EU Proposal on International Carbon Credits and Sustainable Development Goals

Introduction

The European Union (EU) is considering the use of international carbon credits to support its emissions reduction targets for 2040. This approach involves financing emissions-reduction projects in other countries, often less economically developed, and counting the resulting greenhouse gas reductions toward the EU’s own climate goals rather than those of the host countries.

Key Elements of the Draft Proposal

1. Timing and Scope: The use of international carbon credits is planned to begin in the second half of the decade, starting from 2036.
2. Limit on Contribution: The draft limits the contribution of high-quality international credits under Article 6 of the Paris Agreement to no more than 3% of the EU’s 1990 net emissions.
3. Legislative Framework: The European Commission intends to propose legislation to regulate these credits, emphasizing the need for robust criteria and standards concerning their origin, timing, and use.

Alignment with Sustainable Development Goals (SDGs)

• SDG 13 – Climate Action: The proposal supports global climate action by enabling emissions reductions beyond EU borders, contributing to the Paris Agreement’s objectives.
• SDG 10 – Reduced Inequalities: By funding projects in poorer countries, the EU promotes sustainable development and environmental benefits in less advantaged regions.
• SDG 17 – Partnerships for the Goals: The initiative fosters international cooperation through carbon credit mechanisms under Article 6, enhancing global partnerships for climate mitigation.

Concerns and Safeguards

• Risk of Slowing Domestic Efforts: Critics, including scientific advisers, caution that reliance on international credits might reduce the urgency of domestic climate actions necessary to meet the EU’s 2030 and 2050 targets.
• Exclusion from EU Carbon Market: The proposal explicitly excludes the integration of these credits into the EU’s carbon market to prevent undermining the carbon price mechanism that incentivizes emission reductions within the bloc.
• Need for High Integrity Standards: The draft stresses the importance of thorough impact assessments and the establishment of high-integrity criteria to ensure the credits’ effectiveness and credibility.

Conclusion

The EU’s draft proposal on international carbon credits represents a strategic approach to achieving its 2040 climate targets while supporting sustainable development in partner countries. By aligning with multiple Sustainable Development Goals and incorporating safeguards to maintain domestic climate efforts and market integrity, the EU aims to balance global cooperation with robust internal action.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 13: Climate Action
   • The article focuses on emissions reduction, carbon credits, and climate targets, directly relating to SDG 13 which aims to combat climate change and its impacts.
2. SDG 17: Partnerships for the Goals
   • The use of international carbon credits involves cooperation between the EU and other countries, highlighting global partnerships and collaboration, which is central to SDG 17.

2. Specific Targets Under Those SDGs Identified

1. Under SDG 13: Climate Action
   • Target 13.2: Integrate climate change measures into national policies, strategies, and planning. The EU’s 2040 target and the use of international credits under Article 6 of the Paris Agreement reflect this integration.
   • Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards. The emissions-slashing projects funded by credits contribute to this goal indirectly by reducing greenhouse gases.
2. Under SDG 17: Partnerships for the Goals
   • Target 17.16: Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships. The international carbon credit mechanism exemplifies such partnerships.
   • Target 17.17: Encourage and promote effective public, public-private, and civil society partnerships. The EU’s cooperation with other countries for emissions projects aligns with this target.

3. Indicators Mentioned or Implied to Measure Progress

1. Indicator for SDG 13 Targets
   • Indicator 13.2.2: Total greenhouse gas emissions per year. The article discusses the EU’s net emissions from 1990 and the goal to reduce emissions by 2040, implying this indicator.
   • Indicator related to the percentage contribution of international credits to emissions reduction (implied by the “no more than 3% of 1990 EU net emissions”).
2. Indicator for SDG 17 Targets
   • Indicator 17.16.1: Number of countries reporting progress in multi-stakeholder development effectiveness monitoring frameworks. The article implies monitoring through the EU’s legislative proposals and impact assessments.
   • Indicator related to the volume and quality of international carbon credits used under Article 6 of the Paris Agreement (implied by references to “high-quality international credits” and “robust and high integrity criteria”).

4. Table: SDGs, Targets and Indicators

Source: politico.eu