Developing countries argue that an “angel’s share” of these credits should be put to the good of the planet, and another cut directed to a fund to help vulnerable states adapt to climate change.
The Paris Agreement, negotiated in 2015, was a landmark global achievement – able to get 193 of 197 countries to agree to reduce carbon emissions.
This appears on page 7, and refers to a carbon market that could allow countries to produce and sell carbon credits to another government, or even a city or company.
In decades past, the Government relied on planting trees to meet our climate goals.
In its budgets, the Government aims to save 47m tonnes through a variety of domestic policies.
It actually gives permission for two kinds: first up, countries can create a direct agreement with one another to buy and sell emissions reductions, through a bilateral or a multilateral agreement.
This would be in addition to other levies written into the Paris Agreement: if New Zealand buys credits on the carbon market, a share of the proceeds should go to adaptation.
The negotiators are debating the exact proportion: both 2 and 5 per cent are on the table.
Asked about funding for adaptation beyond the carbon market, Harrison compared the proposal to a tax, and said New Zealand’s preferred approach is to offer funding through its climate finance pledges.
To keep the price of units in its Emissions Trading Scheme manageable, it also sold millions of extra units this year at $53.85 a pop.
As the COP26 conference progresses, negotiators will narrow down the options – a concession on one issue might promote agreement with a different section of the Paris rulebook.