The quiet rise of the alternative to carbon markets

Beyond the hype around voluntary markets, non-market approaches to emissions reductions could be what delivers real progressive action

On November 13, after two weeks of negotiations, Parties to the Paris Agreement adopted a programme on non-market approaches to Article 6 of the Paris Agreement. 

Overall, Article 6 deals with “voluntary cooperation” between countries in efforts aimed at implementation of Nationally Determined Contributions (NDCs). Such cooperation could be in the form of both market or non-market approaches. And while many developed countries are pushing for carbon markets—the EU cited the conclusion of rules for Article 6 as one of the three things it is “determined to do” in its COP 26 position paper—some others, particularly those belonging to the Independent Alliance of Latin America and the Caribbean (AILAC) group, are pushing for an alternative, i.e. non-market approaches.

Broadly, market mechanisms would entail trade in credits between countries that overachieve their targets and those that underachieve. As for non-market approaches, action could be in the form of cooperation for forestry and clean oceans, be it intergovernmental or otherwise. 

The resolution adopted on November 13 is based on a proposal by Bolivia, which was then put forth by the COP26 Presidency in a draft text. “Because of COVID-19, we are living in a world where developing countries will not be able to invest in institutional capacities [for non-market approaches],” said Sergio Arispe, one of the negotiators in the Bolivian delegation at COP26. So, he explained, “we want the Convention to bring forth arrangements which we call the Glasgow Committee on Non-market Approaches.” 

Broadly, the committee is meant to assist countries to access funding for non-market approaches to Article 6. For instance, it could assist the establishment of a network under the UNFCCC where countries can register projects based on their NDCs, which both public and private finance could support. Bringing all projects under the Convention will mean commonality. Right now, there are many bilateral arrangements under Article 6.8, which even countries like the US and Canada have set up. But, Arispe said, “each initiative has its own metrics and there’s no transparency in all the money flow.” 

At a COP26 plenary held by the Presidency, an Argentinian representative extended support to the Glasgow Committee on Non-market Approaches. The Bolivian proposal also has the support of Like Minded Developing Countries (LMDCs). 

“Developed countries have been trying very hard to open markets [for carbon trading]. But global markets are not a solution,” said Diego Pacheco, head of the Bolivian delegation to UNFCCC and spokesperson for LMDCs. So the Bolivian delegation and LMDCs have requested for “a balance” with non-market approaches to Article 6, Pacheco said.

It’s about more than carbon

Elaborating on how non-market approaches could benefit countries like India, Chandra Bhushan, a public policy expert and founder/CEO of International Forum for Environment, Sustainability & Technology (iFOREST), said that non-market approaches to Article 6 are “very important” for India’s agricultural sector. 

“Carbon content of India’s [agricultural] lands have gone down by around 40% in the past few decades,” Bhushan said. That India has one of the most depleted soils in the world is well-known. And so, Bhushan said, “India should work on enhancing soil carbon with techniques of non-chemical farming and improving biodiversity and water retention.” These approaches could be modelled based on cooperation rather than carbon markets. “We do not want all carbon sequestration activities to become a part of markets. It’s about land and forests and community resilience. This is more than carbon,” Bhushan added. 

Non-market approaches have also been outlined for oceans as carbon sinks and practices like agro-ecology and ecosystem restoration.

“To move forward as a species, we need to talk about a different civilisational model. One that you can find in countries like India and Bolivia and even in [some communities in] developed countries, which are being ignored,” Arispe said.

This article was developed with support from Internews’ Earth Journalism Network and the Stanley Center for Peace and Security as part of the Climate Change Media Partnership (CCMP) Program.

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