Developing countries seemingly lose out in final negotiations in the market mechanism group

The final session of the market mechanism working group yielded some heated discussions once again. The session kicked off with a re-evaluation of the funding of REDD+ in response to a comment released by El Observador earlier, as the Mexican delate picked up on the concerns about the ambiguousness of the „prevention of the 30% of deforestation by 2030″. Nonetheless, talks initiated about the inclusion of an additional statement on the monitoring and revisiting of the funding, but the concept of 30% still remained unclear. Some countries, most notably South Korea, seemed to be in a hurry and favoured speed over clarity, undermining the strength of the agreement. 

Heated Discussions in the Market Mechanism Working Group

In addition, a surprise section on the eligibility of countries for REDD+ projects was agreed on. The parties agreed that all countries are eligible for participation in REDD+ projects, while the focus should be on countries that are most vulnerable to deforestation and forest degradation and that lack the necessary financial resources. This however raises significant questions about the fairness and equality of the distribution of REDD+ projects. 

In the discussion on the hosting of SDM projects, delegates however seemed to realise allowing all countries to be eligible might yield an unequal split of the allocation of projects. For instance, the South Korean delegate pointed out that China currently receives 75% of SDM projects, which was venomously defended by the Chinese delegate. Nonetheless, countries such as Canada, China, Russia, Mexico and the UK campaigned for giving preference to countries where projects have the biggest impact, favouring the current system that is heavily tilted towards a small number of countries.

As a result, the final agreement states that all nations having adopted and ratified the Paris Agreement can host SDM projects. The parties only agreed to support least developed countries and developing countries, but did not agree on giving them preference. This looks like a big blow to developing nations aspiring to receive a more equitable SDM.

Along similar lines, the delegations failed to reach conclusive agreement on taxation on aviation and shipping, despite an emotional pledge by Norway that was backed by a multitude of countries. Instead, the parties agreed on postponing this matter to the next Conference of the Parties.