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Addressing Double Counting of Mitigation Contributions: Rules for Market and Non-Market Transfers

This presentation by Christina Hood at SBSTA outlines the critical issue of double counting in emissions mitigation. It discusses the implications of mitigation transfers under single-year targets and explores potential rules and criteria for parties opting to use market or non-market mechanisms. The session highlights conditions under which transferred mitigation impacts UNFCCC accounting practices, ensuring clarity and transparency in emissions reporting. The importance of preventing double counting in both aggregate mitigation and ex-ante estimates is emphasized, along with options for enhancing tracking and reporting.

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Addressing Double Counting of Mitigation Contributions: Rules for Market and Non-Market Transfers

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Presentation Transcript

  1. Addressing double counting of mitigation for diverse contribution types Christina Hood (IEA) Presentation to SBSTA 8 June 2014

  2. OECD/IEA papers on UNFCCC emissions accounting options Concepts relevant pre- and post-2020

  3. Outline • Double counting of mitigation • Mitigation transfers with single-year targets • Potential rules/criteria for “opt-in” to use of market or non-market mitigation transfers

  4. Outline • Double counting of mitigation • Mitigation transfers with single-year targets • Potential rules/criteria for “opt-in” to use of market or non-market mitigation transfers

  5. Which transfers matter for accounting? • Two conditions under which transfers of mitigation matter for UNFCCC accounting: • Could include credits (offsets), allowance units from domestic emissions trading systems, or non-market transfers “Used” by a Party as counting directly towards a contribution under UNFCCC + Originating outside the boundary of that contribution(geographic, scope or temporal)

  6. Double counting of mitigation • “Double issuance” = more than one unit issued for the same emissions reductions • “Double selling” or “double retirement” = same unit used more than once towards emissions obligations • “Double claiming” against pledges/targets = same mitigation claimed by two jurisdictions • “Double coverage” of transferred mitigation by GHG and non-GHG targets leading to double counting

  7. Double claiming example • Emissions inventory total = 90+110 = 200Mt • If Party A DOES NOT account for export but party B DOES account for import, then declared total = 90+100 = 190Mt -10Mt Party A Party B 10Mt Inventory granularity? --------90Mt Emissions 100Mt Emissions 100Mt --------110Mt

  8. What do Parties want to “prevent” ? • Prevent double counting in aggregate ex post reconciliation of total mitigation ? • track actual unit and non-market use Enables understanding of double claiming to prevent double counting of aggregate emissions reductions • Also prevent or limit double counting in ex ante estimates of expected mitigation ? • requires rules for market or non-market use • e.g. quantitative limits on use of transferred mitigation from jurisdictions that do not account for unit flows (i.e. limit double claiming) • e.g. GHG goals must account for unit flows (i.e. prevent double claiming)

  9. Double counting via “double coverage” of GHG/non-GHG targets Understandby tracking/reporting transfers

  10. Outline • Double counting of mitigation • Mitigation transfers with single-year targets • Potential rules/criteria for “opt-in” to use of market or non-market mitigation transfers

  11. Annual unit purchases Actual reported inventory emissions Multiple-year target 2030 inventory 100Mt 90Mt Multi-year emissions target 80Mt 2030 target 2020 2025 2030 • Multi-year target avoids risk that emissions in single target year are unrepresentative of general trend • Facilitates use of market mechanisms

  12. Actual reported inventory emissions Single-year target 2030 inventory 100Mt 90Mt 80Mt 2030 target 2020 2025 2030 • Ex ante uncertainty over total emissions due to unknown path to target

  13. 2030 inventory Actual reported inventory emissions Single-year target 100Mt 90Mt 80Mt 2030 target 2020 2025 2030 • Ex ante uncertainty over total emissions due to unknown path to target • Ex ante uncertainty amplified by use of units in target year • Gets complex when we think about “vintages” of units

  14. Options for use of mitigation transfers with single year targets

  15. Outline • Double counting of mitigation • Mitigation transfers with single-year targets • Potential rules/criteria for “opt-in” to use of market or non-market mitigation transfers

  16. Packages of rules for Parties “opting in” to use of market or non-market transfers 1.Transparency Approach Ex-ante clarity on expected total abatement and national goals • Ex post reporting of flows • Provide ex ante estimate of expected flows • Quantitative limit on units issued by Parties with GHG goals that do not account for flows. • Units in single-year targets must be reflective of continuous action 2. Enhanced clarity • Ex post reporting of flows* • Provide ex ante estimate of expected flows • Ex post reporting of flows • Provide ex ante estimate of expected flows • GHG based contributions must account for flows, must be multi-year. 3. Avoidance of double claiming *flows = issuance, retirement, transfers, banking [PLUS: governance of systems, registry and tracking arrangements]

  17. Thank you for your attention GHG or not GHG: Accounting for diverse mitigation contributions in the post-2020 climate framework Christina Hood (christina.hood@iea.org) Gregory Briner(gregory.briner@oecd.org) Marcelo Rocha www.oecd.org/env/cc/ccxg.htm

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