UN climate talks: what's on the agenda in Madrid and what it means for Australia

For two weeks at the end of every year, the world’s governments meet to work on a global response to climate change. This year is the 25th meeting of what is known as the conference of the parties under the United Nations Framework Convention on Climate Change. Those who attend know it as COP, or COP25.

Here’s what you need to know about this year’s talks, which started on Monday in Madrid, and what they could mean for Australia.

What is Australia’s status at the UN climate talks?

There are nearly 190 countries represented at the UN climate talks and, contrary to some perceptions, Australia is not just a bit player.

Under UN greenhouse accounting, Australia is responsible for about 1.3% of annual pollution, which places it 16th on a ladder of polluting nations. It emits more each year than 40 countries with larger populations, including G7 members Britain, France and Italy.

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On other measures Australia performs worse. It emits more per person than any other developed country (and far more than most developing countries), and a recent analysis found it was third for exported emissions.

It is the world’s biggest seller of coal, particularly metallurgic coal used in steel-making, and either number one or two for natural gas. It is easily the largest emitter in the south Pacific, and has been increasingly drawing criticism from Pacific leaders for not doing more to tackle the issue.

As the talks began last week, Australia was at the forefront of the climate emergency in other ways, as drought and bushfires made global headlines. Scientists say both are unprecedented and in line with climate projections.

Observers such as Howard Bamsey, the country’s former special envoy on climate change, say events in Australia are noticed and could be used to influence other countries to do more. But the government’s message is defensive and focuses on is its own actions: that it has set a 2030 emissions reduction target, that it has met previous targets and that it will meet this one.

Who is representing Australia?

Australia has a 21-strong delegation from the Department of Foreign Affairs and Trade, led by Jamie Isbister, a senior diplomat who was appointed environment ambassador less than three weeks ago.

Related: Australian businesses, unions and farmers say Paris agreement requires zero emissions plan

In the second week’s political stage, Australia will be represented by Angus Taylor, the minister for energy and emissions reduction. It is his first time at climate talks.

He arrives under pressure on several fronts, including a police investigation into the origin of a doctored document he used to attack the lord mayor of Sydney, allegations relating to the clearing of endangered grasslands and a bizarre public spat with American author Naomi Wolf.

How is Australia positioning itself?

Australia is a member of what is known as the umbrella group of countries – a coalition of mostly developed nations outside the EU, including Canada, Japan, New Zealand, Norway, Russia, Ukraine and the US (which has a big delegation despite planning to leave the Paris agreement next year). The group doesn’t agree on everything but works together when like-minded.

Observers say the first week of talks have been slow. Australia is in a camp that does not want the meeting to focus on increasing the ambition of targets volunteered under the Paris deal and emphasises the need to implement what has already been agreed.

Non-government groups say it is a concerning sign ahead of the next summit in Glasgow at the end of 2020, when countries are meant to come armed with new commitments to move the world closer to the goals agreed in Paris: limiting industrial global warming to well below 2C and as close to 1.5C as possible.

According to a UN report published before the talks, global emissions must fall by about 7.6% a year for the next decade to give a chance of meeting the 1.5C goal. Current targets would result in more than 3C warming, considered a disastrous scenario that would trigger dangerous tipping points.

Scott Morrison has indicated Australia has no plan to increase what it is doing beyond its 2030 target of a 26-28% cut compared with 2005 levels, which is less than what government advisors found would be Australia’s fair share or it could afford to do.

The prime minister has not acknowledged what groups representing business, unions, farmers, investors and the social policy sector this week spelled out in a joint statement – that the goals of the Paris agreement mean Australia will need to plan to stop emitting any carbon dioxide.

Australia’s emissions are not coming down and most experts believe it is not on track to meet its target. But the government released two sets of data before Taylor left for Madrid to buttress his argument that the country has “a track record of which all Australians can be proud”. The first used newly adjusted emissions data to suggest national pollution was basically flatlining, and had dipped slightly over the past two years, rather than increasing year-in-year as the greenhouse accounts had previously shown.

The second updated projections of how much pollution will be released to 2030 and found, contrary to other evidence, the country was expected to meet its Paris target. It did this by including an accounting loophole known as carryover credits. More on that in a moment.

Environment and other civil society groups at the conference have highlighted Morrison’s language on climate change. They twice last week awarded Australia a “fossil of the day” award, the climate talks equivalent of a Razzie. One was for a tweet he sent from the cricket about the fires.

Are carryover credits a big issue at the talks?

Potentially.

Beyond holding the line on targets, Australia’s most prominent negotiating position is using they credits.

They are an accounting measure that allows countries to count emissions cuts from exceeding previous targets against future targets. They were allowed under the soon-to-be-obsolete Kyoto protocol. They are not mentioned in the Paris agreement and Australia is the only country planning to use them under it.

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Australia accrued the credits after setting unambitious targets, including that it would increase national emissions by up to 8% between 1990 and 2012. The government says it will have credits equivalent to 411m tonnes of carbon dioxide to use against its Paris target, effectively cutting what it needs to do in new emissions reductions by more than half.

Critics say it is exploiting a loophole. Under UN rules, the carryover credits can only be banned through consensus, and the Australian delegation made clear in pre-COP briefings that it would not agree to that. But this may not be the end of the discussion. Several countries, including Britain, the European Union, Canada and Pacific nations, have either raised doubts or said outright they should not be used.

Analysts say use of the carryover would be at odds with other clear principles set out in the Paris deal. The text of the agreement says countries will make national commitments that are more ambitious through time and reflect the “highest possible ambition”. Some groups, such as the Investor Group on Climate Change, representing institutional investors with $2tr in funds, say use of carryover credits is inconsistent with the agreement because it reduces the action taken.

A potential scenario is that developing countries introduce an effective ban on using Kyoto carryover credits into the draft text that governments are negotiating over.

Richie Merzian, a former government climate negotiator, now director of the climate and energy program with The Australia Institute, says the Morrison government has yet to formally declare to the UN that it plans to use carryover credits. They do not appear in the statement submitted under the Paris deal explaining how Australia would meet its target.

“If the government is gung-ho on this, then it should back itself,” Merzian says from Madrid.

What else is on the agenda?

A major issue is what is known as Article 6, the part of the Paris rulebook that aims to revive a global carbon market that would help countries cut emissions by paying for measures that reduce pollution in developing countries. The credits generated through these markets differ from carryover credits, as they are tied to actual emissions cuts.

Debate over Article 6 is looking at carbon market design and operation and what to do about concerns that some countries led by Brazil are trying to “double count” by claiming emissions reductions for credits sold to wealthy nations.

The Australian business community has been concerned in the lead-up to the talks that Article 6 may not be resolved. The government’s position is arguably contradictory. Morrison was a frequent pre-election critic of Labor’s plan to use international credits, but supports their use in negotiations.

But Bill Hare, the chief executive and scientist at Climate Analytics and an adviser to small developing countries, says Australia is not working to ensure the rules guarantee that the use of offsets always results in real emissions reductions. “I think it’s all about having the ultimate flexibility in what countries want to do, rather than rigorous or accountable oversight,” he says.

What happens at the conclusion?

However the conference ends, the negotiations push on. Next year will be a major test of whether many countries are prepared to deliver on the pledge made in Paris and ramp up commitments before meeting again in to Glasgow.

In Australia, the environment department has been quietly working on a long-term climate strategy that is expected to be released for feedback in the new year. Thus far the government has said little to indicate what that might involve.