Prepare the Cookies: Combine butter, bittersweet chocolate, and unsweetened chocolate in a microwave-safe bowl, and microwave on HIGH until chocolate melts and mixture is smooth, about 1 minute, stirring every 15 seconds.
Beat chocolate mixture, granulated sugar, and brown sugar with an electric mixer on medium speed until well combined, about 3 minutes. Add eggs, 1 at a time, beating well after each addition. Add vanilla, and beat until incorporated.
Whisk together flour, baking soda, salt, and 3/4 cup of the cocoa in a bowl. Add flour mixture to chocolate mixture; beat on low speed until well combined, about 2 minutes. (Dough will be very soft.) Transfer half of dough onto plastic wrap, and wrap tightly, shaping into a disk. Repeat process with remaining half of dough. Chill dough 2 hours.
Preheat oven to 325°F. Let 1 dough disk stand at room temperature 10 minutes. Sprinkle work surface with 2 tablespoons of the cocoa. Unwrap dough disk, and roll to 1/4-inch thickness on cocoa. Cut with a 2 1/2-inch round cutter, rerolling scraps once. Place cookies 2 inches apart on parchment paper-lined baking sheets.
Bake in preheated oven until just set, about 8 minutes, switching pans top rack to bottom rack halfway through baking. Cool on pans 5 minutes; remove cookies to wire racks, and cool completely, about 30 minutes. Repeat process with remaining dough disk and 2 tablespoons cocoa.
Prepare the Icing: Beat powdered sugar, meringue powder, and 4 teaspoons of the water on medium speed until well combined, 3 to 4 minutes. Add up to 1 teaspoon more water, 1/4 teaspoon at a time, and beat until desired consistency is reached. Divide icing between 2 bowls. Stir in food coloring, 1 drop at a time, until icing reaches desired shades of red and green. Place icing into piping bags, and pipe trees onto tops of cookies. Sprinkle with sparkling sugar.
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