In December of this year, delegates to the 25th Conference of the Parties (COP-25) of the United Nations Framework Convention on Climate Change (UNFCCC) will assemble in Santiago, Chile, for two weeks of negotiations. The location for the Conference was changed to Santiago when the Chilean government graciously stepped in as host after the Brazilian government reneged – two months after winning the bid and one month after the election of President Jair Bolsonaro – on its previous commitment to host COP-25.
The previous year, COP-24 took place in Katowice, Poland. As I’ve previously written at this blog (”Climate Negotiations in Poland Advanced Implementation of the Paris Agreement”, December 20, 2018), the delegates at that Conference reached consensus on a 156-page “Rulebook” that filled in important details for 28 of the 29 articles of the skeletal Paris Agreement. Consensus was not reached on one very important part of the Agreement, Article 6, the home for international cooperation that can bring down costs, and thereby facilitate greater ambition.
This presents a major challenge for the delegates to this year’s COP as they seek to complete the Rulebook with details for Article 6; in particular, how to facilitate a robust system of international cooperation (that allows for international carbon markets) while avoiding the possibility of double counting of emissions reductions, that is, counting the same emission reduction more than once when assessing progress towards the achievement of climate mitigation targets.
This is the topic of an article that appeared very recently in Science, “Double Counting and the Paris Agreement Rulebook,” which I had the pleasure of co-authoring with an international set of colleagues – Lambert Schneider, Maosheng Duan, Kelley Kizzier, Derik Broekhoff, Frank Jotzo, Harald Winkler, Michael Lazarus, Andrew Howard, and Christina Hood. In this blog essay, I provide a brief summary, which I hope will entice readers to check out the full version in Science (Volume 366, Issue 6462, pp. 180-183, October 11, 2019).
It is important to distinguish among three distinct yet closely related levels of actions in regard to international cooperation under Article 6 of the Paris Agreement:
First, national or regional jurisdictions can establish domestic policies, such as emissions trading systems, carbon taxes, or performance standards, for the purpose of achieving the targets specified in their respective Nationally Determined Contributions (NDCs) under the Agreement.
Second, jurisdictions can link their respective domestic policy instruments, as, for example, California and Quebec have done, allowing allowances to be traded across international borders. Such linkage was the subject of a previous article in 2018 in Science I co-authored with Michael Mehling and Gilbert Metcalf (a more complete version of that work appeared in the periodical, Environmental Law, earlier this year).
Third, and the focus of the new Science article and this blog essay, Article 6.2 provides a potential home for accounting mechanisms (“Internationally Transferable Mitigation Outcomes” or ITMOs, and “Corresponding Adjustments”) that can properly take account of such international transfers when demonstrating achievement of national targets under the Paris Agreement.
The Risk of Double Counting
If two different jurisdictions, such as two countries with their own NDCs, were both to take credit for the same emission reductions, there would be double counting under the Paris Agreement, which would be a significant threat to the integrity of the Agreement and any carbon markets employed in its implementation. Given that half of the Parties of the Paris Agreement have indicated their intention to participate in carbon markets, avoiding (that is, reducing the risk of) such double accounting is critical for the credibility of the Paris regime. A robust system to account for international transfers of emission reductions is necessary.
As my co-authors and I explain in the Science article, Article 6.2 of the Agreement provides the needed accounting framework through provision for “corresponding adjustments,” which can function as a form of double-entry bookkeeping. But despite the fact that the Paris Agreement is explicit that double counting should be avoided, some Parties to the Agreement disagree about how it should be avoided, and indeed, about what constitutes double counting. In addition, there is some controversy related to how much international oversight is needed to ensure robust accounting
The Path Ahead
Success at COP-25 in Santiago is critical. In our Science article, my co-authors and I propose several principles to guide the negotiations. I will mention just two of these in this brief essay.
First, a single set of common international accounting rules should apply under the Paris Agreement, irrespective of what type of carbon market mechanism is used to generate emission reductions.
Second, effective accounting will be greatly facilitated by all countries adopting targets (NDCs) that are economy-wide, cover all GHGs, apply to common multi-year time periods, and are expressed as GHG emissions. The Paris Agreement expressly foresees that countries will move toward such economy-wide targets over time.
If international cooperation is to combat climate change cost-effectively, the Paris Agreement needs to employ rules for international carbon markets that ensure environmental integrity and avoid double counting. Otherwise, carbon markets may sadly undermine the Paris climate agreement.