. As a result, it is expected that there will be a push towards locally led projects at COP26.
Listen to Dr. Jessica Omukuti discuss what makes a successful climate finance project
How are businesses involved in COPs?
At COPs, businesses often seek to persuade politicians, negotiating teams and countries on policy in a variety of different ways. They may do this explicitly, such as by hosting side events, but sometimes, inappropriately, they can try to exert influence more secretly.
Some may argue that corporations should be completely left out of political decision-making. However, getting businesses involved can be seen as an effective strategy in tackling the climate crisis. Finding solutions which are good for both the planet and business can result in widespread support. Moreover, corporations may also be able to act more quickly than politicians to implement impactful changes.
Watch Dr Sarah Ivory explain more about how business actors have had influence in the past at COPs.
What role do businesses have at COP26 specifically?
Eleven businesses are sponsoring COP26:
- Scottish Power
- NatWest Group
- National Grid
All COP26 sponsors have been subject to stringent science-based targets by the government as a condition of their involvement. However, it remains important to identify and eliminate greenwashing where it occurs, in addition to promoting transparency within corporations.
For more information on the role that businesses have at COP26 specifically, hear from Dr. Sarah Ivory