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COP28 Diary, 2nd December 2023, Carbon Credit Markets Special.

These are news from Dubai.


Metro, lines and queues. And before we start.

Day started normally, planning to arrive at COP’s venue with enough time (to attend France 🇫🇷 press conference at 9:00). But, at the same time an SMS from UNFCCC’s App was arriving, the train stopped one station before final destination. The SMS message coincidentally indicated: avoid arriving at COP at rush hours (!). Too late. Everybody had to leave the train and wait at the platform for the next one, a few minutes later. Then, upon arrival at the final station, another surprise: a long zig zag queue, as far as the eye can see. Patience. And heat. At certain point of the queue, a bottle of water was given to each one of us. Given the situation, a great opportunity to look around and chat. At the distance, greeted Mr. José Pugas, one of the top ESG, COP and climate issues specialist from Rio de Janeiro, Brazil. And at my side, met Ybrahim from Sudan, and talked about recent extreme weather events at the UAE, Sudan and Brazil. He was not a delegate, but a support technician, part of COP28’s online broadcast services team (well, I think he deserves the priority lane, don’t you agree with me?). He even helped me check if that France press conference was already being transmitted online. “Meeting did not start yet”. Good (and even better to know later on that it was postponed to the end of the day 😊 ). We eventually passed all security checks and entered - one more day - at the Blue Zone.


PS. When finishing writing this post, another mobile alert from UNFCCC’s App: “3 December will be a busy day at COP28. Arrive early to avoid queues.”


The day.

How COP is multiple and diverse. Give a look at these two panels:


Quite a lot of people seeking to expand engagement, quite diverse perspectives and actions.


The panel we attended and liked the most today was about “Synergies Unleashed: Bridging Article 6, VCM, and Exchange Dynamics for a Sustainable Future”. Organised at IETA’s Business Hub, International Emissions Trading Association, moderated by Corinne Boone from ACX, with expert panelists:


Andrew Cullen, from ACX Singapore emphasised that ACX wants to lower barrier entries to the carbon markets. “We facilitate the transaction of buying specific projects.” by standardizing intense operations and due diligence related to carbon credits. On top, providing global connectivity to something naturally intangible: “Carbon is of digital nature.”


Lisa DeMarco, from Resilient, Canada highlighted “a lot of complicated issues”, including ownership, transfer and compliance issues. On top, clarity about its final use, including the role of “intermediaries”, such as exchanges. Quoted integrity and the VCM Code, topic explained in the sequence, by Amy Merrill from ICVCM and C2ES Germany. For her, quality and integrity are common points between compliance and voluntary markets. Point of attention would be jurisdictional carbon credits, basically as in the last 2 years, domestics markets learnt that they could develop their own standards.


Carlos de Mathias Martins Jr., from EQAO Brazil wrapped up, linking with Amy: fungibility remains an issue. He also voiced out preference for carbon credits of engineering nature, from hard to abate sectors.


The debate heated up and involved all participants when Carlos mentioned the carbon price uncertainty and issues with the current proposed law for the Brazilian regulated carbon market:

Amy pointed out country sovereign rights, under article 6.

Lisa showed concerns with the trend of Brazilian carbon credits being considered a security, instead of a trading commodity. And mentioned other jurisdictions were the agribusiness is treated differently in terms of carbon credits, such as California or indirectly through fertilizers. The work of UNIDROIT towards global consistency of the legal nature of carbon credits, expected for next year, was also mentioned. And when asked about the different treatment of offsets and carbon credits in terms of NDCs, referred to the need for transparency and reconciliation by each country.


Lunch was very late, extremely hard to “bite something”, and took more than two hours for some of us.


Then the Press Conference by Macron, the French president.

  • Le monde aura besoin de plus de nucléaire pendant la transition, ainsi que d’énergies renouvelables."

  • Acceleration of nuclear fuel, a low carbon energy. Including with support to emerging countries.

  • In France, coal will be phased out earlier than expected, by 2027.

  • Financial instruments will start differentiating (rates) for climate friendly projects.

  • Then mentioned the billions and billions of euros being made available to vulnerable countries, part within Loss & Damage, part extra.


And three final special highlights:

  • Build momentum with Kenya President William Ruto, for his protagonist in Africa, and the Brazilian presidency of G20, and propose a reform of Bretton Woods, a reform of the financial system. “Plus inclusif. Beaucoup plus inclusif”.

  • Developed countries are not investing enough in forests, as a natural carbon capture solution. “Faisons avec les forêts ce que nous faisons déjà avec l’énergie”.

  • Water is also important. There will be a Summit in 2025.


During the Q&A, we were surprised with one related to Mercosul, Brazil. We later realised that the question was made by Bianca Rothier, Globo’s international correspondent. Macron said that he had a long conversation with Lula - “nous avons des points de vue similaires” - and that he will visit Brazil in March. About the Mercosul - Europe agreement, he was clear: “je suis contre” (I am against). For Macron, it is “an old fashioned type of agreement”. There are more modern forms, new standards to be followed (?) and that Brazil should de rewarded for its “forests to be a treasury”.


La fin.



The last appointment of the day ended up being the COP28 Presidency Press Conference. With three significant developments:

  • Oil & Gas Decarbonization Charter launched to accelerate climate action. It “calls for the industry to align around net zero by or before 2050, zero-out methane emissions, eliminate routine flaring by 2030 and to continue working towards industry best practices in emission reduction”. Signatory companies represent over 40 percent of global oil production, with National Oil Companies representing over 60 percent of signatories. Give a look at the list.

  • 118 countries have agreed to triple installed renewable energy generation capacity to at least 11,000 gigawatts and to double the annual average rate of energy efficiency, from 2 to 4 % until 2030.

  • Over 120 countries back COP28 UAE Climate and Health Declaration delivering breakthrough moment for health in climate talks.


Before we close the day.

We would also like to share the link to a LinkedIn post from Johannes van de Ven, with a 4 pages address from Pope Francis that was read this December 2 at COP28. We quote “… may we be sensitive to the hopes of the young and the dreams of the children! We have a grave responsibility: to ensure that they do not be denied their future. …. The climate, run amok, is crying out to us to halt this illusion of omnipotence”.


People and paparazzi

Today we were almost run over by Japan’s Prime Minister, Fumio Kishida. Kind of funny to see some of his security staff running ahead, kindly asking to open space for the rest of the entourage, just coming behind … equally fast. And also already mentioned, we also closely saw Monsieur Macron. It was the first “one man” press conference so far, as he was the only one on stage. But obviously very well supported from behind the scenes. At the end, answered 4 questions: one related to nuclear power (and his COP28 feelings), two related to the crisis in Gaza and the last one about Mercosul / Brazil, as mentioned above. By the way, he amended his answer by saying that had to leave and give room to the final press conference: with the Brazilian president. At the end, that scheduled press conference on Brazil was cancelled, although we could see several members of Lula’s entourage chatting around at the exist of the main pavilion.


Our key takeaways

Carbon credits, keep your eyes - and ears - open on the developments of all aspects such as methodologies, quality level, integrity, trading, price trends etc.


And take note: “Énergie atomique” is back (ok ok … nuclear power is back).


And methane from flaring (oil and gas) - as anticipated yesterday - definitively entered the radar for phase out. Mind that there are two other relevant sources of methane emissions: venting and leakage (coal and fracking).



COP28 Dome. Photo by CarbonCreditMarkets
COP28 Dome. Photo by CarbonCreditMarkets


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 CARBON CREDIT MARKETS

“Nothing in life is to be feared, it is only to be understood. Now is the time to understand more, so that we may fear less.”

“I am among those who think that science has great beauty”

Madame Marie Curie (1867 - 1934) Chemist & physicist. French, born Polish.

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