In her monthly Expert Take column, Selva Ozelli, international tax attorney and CPA, covers the intersection between emerging technologies and sustainability, and provides the latest developments on taxes, AML / CFT regulations, and legal issues affecting cryptocurrencies and blockchain.
The United Nations Conference on Climate Change 2021 (COP26), where displayed my art, took place in Glasgow, Scotland and ended with the adoption of the Glasgow Climate Pact, bringing nearly 200 countries closer to keeping global temperature rise by 2100 below 1.5 degrees Celsius.
The conference focused more on reducing emissions than on provisions to support developed countries for developing countries, such as summarized in the UN-Energy summary of the Ministerial Thematic Forums, which highlighted key recommendations and milestones towards achieving Sustainable development goal 7 and net-zero emissions. Key elements of the global road map include:
- Closing the energy access gap: Provide access to electricity to the 760 million people in the world who lack it. Ensuring clean energy kitchen solutions for the 2.6 billion people who depend on harmful fuels.
- Quick transition to clean energy: Abandon all coal plants in process and reduce coal power capacity by 50% by 2030. Rapidly scale up energy transition solutions to reach 8,000 gigawatts of renewable energy by 2030 by increasing the annual energy efficiency rate from 0, 8% to 3.0%.
- Leave no one behind: Integrate equity and equality into energy sector policies through planning and financing, creating green energy jobs, and integrating energy sector policies and strategies into those that ensure just energy transitions.
- Mobilize adequate and well-targeted funding: Triple investment in clean energy globally by 2030 to accelerate access to finance. Phasing out inefficient fossil fuel subsidies to support market-based transitions to clean energy. Create enabling policy and regulatory frameworks to boost private sector investment in clean energy.
- Take advantage of innovation, technology and data: Expand the supply of energy innovation that addresses key gaps and increases demand for clean and sustainable energy technologies and innovation through market-oriented policies, harmonized international standards, and carbon pricing mechanisms.
The COP26 conference made history by being the first climate summit to explicitly include a "phase-out of carbon" in its decision, and established new rules for carbon market mechanisms, commonly known as Article 6. A recent research paper Estimate that establishing a global carbon market would save the world about $ 300 billion annually by 2030.
Related: Pandemic year ends with tokenized carbon cap and trading solution
Article 6 of the Paris Agreement, which covers international cooperation, including carbon markets, established new rules for trading carbon credits that represent one metric ton of carbon that has been reduced or removed from the atmosphere. The new rules create an accounting system that aims to avoid double counting of emissions reductions and is made up of two parts: a centralized system open to the public and private sectors, and a separate bilateral system that will allow countries to negotiate credits. that they can use to help achieve their decarbonization goals.
Related: Climate Chain Coalition advocates for the creation of a green economy at COP26
Joseph Pallant, director of climate innovation at Ecotrust Canada and founder and CEO of the Blockchain for Climate Foundation, explained to me:
"The results of emission reductions are the most important assets and will soon be the most valuable in the world."
He continued: "The BITMO platform, built on Ethereum, enables cross-border collaboration in reducing emissions, distributing the benefits of clean energy, natural climate solutions and better infrastructure to all corners of the world."
The BITMO Platform is a project of the Blockchain for Climate Foundation, which created it to promote Article 6 of the Paris Agreement and use blockchain technology to drive a more effective and efficient global carbon market. It enables the issuance and exchange of "blockchain internationally transferred mitigation results" (BITMO) on the Ethereum blockchain as non-fungible ERC-1155 tokens (NFT). Each token represents one metric ton of CO2 and the relevant carbon credit data is embedded in the NFT.
Related: How will blockchain technology help fight climate change? Experts respond
Article 6 aims to connect global emission reduction opportunities with the necessary capital and demand. For a global carbon market to reflect real emissions reductions, the accounting infrastructure must ensure integrity, cooperation and avoid double counting of emissions reductions. The BITMO Platform acts as a secure registry for the emission, transfer and withdrawal of mitigation results transferred internationally from each country that can be integrated or reconciled with the national carbon registries and the future requirements of the United Nations Framework Convention on the Climate change. BITMOs help achieve global climate goals by making any relevant data easily visible, available to the public, and resolved immediately when exchanged, avoiding double-counting of emission reductions.
Carbon tax
Another major point of discussion among world leaders at the COP26 conference in Glasgow included the implementation of a carbon tax, which shifts responsibility for the consequences of climate change to responsible polluters, according to the World Bank. Currently, there are 69 countries with carbon taxes, ranging from $ 1 to $ 139 per metric ton.
Related: The need to report carbon emissions amid the coronavirus pandemic
The administration of United States President Joe Biden has outlined $ 555 billion in spending to tackle climate change as part of the Build Back Better Act, which includes a proposed methane tariff designed to incentivize oil and gas companies to reduce their methane emissions.
The views, thoughts and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Selva Ozelli, Esq., CPA, is an international tax attorney and certified public accountant who writes frequently on tax, legal and accounting issues for Tax Notes, Bloomberg BNA, other publications, and the OECD.
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