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Centre for Sustainable DevelopmentCould - or should - Scotland trade carbon credits in international carbon markets?

Lewis Cowie & Dr Jen Roberts (Civil and Environmental Engineering)

In November 2021, Scotland was in the spotlight for climate action: Glasgow was hosting the international climate conference, COP26. One of the focus points for the conference was international carbon markets, encapsulated within Article 6 of the Paris Agreement. Carbon trading has particular relevance for Scotland, as the nation has the potential to become carbon ‘net negative’ by 2050 (CCC, 2020; Vivid Economics, 2019). But under what conditions might Scotland become ‘net negative’? What scale of carbon credit production could be available in Scotland? How might international carbon trading in Scotland benefit or hinder Scotland’s climate ambitions, or influence global climate change mitigation? These are questions that MSc Sustainability and Environmental Studies student Lewis Cowie set out to explore during his studies.

Lewis Cowie

MSc graduate, Lewis Cowie. Lewis’s dissertation was motivated by his interest in international climate cooperation and Scotland’s natural habitats.

Under what conditions could Scotland reach- and go beyond- net zero?

Lewis only considered carbon trading if Scotland’s own carbon targets were met. This was to avoid the problem of ‘double counting’ of emissions. Double counting is specifically noted in the Paris Agreement, and refers to a situation in which the same emission reductions or removal are counted towards the environmental targets of two different nations. To avoid double counting, a country that sells carbon credits must remove that emission reduction from their own national records. To simplify these issues, Lewis considered only scenarios where Scotland met – or exceeded- its own climate goals.

Negative Emissions Technologies and carbon trading

The UK Climate Change Committee (CCC) Sixth Carbon Budget Report present 5 mitigation pathways for Scotland, each representing a projected route to net zero by 2050 under different political, behavioural and technological conditions (CCC, 2020). Negative emissions technologies, often referred to as ‘NETS’ (Figure 2), feature in all of the pathways considered. In 4 of the 5 mitigation pathways, the contribution of NETs are required for Scotland to meet its climate ambitions. Lewis concluded that NETs are therefore critical for Scotland to become net negative carbon.

But the question is should, not could…

To explore the role of NETs for carbon trading in more detail, Lewis asked a bunch of experts. They agreed that while Scotland could have potential to participate in international carbon markets, they were more concerned about whether Scotland should trade? Their feelings were cautious. A central concern regarded the environmental credibility of the carbon trading (i.e. the terms and conditions of Article 6, which remain unclear and how those conditions will be followed in practice).

“The devil will be in the detail of what Article 6 eventually looks like. Is it something that broadly looks kosher, or actually, a bit like its predecessors, is there a general view that it's a bit sketchy and therefore best avoided if possible?”- Interviewee July 2021

So, much uncertainty remains for carbon trading in Scotland. With NETs, it may be possible, but will it actually drive international climate mitigation? Or might it drive inaction? Those are questions that remain to be seen.

For a summary of the project and its outcomes, see here.