The climate protection goals of the UN COP26 include new technologies and a CO2 tax. In her monthly expert column, Selva Ozelli, international tax attorney and auditor, delves into the interface between new technologies and sustainability, while introducing the latest tax developments, AML / CFT regulation and regulatory issues related to cryptocurrency and blockchain.
The United Nations Climate Change Conference (COP26) 2021, at which I exhibit my work, took place in Glasgow, Scotland and ended with the passage of the Glasgow Climate Compact, which brings together nearly 200 countries to keep the global temperature rise below 1.5 by 2100 ° C to keep degrees Celsius. .
The conference continued to focus more on emissions reductions than on terms of industrialized country support for developing countries, as outlined in UN-Electricity’s High-Level Symposium Summary, Ministers, Recommendations and Key Milestones for Achieving Sustainable Goal 7 Development outlines, and net zero emissions. The key elements of the global roadmap include:
- Closing the energy access gap: Providing electricity to the 760 million people without electricity worldwide. Ensuring clean energy cooking solutions for the 2.6 billion people who depend on toxic fuels.
- Fast transition to clean energy: Remove all coal-fired power plants in the pipeline and reduce coal-fired power plant capacity by 50% by 2030. Quickly scale energy conversion solutions to reach 8,000 gigawatts of renewable energy by 2030 by increasing the annual energy efficiency rate from 0.8% to 3.%.
- Leave no one behind: Integrating equity and equity into energy sector policies through planning and financing, green energy job creation, and integrating energy sector policies and strategies into strategies and strategies.
- Full and oriented financial mobilization: Invest triple in clean energy around the world by 2030 to accelerate access to finance. Eliminate inefficient fossil fuel subsidies to support a market-based transition to clean energy. Establish an enabling regulatory and policy framework to encourage private sector investment in clean energy.
- Leverage innovation, technology and data: Expand innovative energy supplies to fill key gaps and increase demand for clean, sustainable energy innovation and technology through market-oriented policies, harmonized international standards and infrastructure.
As the first climate summit to explicitly “get rid of coal”, COP26 made history and laid down new rules for carbon market mechanisms, often referred to as Article 6. A recent research paper estimates that establishing a global carbon market will save the world around $ 300 billion a year by 2030.
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Article 6 of the Paris Agreement, which governs international cooperation – including carbon markets – laid down new rules for trading in emission allowances, which represent one tonne of CO2 that has been reduced or removed from the atmosphere. The new rules create an accounting system to avoid double counting emissions reductions and consist of two parts: a centralized system open to the public and private sectors and a separate music system that would allow countries to buy and add credit Selling. that they can use to achieve their decarbonization goals.
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Joseph Pallant, Director of Climate Innovation at Ecotrust Canada and Founder and CEO of Blockchain for Climate Basis, explained to me:
“The results of the emission reduction are the most important and will soon be the most valuable commodity in the world.”
He continued: “The Ethereum-based BITMO platform enables cross-border collaboration on reducing emissions, sharing the benefits of clean energy, natural climate solutions and better infrastructure for all parts of the world.”
The BITMO platform is a Blockchain for Local Climate Basis project that it created to promote Article 6 of the Paris Agreement and use blockchain technology to create a more efficient global carbon market. It enables the issue and exchange of “Blockchain International Transfered Mitigation Results” (BITMO) on the Ethereum blockchain as a non-divisible token (NFT) ERC-1155. Each token represents one tonne of CO2, and the associated CO2 credit data is embedded in the NFT.
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Article 6 aims to combine mitigation opportunities with resources and needs around the world. In order for the global carbon market to reflect actual emissions reductions, the accounting infrastructure must ensure integrity and collaboration and avoid double counting of emissions. The BITMO platform acts as a security protocol for the internationally transmitted adoption, transmission and removal of reduction results from each country, which in the future can be integrated or regulated with CO2 register countries and the requirements of the United Nations Framework Convention on Climate Change. BITMO helps to achieve global climate goals by simply displaying all relevant data, making it available to the public and being immediately resolved when exchanged, thereby avoiding double counting of emission reductions.
Tax on the burning of fuel
One of the other major points of discussion between world leaders at the COP26 conference in Glasgow, according to the World Bank, was the introduction of a carbon tax that shifts responsibility for the consequences of climate change on to those in need. There are currently 69 countries that tax CO2, which ranges from $ 1 to $ 139 per tonne.
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The administration of US President Joe Biden has outlined $ 555 billion spending to combat climate change under the Rebuild Better Act, which includes a proposed methane charge to encourage oil and gas companies to reduce their methane emissions.
Wolkenstein Özelli, Esq., CPA, is an international tax attorney and certified public accountant who regularly writes for Tax Notes, Bloomberg BNA, other publications and the OECD on tax, legal and accounting issues.