COP27 Reflection and Takeaways

I’m at the end of my #COP27 journey, what a week! First a meta-reflection and then a few carbon markets, nature and community focused insights/takeaways.

My main reflection from COP is that we would benefit from recognizing that we are operating in the grey, in uncharted territory. There might be one right solution, one path forward that will have the best outcome, but it’s unlikely any one of us can say with 100% confidence what that is and all solutions have trade-offs. I encourage all of us (including myself!) to spend less time pitching the solution that we think will work, and more time listening to each other and recognizing that the future is not black and white, and it isn’t grey either, it will have shades of everything. Most importantly, we must take action and have compassion for ourselves and each other that things may not work perfectly and we will learn and iterate. I heard a lot of talk and it’s time to tinker and try things, with a stated humility that we may not get things right, and that’s ok, because the only way we will learn is by listening and doing and listening again to learn and try again with the knowledge and understanding we have gained.

Here are my top 10 insights/takeaways from COP related to #CarbonMarkets #Nature #Communities and #ArticleVI (note that my biases/personal persective are influencing these):

1. None of the current integrity standards or integrity initiatives (other than Plan Vivo) have anything related to financial transparency and fairness for stakeholders, especially indigenous peoples and local communities. Good thing is, this was a hot topic at COP and this should start to shift in the coming months.
2. The beyond carbon benefits of carbon projects are starting to be discussed/prioritized as much as the carbon credits themselves. I would not be surprised if we see a strong call in the near future for Verra to update the CCB to increase the standard to a greater level of objectivity with applicability to more types of projects, or we see a new beyond carbon standard emerging in the market that has multiple levels of impact instead of a one-size fits all.
3. Jurisdictions are starting to take action around rules and policy for VCM and carbon accounting/transacting in general. New rules approved or emerging recently out of Indonesia, Tanzania, Singapore, Ecuador, Papau New Guinea and Costa Rica (I’m sure I missed a few).
4. Nature is front and center with US releasing new guidance for a focus on nature-based solutions (#NBS) and there is a strong sense we are starting to move away from the myopic focus on carbon.
5. #CorrespondingAdjustments (CAs) are not necessary to avoid double accounting for credits purchased on VCMs. On a panel on Article VI and the VCM, a Singaporean delegate stated they are open to catalyzing VCMs and our trading exchanges are open to credits that do or don’t have CAs.
6. Global north countries committing to allowing VCM purchases of credits produced in the global south be private entities based on the global north without a corresponding adjustment would contribute to the #LossandDamages solution, with global north private entities and finance funding climate mitigation activities in the global south and the NDC staying with the producing country in the global south.
7. There seems to be increasing conflation of corresponding adjustments with credit quality related to the climate mitigation outcome. Carbon being effectively mitigated is different from how we account for that claim.
8. Will be at least until the end of 2023 and likely 2024 before the rules are finalized for the creation of and trading of ITMO’s between countries. The general sense here is that it will likely be multiple years beyond that until the infrastructure is established for country to country accounting and trading, both for ITMOs and credits traded on the voluntary market.
9. Indigenous voices are at COP but they aren’t being included sufficiently at the negotiating tables. As sovereign nations with a very valuable perspective, my personal opinion is that they should.
10. Whether we trend towards a larger voluntary market, more regulation, more compliance markets, more government to government trading or something else entirely, there is and will continue to be a demand for climate mitigation. It’s just a question of how quickly we will act and what amount of resources we will be willing to commit to address the challenge. If we are going to use market mechanisms, and ideally commit to climate mitigation solutions that are robust and have benefits beyond carbon, we must be committed to paying the true cost of those solutions.
11. COP is great for relationships, and while I wasn’t in the rooms where negotiations were happening, it felt a bit like a trade fair. I wish there were less panels pitching solutions and more rooms for conversations and workshopping ideas and forming partnerships to take actionable next steps. This happened a lot in the 1::1 meetings that happened which were the true gems of COP for me. And I’m guessing that much of this was happening behind closed doors in the negotiation rooms.