We’re almost halfway through COP25 and carbon markets remain the talk of the day. The International Emissions Trading Association (IETA), which was co-founded by Shell, is going full speed ahead to keep markets high on the agenda. Yesterday, the IETA pavilion hosted six side events on the topic. This is no coincidence.
Last year in Katowice, the Anglo-Dutch oil and gas giant Shell used the pavilion to boast about its role in getting carbon markets into the Paris Agreement. At an IETA side-event a Shell representative said: “We can take some credit for the fact that Article 6 is even there at all”.
This year, the oil and gas company is back. It is calling for a “simple but rigorous rulebook that … encourages large scale transactions”. But why exactly is Shell so eager to get its way with carbon markets? Maybe because markets could allow Shell to continue producing more oil and gas. On Thursday, the report “Oil, Gas and the Climate” showed that Shell has the second highest projected increase in oil and gas production in the next five years. On the same day, Shell was back at its favourite spot, speaking at an IETA side-event about “markets for natural solutions,” alongside bddies Chevron and BP.
In a powerful sign of protest, activists (who took up most of the room) stood up when Shell’s panelist started to speak, covered their ears and walked out.
ECO understands that carbon markets look like a magical solution for Shell and other big oil companies, whose magic would allow business as usual while avoiding responsibility for cutting emissions at the source. In fact, Shell has already padded its profits from the EU’s Emission Trading Scheme, making over €185 million in windfall profits between 2014 and 2018 in the Netherlands and receiving an additional €8.3 million in subsidies from the Dutch government as compensation for participating in the scheme between 2014 and 2018.
But limiting warming to 1.5°C, means cutting emissions by 7.6% every year between now and 2030, and there is simply no atmospheric space left to trade and no room for carbon market rules that put the interests of polluters over those of people. On Article 6, a weak deal would blow a giant hole in the Paris goals, which would be far worse than no deal at all.
At a bare minimum, Article 6 needs to exclude old, dusty credits and underhanded double-counting. It needs to reduce emissions – not move them around the world – and include strong protections for human rights and Indigenous sovereignty.
The legacy of carbon offsetting schemes so far is one of barely if at all reducing emissions while enabling conflict, corporate abuse, forced relocation, and threats of cultural genocide, particularly for Indigenous Peoples, smallholder farmers, forest dwellers, young people, women and people of colour.
If Parties followed activists' lead and tuned out Shell and other polluters completely, they might open their eyes to the possibilities of far greater ambition.
Planned oil, gas and coal projects already in the pipeline represent more than double what can be burned by 2030 if we’re to limit warming to 1.5°C. It is time to start addressing emissions at the source. With the likes of Shell back at COP25 to promote false solutions, it is high time for governments to listen to people rather than corporations, and to take serious action on the climate crisis, including limiting the production of fossil fuels. In their updated NDCs next year, governments should include an end to the licensing and financing of fossil fuels to ensure a managed decline with an equitable and just transition. Only that way will we have a chance to limit global warming at 1.5°C.