I recently attended COP27 at Sharm El-Sheikh in Egypt supported by the Irish Environmental Network, and representing Friends of the Irish Environment (FIE). For some reason I couldn’t upload my blogs directly to this site while I was there, and they were hosted instead on the FIE website. I’m reposting them here now, and will update them shortly, as I was quite unwell for the last week of the COP and fell behind!
I arrived in Sharm El-Sheikh late on Saturday night, after a long journey starting in Waterford at 9am. The Egyptian regime is security-obsessed, with vast numbers of young men recruited to work as police and security agents to monitor the huge numbers of visitors to the COP. They are everywhere, at every roundabout, parked every 500m along the roadsides which have hardly any traffic, with isolated individuals standing in their black suits in fields along all the main routes to the COP. For all the agents watching us, there are very few who are actually delivering services such as public transport or catering and so on to help delegates find their way. The shuttle bus – supposed to be electric – is anything but, runs infrequently and won’t cope with the deluge of participants expected later this week. The venue itself is typically vast but poorly mapped and there are very few seated areas or coffee points, even where the negotiations proper are taking place. The contrast with previous COPs is remarkable. And then there’s the app. The Guardian reported today that the COP27 app (which is not really that useful given that the UNFCCC has its own ‘negotiator’ app with the same functions) requires a huge number of extraordinary permissions giving the host country access to your email, texts and location. I downloaded it without realising that and have since deleted it but God knows what is still on my phone.
And then there’s the place. Sharm El-Sheikh is not a town or a city or any kind of recognisable urban form. It is a series of palatial mega-resorts plopped into the desert alongside 8-lane highways between the sea and the airport. There’s a downtown of sorts somewhere further away but none of the shuttle buses servicing the COP hotels go there. There is evidence of the economic crisis that hit Egypt after 2011, so abandoned half built developments are everywhere. It is pretty ghastly, the sort of place you associate with dystopian fiction. Dust, heat, armed soldiers and mosquitos. The empty highways have narrow footpaths but the streetlights are built into these, so you basically have to walk on the road to go anywhere. Someone decided to install some token cycle lanes probably for the COP and while it would actually be quite safe to cycle as there is so little traffic, there are no bicycles anywhere to be seen. It’s the police, not the traffic, you’d be scared of cycling alone.
The other thing that is disconcerting is the complete absence of women. It’s as if Egypt is a male-only society. Men do everything in the economy, which means that women must be entirely economically dependent on them never mind all the other privations they endure. But so far they are completely invisible. My hotel is full of men, run by men. They are the cooks, the hosts, the receptionists, the gardeners. I find this very troubling and disconcerting. We take so much for granted in Europe. There are so many countries in the world where millions – billions even – of women live in conditions akin to slavery.
I went to the venue yesterday Sunday to register and spent the day pottering about finding my bearings. This was a good idea as the signage is very poor and there is no physical map available to hand out to delegates. Most of the side events kick off tomorrow including the ones that interest me most. The main negotiations focused on agreeing the agenda with a big push from developing countries to include loss and damage as an agenda item. A compromise wording was finally agreed that will create a new work programme to accelerate loss and damage finance and also the agreed adaptation finance, but it’s far short of what vulnerable countries were looking for in terms of compensation for irreversible losses.
Later this evening I will do my first interview with Newstalk FM. I’ll be doing a short daily slot at 4.45 or 5.20pm for the next 2 weeks. Hopefully I’ll get the opportunity to meet a couple of other Irish civil society reps that have already arrived. And we’re trying to get a meeting with the Taoiseach tomorrow. He’s addressing the high level summit and his speech will be important because while Ireland always presents itself as a ‘good guy’ at the UN – progressive and pro-climate action – the reality on the ground is that we are failing to implement our own laws and policies. I hope that if we get a meeting we will be able to impress upon him the importance of scaling up domestic action so that we can say that Ireland is truly doing its ‘fair share’ of the global effort.
As the COP proper started yesterday (Monday), thousands of new attendees have arrived at Sharm El-Sheikh putting the already rickety bus service under severe pressure. Organisationally speaking the host country doesn’t appear to be on top of things: apparently some Heads of State were meeting at a high-level summit meeting yesterday only for the food to run out. I’ve always associated the COP with seamless logistics at least where the UNFCCC secretariat is in charge. Not so here. And for the rest of us, prices have been doubled or tripled making an ordinary meal extraordinarily expensive: my bog-standard buffet at a 2-star hotel has been bumped up from c.€8 to about €15. A cheese sandwich at the conference centre cost me €11 making inflation at home seem like a trifling worry. Most of us are trying to smuggle out bits of bread and salad from our hotels to manage throughout the day without having to resort to the extortionate $20 buffet lunch at the venue.
Apart from these inconveniences, the side events started today, giving us a dazzling range of talks and discussions to choose from. I started the day with a side event organised by the International Emissions Trading Association on the governance of climate neutrality claims. There is an interesting report by the Wuppertal Institute highlighting the different approaches that countries are taking to regulating corporate environmental claims. France, Germany and Australia have strong regulatory mechanisms in place to prevent ‘greenwashing’ but Ireland has no guidance or mandatory requirements in place whatsoever. This means that the reputational risk to Irish companies seeking to validate their green credentials is quite significant, especially for exporting companies. If they can’t stand over their claims, consumers and importers may end up taking their business elsewhere.
Yesterday also saw the conclusion of the high-level segment where the Taoiseach delivered his speech to the plenary. His speech was good: he noted the importance of acting on climate change for the sake of future generations, and the need for leadership to bring about transformative changes. The story at home, however, is markedly different. While the messaging coming out of the government here at the COP is focused on Ireland’s contribution to international cooperation through climate finance and loss and damage, the real story is that we are not on track to meet our own legally binding emission reduction targets. Furthermore, some government policies are still driving emissions upwards instead of downwards.
No sector gets more protection from the inconvenient truths of climate science and action than agriculture. An opinion piece in the Irish Independent yesterday by Dr. Catherine Conlon highlighted the double-speak coming out of the government which is seeking to present itself as a climate leader when in fact it is championing Irish beef and dairy exports as “environmentally benign”. To have the leading authorities of the state – Teagasc, Bord Bia and the Department of Agriculture repeating these lines in full knowledge that they are completely refuted by EPA data should be a national scandal. It represents denial of the facts of the EPA’s most recent environmental assessment which showed that agriculture is the leading cause of water pollution, ammonia emissions, biodiversity loss and the largest sectoral contributor to greenhouse gases. I had the opportunity later to mention these inconvenient facts on Newstalk’s The Hard Shoulder and on Drivetime RTE, where Brian Leddin TD tried very hard – but failed – to disagree with my assessment that Ireland was falling well short of what is required to stay within the carbon budgets adopted by the Dáil.
The Taoiseach’s speech was meant to yield some positive coverage, with an announcement of €10m funding to the Green Shield initiative, an insurance fund for low-income countries vulnerable to climate impacts. Notably, this funding is coming out of the promised €225m in climate finance by 2025, and NGO experts have claimed that this is not a suitable mechanism to deal with loss and damage, which is the key dividing line between developed and developing countries at this year’s COP. Given that it’s not “new” money but a diversion of existing promised finance, there is little to celebrate in this announcement. Nor does it address the substantive claim by developing countries that they are entitled to compensation for irrecoverable losses and damage due to climate change.
I was privileged to get to meet the Taoiseach alongside Professor Hannah Daly and 4 of her UCC colleagues. Interestingly this was the first time I had the opportunity to meet the Taoiseach of the day at a COP – every other time we had to fight for meetings with the relevant climate minister. We decided to raise mitigation with him as other CSO delegates were discussing loss and damage, finance and youth, and Hannah pressed upon him the need to treat the issue of rising emissions with greater urgency, in a manner akin to the way that Covid was handled by the government. The Taoiseach listened carefully but replied along the lines of: this is very politically challenging, we need to bring people along with us and create bottom-up instead of top-down solutions. Cop out or what?
The data tells a different, more alarming story. Modelling carried out by Hannah Daly at UCC shows that every sector is off target. Agriculture emissions are up 3% in 2021, transport up 6% and electricity generation is up 18%. All sectors need to be on reduction trajectories and any increase – or even stabilisation – means higher percentage reductions later on. For example, if emissions in the residential sector don’t fall by 10% per annum next year, they’ll need to fall by 15% for the two years after that, to stay within the budget. While agriculture emissions may fall next year due to a drop in fertiliser use, the sheer numbers of extra dairy cows – 22,000 more in 2021 – mean that emissions will continue to rise or at best stabilise, instead of coming down.
The Taoiseach was somewhat irritated by all these numbers. He highlighted that 2 of the parties in the Dáil don’t even support the carbon tax, and that pushing climate action on a reluctant and ambivalent public will backfire. I highlighted the considerable body of work in the social sciences which shows that people support climate action when they trust the leading authorities, especially scientists and NGOs, and when policies are implemented in a fair manner. But you can’t expect the public to want these changes, which may involve economic or welfare losses, if they don’t know or understand why they are necessary. I mentioned that as a member of the EPA advisory board we had raised the issue of science/ climate communication on a number of occasions, noting the important role the EPA plays in navigating the science-policy interface and especially as an arbiter of some basic scientific truths. The government could task the EPA, and other bodies such as the Climate Change Advisory Council, with developing an effective climate communication campaign tailored to different audiences and geographies. If there’s an awareness and a political will problem, it points to a communications deficit – not the other way around! Either way, this lack of awareness is no excuse not to lead, especially when you’ve declared before the world that “as leaders, it is our responsibility to drive the transformation necessary”.
One of the main reasons I attend COP every year is to follow the negotiations and side events in relation to emissions trading.
The topic of carbon trading has a long and contentious history at the UNFCCC: originally introduced as a series of flexibility instruments under the Kyoto Protocol, it
morphed into a series of instruments that have been used to generate offset credits, mainly under the Clean Development Mechanism (CDM) and the Forestry scheme REDD+.
The idea behind offsetting is that you do something in one place to cancel the emissions emitted elsewhere. While it
sounds simple, in reality many of the offset projects bear no resemblance to the original source of the emissions. Intuitively it makes little sense that the damage caused a long-haul flight can be made to vanish by planting trees, but that is what the proponents of offsetting want us to believe!
Many of the projects approved under the CDM turned out to be
lacking in what is called ‘environmental integrity’ because they didn’t reduce emissions, or that they couldn’t be properly verified to be permanent and additional emissions reductions. Additionality is particularly important because the CDM finance is a form of subsidy, so if projects get financed that would have happened already without a subsidy, this interferes with competition. The architects of
market mechanisms are very keen on competitiveness so if you can’t demonstrate additionality, your project goes to the sin bin. In theory, at least.
The EU commissioned a study published in 2016 which found serious methodological problems with the way that offset credits under the CDM were approved. Arising from the many criticisms of offsetting over the last couple of decades, there was a clamour for reform so that developing countries could realise the benefits of hosting projects as part of their sustainable development agenda, and to facilitate cooperation with developed countries in climate action.
This led to the adoption of article 6 of the Paris Agreement which endorses on a voluntary basis cooperation between parties for the purposes of mitigating greenhouse gases. One country can purchase verified International Transfers of Mitigation Outcomes (ITMOs) from another, but there is a requirement for corresponding adjustments to national inventories to ensure that there is no double counting of
In practice this means that the host country selling the credits must add the equivalent in CO2e back onto their national inventories. It’s worth considering an example. Imagine Ireland selling credits based on bog rewetting projects to, say, Canada. If we sell 50tCO2e worth of credits, these mitigation outcomes leave the country so
the 50tCO2e must be added back onto our national emissions report. But the veracity of that transaction hinges on whether the bog rewetting is really (ie verifiably using some recognised method for measurement) reducing those emissions over a given time period including into the future, which of course is full of uncertainty.
In order for these emissions reductions to be ‘additional’ to what was already planned, it would be necessary to show that this project could not have happened otherwise and was not already planned under an NDC. These criteria – environmental integrity, permanence and additionality are in practice very difficult to guarantee.
The other type of emissions trading permitted under article 6.4 establishes a new type of offset mechanism similar to the CDM but this time, with higher standards of environmental integrity, overall reduction in global emissions and transparency. The mechanism is to be supervised by the COP instead of an executive body, so it can be reviewed and reformed if necessary over time.
However, this new mechanism will still contain millions of ‘junk’ CDM credits that are of low value from both a monetary and mitigation point of view. This was a big compromise made in Paris to get major host countries of old CDM projects on board, notably Brazil. Unlike credits issued under 6.2, not all of these transactions under 6.4 will require a corresponding adjustment, given that they may take place between many different types of actors ‘outside’ of a country’s NDC.
Switzerland is taking the concept of emissions trading under the Paris Agreement to a whole new level. The Swiss government has set a mitigation target of reducing emissions by 50% by 2030 but only 37.5% of that will be carried out domestically. The balance will be achieved via bilateral agreements with 11 separate countries under article 6.2 of the Paris Accords.
The idea is that the Swiss will finance projects hosted by agreement in developing countries, including Ghana, Peru and Senegal. The host country must authorise the project and the transfer of ITMOs, and corresponding adjustments will be made to the inventories of the host parties.
On paper, and at the flashy event this morning organised by the International Emissions Trading Association, it all sounds like a very good deal. Indeed Ghana have taken a very progressive approach by laying out a framework for 6.2 agreements, and setting out the kind of projects that they will or will not authorise.
However, some of the fundamental criticisms made by NGOs and academic researchers of carbon trading and carbon just won’t go away. For example, the New Climate Institute point out that these deals don’t raise the ambition of the buying country or the host country. In this example, Switzerland gets off lightly by paying for abatement costs at much lower rates than it would if mitigating at home.
Furthermore, Ghana and the other host countries will use up some of the ‘low hanging fruit’ in terms of developing projects to sell credits abroad that they could be using to meet their own country’s NDC. And the cost of the credits is still too low to properly incentivise action by rich countries or corporations for that matter to reduce their emissions at source.
Finally, this approach is no substitute for climate finance. There is very little evidence that all the carbon trading transactions amount to real and substantial transfers of resources to developing countries. Ultimately, countries and companies should get their own houses in order before paying people in other countries to do the work for them!
Is this too negative? Should we be welcoming trading and offsetting as a win-win for buyers and sellers alike? As John Kerry the US special Climate Envoy stated yesterday, governments simply won’t be able to stump up the $1.3 trillion in annual funding to developing countries that they need for mitigation and adaptation.
The private sector must be mobilised to invest in climate action across the world, and this is an opportunity to bring finance to where it’s needed. The US has always favoured market based instruments over top-down regulations so in a sense, the US initiative to launch a major carbon credit scheme should not surprise anyone.
What is news though was the announcement a few days ago of an African carbon market scheme, which will produce 300 million carbon credits annually by 2030, and 1.5 billion credits annually by 2050. The aim of the project is to develop $6 billion in revenue by 2030 and over $120 billion by 2050, support over 110 million jobs by 2050 and distribute revenue equitably and transparently with local communities.
But these approaches still overlook the grave risk that credits will be issued that don’t represent real, verifiable and permanent emissions reductions or that land will be utilised to grow trees in a way that does not respect indigenous peoples’ land rights, or that displaces food production.
The participants in the African carbon market scheme might be delighted to get jobs, but will they be aware that they are essentially cleaning up the mess made by industry, luxury brands or airlines? A tree (if it survives wildfires and droughts) may last 15-50 years but unfortunately carbon dioxide emissions released into the atmosphere stay there for thousands of years.
Therefore, the only true offset is a carbon removal process like Direct Air Capture, or carbon dioxide weathering. Needless to say these technologies are not developed at scale yet and they are extremely expensive. We like the idea of tree planting and cookstoves and renewable energy and these are extremely worthwhile initiatives in their own right: but is it right and correct to say that they can really offset emissions from the combustion of fossil fuels?
There are some remedies for these problems. Firstly legal limits can be put in place to the percentage of a country’s or company’s climate action target that can be achieved using offsets. It should be a very small percentage – no more than 5% and ideally reserved for ‘hard to abate’ sectors.
Secondly safeguarding mechanisms such as the refinement of verification standards and methodologies can ensure that junk credits don’t get through the system.
Finally, companies in particular need to be held to account for their climate claims. Unless there are strict rules around transparency, such as is the case in France or Australia, no company should be able to claim that it is ‘climate neutral’.
Needless to say, Ireland has no prohibition on environmental/ climate claims by companies. We have a lot of catching up to do.
Blog 4 What is the role of Direct Air Capture (DAC) in Article 6?
Imagine that there was some magical technology that could suck CO2 from the atmosphere. If we
could find this holy grail, could it solve the climate crisis? This post looks at the potential for one of
these technologies – Direct Air Capture or DAC – and explores its potential role in meeting the
temperature goals of the Paris Agreement under article 6.
The International Energy Agency (IEA) defines DAC technologies as those that extract CO2 directly
from the atmosphere. The process requires two steps: first, the extraction of CO2 from the
, and secondly, the permanent storage of the gas in deep geological formations, thereby
achieving carbon dioxide removal (CDR). In theory, these emission reductions, because they are
permanent, could ‘offset’ existing greenhouse gas emissions, or they could be used to enhance the
ambition of countries as they implement their NDCs.
Much ink has been spilled on the role that negative emission technologies (NETs) have played in
IPCC modelling. A paper by Kevin Anderson and Glen Peters in 2106 in Science argued forcefully that
reliance on speculative and unproven technologies to meet the goals of the Paris Agreement would
lead to further carbon lock-in. Furthermore, they argued that if these technologies failed to deliver
the emission reductions promised, even more severe emission reductions would be required to stay
below the carbon budget consistent with 1.5. Their article was prescient, and it cast doubt on the
reliance on Bioenergy Capture and Storage (BECCS) on a massive scale. But Anderson and Peters
only mentioned DAC once in the article, as a ‘theoretical’ project at the demonstration phase, noting
that it had potential and should be researched fully.
Since 2016, the technology has moved on considerably. While the role of DAC is still negligible
important advances have been made, and it is time to consider the governance of technologies such
as these in NDCs and under Article 6 of the Paris Agreement. According to the IEA, the benefits of 1
Note that technologies that capture CO2 from installations such as thermal power plants are generally
referred to as Carbon Capture and Storage. This technology is somewhat different because the gases are not
diffuse. DAC sucks the CO2 from the air, where CO2 molecules is much more dispersed.
DAC as a CDR option include high storage permanence when associated with geological storage and
a limited land and water footprint. The captured CO2 can also be used, for example in food
processing or combined with hydrogen to produce synthetic fuels. The IEA states “In a transition to
net zero emissions, the CO2 used to produce synthetic fuels would increasingly need to be captured
from sustainable bioenergy sources or from the atmosphere to avoid delayed emissions from fossilbased CO2 when the fuel is combusted. DAC is therefore one option to achieve this.”
So where are the numbers you ask? According to the IEA, there are currently 18 direct air capture
plants operating worldwide, capturing almost 0.01 Mt CO2/year, and a 1 Mt CO2/year capture plant is
in advanced development in the United States. In the Net Zero Emissions by 2050 Scenario, direct air
capture is scaled up to capture almost 60 Mt CO2/year by 2030. This level of deployment is “within
reach” according to the IEA, but will require several more large-scale demonstration plants to refine
the technology and reduce capture costs.
At a side event at COP27 I had the opportunity to hear from one of the main companies developing
DAC Climeworks, who have just raised $650m in US equity, have 18 projects underway and aim to
“neutralise unavoidable emissions”. The latest of their projects is called “Mammoth” (see image
above) which will have a nominal CO2 capture capacity of 36,000 tonnes per year. To put that into
perspective, this represents about 0.0006% of Ireland’s annual emissions. However, Iceland is a
different story. For a variety of reasons the
country hosted Climework’s first large-scale
DAC plant called Orca, which came on
stream last year. Iceland expects to
overachieve its NDC by 2030, and plans to
sell credits to Switzerland, a country that is
pioneering the use of Article 6 mechanisms
to use emissions trading and offsetting as a
way of meeting up to 25% of its own NDC.
According to the Verge, for DAC to
play any meaningful role in mitigating
GHS, each plant would have to draw
down as much CO2 as represented by
all the blue boxes in this image – they
currently draw down the equivalent of
the black box.
However, this is where it gets interesting. Iceland and Switzerland only have a “letter of intent” that
set out their mutual interest in exchanging carbon credits using DAC. There is no clarity yet as to
whether they will use the Voluntary Carbon Market (VCM) or Article 6.2 or even 6.4. The differences
between the two have a lot to do with transaction costs, approved IPCC methodologies (or the lack
thereof) and the flexibility that different approaches may offer. But what it boils down to is this:
Iceland will “sell” ITMO credits to Switzerland that will then have to be added back onto the
Icelandic national inventory (NIR) to avoid double counting. But because DAC is not in IPCC inventory
guidelines (yet) there is no methodology to follow as to how to finalise the corresponding
adjustment to the NIR.
One solution to this barrier would be to jointly pilot the use of DAC credits in NIRs, and to request
the IPCC to expand its guidelines, which may take a few years. But as the figures above show, the
role of DAC for the forthcoming years is likely to be very small anyway, so this shouldn’t be a major
barrier to investment, which may well get a boost as a result of the US Inflation Reduction Act
deployment incentive of $180 per tonne of emissions avoided.
What should we make of all this? There are two important points to make. Firstly, while many of the
consultancies and firms investigating and researching NETs point to “policy principles” and claim to
adhere to firm ethical standards, the reality is that there is nothing to stop any individual or
corporation going directly to the Climeworks website and purchasing credits. But the difference with
these DAC credits is that they really do offer permanence and additionality in a way that very few
offset credits can. The CO2 is literally turned into rock – calcium carbonate – by injecting the
dissolved CO2 into basalt, which is ubiquitous around the planet. What might deter you from
choosing these particular credits is their cost: permanence comes at a stiff price of $600-1000 per
tonne, though these costs are likely to come down. The second point has to do with what we call in
the climate ethics world “blocking exchanges”, where you limit the extent to which emission
reductions can be commodified and exchanged. I had the temerity to ask the panel of experts at the
DAC side event whether we should be reserving these credits/ emission reductions for truly “hard to
abate” sectors given that they don’t suffer from the verification and sustainability problems that
most other offset credits do. Given that they’re very limited in quantity and somewhat “special”
shouldn’t we be reserving them for emissions that will be slowest and costliest to abate?
The answer from economist Axel Michaelowa – who is an expert on international mechanisms and
whose work I have huge regard for – is that such an approach wouldn’t make sense, the price alone
will deter the unscrupulous companies. This is the classic response by economists – leave it to the
market to determine the most efficient allocation. In contrast, both Carbfix (the Icelandic company
injecting the CO2 into the rock) and Climeworks were keen to stress that they are opposed to
greenwashing and select buyers and partners “carefully”. But the market doesn’t distinguish
between the ethical standards of buyers. The panellists noted that the main interest in buying DAC
credits is coming from the tech sector – no surprises there – likely because of the huge carbon and
energy footprint of data centres and manufacturing of companies such as Amazon. I have to admit that while it is interesting to see how DAC is starting to scale up, it has already been
sucked into the international jungle of carbon offsetting and trading, where the 1.5 target is sidelined for the sake of profit. Companies rapidly confuse the idea of success in making profits with
success in driving emissions down, and most offsets don’t even deliver the permanent emission
reductions promised. The inconvenient truth is that offsetting won’t save us because it doesn’t work
and it only serves to delude us that we can continue using fossil fuels for longer. For DAC to step into
this space it would have to grow exponentially as an industry at stratospheric rates over the next few
years in a way that only the mobilisation of all industrial resources could achieve. That isn’t likely to
happen anytime soon.
Sadhbh O’ Neill
13th November 2022