Hood (iea) part 2 accounting ccxg gf march2014

Climate Change Expert Group www.oecd.org/env/cc/ccxg

GHG or not GHG:Accounting for diverse mitigation

contributions in the post-2020 climate framework

Christina Hood (IEA)

Based on the draft discussion paper by C. Hood, G. Briner and M. Rocha

CCXG Global Forum19 March 2014, Breakout Group B

2 Climate Change Expert Group

Session 2 (11.30-13h)

Double counting of mitigation

Forms of double counting

Examples of double claiming

Single-year targets and mitigation transfers

Options for “opt-in” rules for use of market or non-market mitigation transfers


Which transfers matter for accounting?

Two conditions under which transfers of mitigation outcomes matter for UNFCCC accounting:

Could include credits (offsets), allowance units from domestic emissions trading systems, or non-market transfers of mitigation outcomes

“Used” by a Party as counting directly towards a contribution under UNFCCC

Originating outside the boundary of that contribution(geographic, scope or temporal)

+


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 outcome claimed by two jurisdictions


Examples of double claimingParty A Party B How double claiming could arise

Quantified GHG

GHG inventory

Credit units generated in Party B are sold to Party A. Emissions reductions could be counted by both.



Quantified GHG

GHG inventory


Quantified GHG

Renewable energy capacity

If renewable energy target delivered in part by crediting mechanism (with units sold to Party A), could be double-counting of GHG reductions.



Quantified GHG

GHG inventory


Quantified GHG



Renewable energy (transfers)

Renewable energy (capacity)

With trade of green certificates between Party A and B, there is potential for double-counting if one Party accounts for the transfers and the other doesn’t.



Quantified GHG

GHG inventory


Quantified GHG



Renewable energy (transfers)

Renewable energy (capacity)

With trade of green certificates between Party A and B, there is potential for double-counting if one Party accounts for the transfers and the other doesn’t.

Quantified GHG

Production of clean electricity

If electricity is exported from Party B to Party A via grid interconnection, the GHG reductions could be counted by both Parties.


What do Parties want to “prevent”?

1. Prevent double counting in ex post reconciliation of actual transfers ? requires tracking of actual unit or non-market

transfers

2. Also prevent double counting in ex ante estimates of expected mitigation from national contributions ? requires restrictions on what types of

contributions can use market or non-market transfers


Contributions defined as single-year or multiple-year targets

Multiple Year Target 2020-30

Multi-year target avoids risk that emissions in single target year are unrepresentative of general trend

100Mt

20302020

90Mt

80Mt

2025

2030 target

Multi-year emissions target

Annual unit purchases

2030 inventor

y

Actual reported inventory emissions


Contributions defined as single-year or multiple-year targets

100Mt

20302020

90Mt

80Mt

2025

2030 target

2030 inventor

y

Actual reported inventory emissions

Total emissions and abatement less certain ex-ante

Gets complex when we think about “vintages”…


Ex-ante clarity on expected total abatement and national goals

3. Avoidance

• Ex post reporting of flows• Provide ex ante estimate of expected flows• GHG based contributions must account for flows, must be

multi-year.

• Ex post reporting of flows• Provide ex ante estimate of expected flows• Quantitative limit on units from Parties that do not

account for flows.• Units in single-year targets must be reflective of

continuous action

• Ex post reporting of flows*• Provide ex ante estimate of expected flows

Options for “opt in” to use of market or non-market transfers

2. Enhanced clarity

1. Transparency

*flows = issuance, retirement, transfers, banking

[PLUS: governance of systems, registry and tracking arrangements via FVA]


Questions for discussionShould double counting be prevented from occurring

ex ante, or only during ex post reconciliation of GHG emission levels and unit transfers?

If only Parties with certain types of contributions can “opt in” to use of market or non-market transfers, how can this be reconciled with existing participation in CDM or other market mechanisms?

To prevent “double claiming” between GHG and a non-GHG contributions, should Parties with non-GHG contributions have to adjust their reported outcomes?

Hood (iea) part 2 accounting ccxg gf march2014

Environment

Transcript of Hood (iea) part 2 accounting ccxg gf march2014