CCXG Oct 2019 Article 6 - Accounting and environmental integrity - MJ Mace

1. Part II: Article 6 – Accounting and
environmental integrity
(safeguards, limits and review)
M.J. Mace
IEA/OECD Climate Change Expert Group (CCXG)
Paris
October 2, 2019

2. Environmental integrity risks
• Key areas of concern to be addressed through safeguards:
– quality of reductions
– quality of cooperative approaches
– double counting
– hot air
– overselling
– transfers in sectors with a high degree of uncertainty in emission
estimates
– supplementarity – ensuring domestic mitigation efforts take
precedence
– Insufficient oversight over reductions / programmes
– Carryover/banking undermining ambition
– Single year – multi-year NDCs
– Over-allocation within ETSs
• various kinds of safeguards can be considered
– quantitative or other

3. Simple fixes to multiple problems:
• CO2eq accounting
– Manages risk of mismatched metrics
• Inside scope
– Manages perverse incentives
– Improves oversight
• Prohibit carryover
– Manages hot air
– Addresses need for progression over time
– Supports highest possible ambition
• Automatic OMGE % cancellation / discounting across 6.4 and 6.2
– Responds to 6.4(d) mandate – operationalizes provision
– Creates buffer for environmental integrity applied to 6.2
– Addresses 6.4 / 6.2 balance – retain intended benefits of 6.4
– Enhances ambition
– Shares benefit of cost savings
– Shares benefit of Article 6 across all Parties – greater abatement
– 5% SOP and X/10/20/30% OMGE – decisions taken now guarantee long-term
delivery

4. Simple fixes to multiple problems:
• Make best use of reporting and review tools
– Structure authorisation process to avert problems (e.g., double
counting, overselling)
– Require verification process for all outcomes/reductions / activities
– Manage perverse incentives
– Improve oversight
– Avoid BTR lags with Article 6 specific reporting, accounting review
requirements and consequences
• Centralised accounting and recording platform (CARP)
– Expose problems early
– Enable identification of discrepancies (e.g., in corresponding
adjustments)
– Bring 6.2 and 6.4 information together
– Reflect real time information – not subject to BTR lags
• Threat of consequences, e.g., adjustments, identification of
inconsistencies

5. Centralized accounting and recording
platform (CARP) functions
Enables consequences – whether political or practical:
•Record and compile information on corresponding adjustments
•Track all ITMOs (both A64ERs and Art 6.2 ITMOs) that are first transferred,
transferred, acquired, held cancelled and/or used by participating Parties,
including the identify of source party, vintage of reduction, activity type, sector
(e.g., maintaining information on unique identifiers) in a single place
•Receive information from Parties’ annual Article 6 reports
•But also receive real time information on first transfers and corresponding
adjustments, submitted by Parties between annual reports
•Contain links to information on cooperative approaches
•Generate annual reports
•Maintain quantitative information on amounts forwarded in connection with the
share of proceeds for adaptation
•Maintain quantitative information on amounts cancelled/discounted in
connection with an overall mitigation in global emissions
•Support reviews