Spain, Germany, Costa Rica and New Zealand unite against weak Carbon Markets

After 2 weeks of 24 hour negotiations in Madrid, a group of now 27 countries, have come out publicly against efforts of Brazil and Australia to weaken carbon markets.

In what was one of the most exciting moments on a dreary final day at the UN climate talks, the emergence of a united front of countries that crossed developed and developing divides, released the “San Jose Principles” and a ray of hope to many concerned about the integrity of carbon markets going forward.

As Franz Perrez, a veteran negotiator from the Pre-Paris era of the climate talks and Head of Delegation of Switzerland, outlined; “if markets are to increase ambition, the rules have to be as robust as the San Jose Principles”.

The 11 principles and one additional element of recognition, outline what Eric Wiebes hopes will ensure “the environmental integrity of the multilateral system,” as negotiations on a final decision for carbon markets push 24 hours past their scheduled end

Critically, the principles include specific language that directly opposes pushes by Australia and Brazil to allow special rules within a future carbon market system that would undermine the Paris Agreement, only 4 years after it was gavelled through.

Without proper accounting, our climate action will be meaningless. We can show flexibility on certain issues, but not on the San Jose Principles for international carbon markets,” said Wiebes the Minister of Economic Affairs and Climate Policy of the Netherlands.

The Principles are officially called the San Jose Principles for High Ambition and Integrity in International Carbon Markets, and recalls a move that changed the game at the Paris Climate negotiations. There, a group of countries pooled together by the Marshall Islands through a year of secret diplomatic meetings came out in support of a long term goal and pushed the 1.5 degree target over the line.

Here, it seems Costa Rica has made a similar move, naming the principles after its capital.

In yesterday’s theatrical press event, there were 23 countries signed onto the San Jose Principles, but that list has now grown to include Spain, Italy and Fiji (as of 2:30pm, December 14). *As of 4pm the list grew to include Belgium, and we should expect almost the whole EU block to jump in soon. 

For Arthur Wyns from the World Health Organisation, the move from the host nation was especially interesting:

Significant move by the #COP25 host country to join this carbonmarkets coalition— Arthur Wyns (@ArthurWyns) December 14, 2019

The principles themselves cross both politicised and technical elements of the debate on Carbon Markets, and if achieved, complement many of the key asks from both civil society and investors alike.

These include elements on what needs to be measured, how carbon markets fit into national climate plans, and how they might also connect to developing country concerns around financial support.

However, it is clear that the over-riding intention is to outline what would be needed for a market mechanism that actually ensures countries reduce their emissions, and not just pass them off around world for financial gain.

The diverse group of countries supporting these principles know we need a just outcome to keep the 1.5C target within reach,” added Costa Rica’s Minister of Environment and Energy, Carlos Manuel Rodriguez.

However, one key element missing from the San Jose Principles are any mentions on safeguards for Human Rights. This is something that has concerned many over the last days in Madrid, as specific mechanisms to ensure that countries aren’t trading credits that harm communities around the world have been wiped from the final draft texts.

Adding what some see as insult to injury, the final decision document that has yet to be approved includes a mention that these safeguard mechanisms would only be reviewed in 2026, and potentially implemented in 2028.

In response to the new revelations, Senior Attorney at the Centre for International Environmental Law, Sebastian Duyck called on all countries to push back hard.

What we call on parties here is to reject any text on Article 6 is that would fail to meet the most basic human rights. The most appalling thing in this text that we need to provision for this absence of human rights to be revised in 2028,” he argued this morning.

Many of the countries signed onto the San Jose Principles have supported Human Rights safeguards in the past. This includes Costa Rica, New Zealand and Ireland, whose former Prime Minister Mary Robinson, was at the UN talks this week pushing both publicly and privately for stronger Human Rights language.

However, the list of signed-on countries also excludes Australia, Canada and Mexico, who have this week been the most vocal supporters within Carbon Market discussions.

During these debates, many developing countries opposed any financially-linked provisions to check on Human Rights, even though these same countries have signed onto numerous international Human Rights declarations, and recognise it as a preambular principle of the Paris Agreement.

When I spoke to negotiators who did oppose, they described the “dynamic nature of Human Rights” as their key rationale. However, it is clear that the real concern is financial; as projects generating potential credits might not be able to sold if there was a provision for communities to speak out and block sales when their own rights were abused.

For Duyck the exclusion of Human Rights provisions within any Carbon Market system for the next 8 years cannot go unnoticed; “It is disgraceful for governments to even put such steps on the table.”

With the potential to reshape the Carbon economy of the 21st Century, The High Ambition push is a critical call for ensuring the integrity of the entire system. However, if that system fails to build in mechanisms to ensure it protects vulnerable groups, we may all ask, who is it designed to protect in the first place?

The full list of San Jose Principles includes:

  • Ensures environmental integrity and enables the highest possible mitigation ambition
  • Delivers an overall mitigation in global emissions, moving beyond zero-sum offsetting approaches to help accelerate the reduction of global greenhouse gas emissions
  • Prohibits the use of pre-2020 units, Kyoto units and allowances, and any underlying reductions toward Paris Agreement and other international goals
  • Ensures that double counting is avoided and that all use of markets toward international climate goals is subject to corresponding adjustments.
  • Avoids locking in levels of emissions, technologies or carbon-intensive practices incompatible with the achievement of the Paris Agreement’s long-term temperature goal.
  • Applies allocation methodologies and baseline methodologies that support domestic NDC achievement and contribute to achievement of the Paris Agreement’s long-term temperature goal
  • Uses CO2-equivalence in reporting and accounting for emissions and removals, fully applying the principles of transparency, accuracy, consistency, comparability and completeness
  • Uses centrally and publicly accessible infrastructure and systems to collect, track, and share the information necessary for robust and transparent accounting
  • Ensures incentives to progression and supports all Parties in moving toward economy-wide emission targets.
  • Contributes to quantifiable and predictable financial resources to be used by developing country Parties that are particularly vulnerable to the adverse effects of climate change to meet the costs of adaptation
  • Recognizes the importance of capacity building to enable the widest possible participation by Parties under Article 6

The full list of countries signed on to the San Jose Principles includes:

  1. Costa Rica
  2. Switzerland
  3. Belize
  4. Colombia
  5. Paraguay
  6. Perú
  7. Marshall Islands
  8. Vanuatu
  9. Luxembourg
  10. Cook Islands
  11. Germany
  12. Sweden
  13. Denmark
  14. Austria
  15. Grenada
  16. Estonia
  17. New Zealand
  18. Spain – joined on Saturday morning
  19. Ireland
  20. Latvia
  21. The Netherlands
  22. Norway
  23. Slovenia
  24. Belgium
  25. Fiji – joined Saturday
  26. Italy – joined Saturday
  27. Belgium – Saturday – the latest addition


*This article was updated to highlight the addition of Italy and Belgium. An earlier version also incorrectly listed a youth delegate from Costa Rica