September 25, 2015 Sacramento, CA Frédéric DINGUIRARD WB PMR Expert Connecting registries Workshop...

September 25, 2015Sacramento, CA

Frédéric DINGUIRARDWB PMR Expert

Connecting registries

Workshop “Building Registries to Support the Next Generation of Carbon Markets”

Partnership for Market Readiness

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1. Placing the registry in its environment2. Accounting for inter-registries transfers3. Connecting registries4. Communication protocols5. Transaction logs

Content

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Placing the registry in its environment

Post-Market

Registry (Domestic Scheme)

Other Registries (NAMA Registry, Voluntary standards registries…)

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Post-Market

Registry (Domestic Scheme)

Other Registries (NAMA Registry, Voluntary standards registries…)

GHG Emission Reductions Databases

Projects Database

Activities Database

List of approved entities

GHG Emission Databases

Facility level GHG reporting tools(verified emissions)

Market

Auctioning platform

Trading Platform

Placing the registry in its environment

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Post-Market

Registry (Domestic Scheme)

Other Registries (NAMA Registry, Voluntary standards registries…)

GHG Emission Reductions Databases

Projects Database

Activities Database

List of approved entities

GHG Emission Databases

Facility level GHG reporting tools(verified emissions)

Market

Auctioning platform

Trading Platform

Supporting Services complementing the registry

Scheme Participants:Compliance BuyersBrokers & Offset retailersProjects developersDonors and financial institutionsVoluntary Buyers…

Central Communication Hub(transactions checks and

reconciliation)Reporting and archiving

Participants Database & Customer Relationship

Management

Workflow Automation & Documents management

Suspicious Patterns Detection

Placing the registry in its environment

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1. Placing the registry in its environment2. Accounting for inter-registries transfers3. Connecting registries4. Communication protocols5. Transaction logs

Content

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Accounting for inter-registries transfers Internal (same platform): e.g. CITSS Linking (bilateral): Units can be transferred from one registry to the

other, and vice versa e.g. Kyoto registries Definitive transfer: consists of canceling the units in the exporting

registry to re-issue it in the importing registry. Such re-issuance may be done against a “proof of cancelation” generated by the exporting registry (administrator) to avoid double counting issues. E.g. Ax1 to VCS

“Mirror" accounting: units are stored in a special account of the exporting registry and are virtually reflected in the importing registry where it can then be subject to transfer and/or cancelation operations. For example, this is how accounting is managed for the VCS

program when transfers take place between the two VCS registries: unit actually never leave the registry in which they were initially issued, and where they will be cancelled.

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Accounting for inter-registries transfers

Domestic "mirror" accounting: reconciliation issue

Account Holder X

Competent Authority

Cancellation

Account Holder Y

Competent Authority

Cancellation

Account Holder Z

Competent Authority

Cancellation

Registry A Registry B Registry C

Domestic Scheme : imported units

q1 q2 q3

Account Holder D Account Holder E Account Holder F Account Holder G

Account Holder KAccount Holder JAccount Holder H

q4 q5 q6 q7

q8 q9 q10

Manual Reconciliationq1+q2+q3=qiAnd

C1 = C2+C3+C4

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Cancellation

C4

C1

Exit

qe

C3C2

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1. Placing the registry in its environment2. Accounting for inter-registries transfers3. Connecting registries4. Communication protocols5. Transaction logs

Content

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IT Architecture connecting registries Shared Registry (single IT platform)

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IT Architecture connecting registries

Peer-to-peer vs. Central Hub

Security? Scalability? Reconciliation process?

Central Hub

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IT Architecture connecting registries Peer-to-peer vs. Central Hub

  Advantages Disadvantages

Central hub

- Scalability- Same treatment for all transactions- Easier reconciliation - Cost and complexity are

centralized and mutualized- Imposes a same level of security to

all registries- Availability of the DES

- Sovereignty on data- High costs if few registries are connected

Peer-to-peer

- Enables specific modes of exchange with certain registries

- Potentially lower cost and less complex if only two registries are connected without automation

- Increasing the number of registries connected increases complexity and costs and reduces responsiveness to change

- A security flaw in the connection between two registries poses a risk to the whole system

- Complex reconciliation process

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1. Placing the registry in its environment2. Accounting for inter-registries transfers3. Connecting registries4. Communication protocols5. Transaction logs

Content

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Communication protocols

Definition A system of rules enabling registries to communicate Standardized (central hub) or potentially specific (peer to

peer)

Benefits of a communication protocol Integrity: Inter-registry transfers are completed or cancelled

consistently in both registries Reliability: Common processes and rules for transfers and for

error detection (e.g. timeouts and retries) Comparability:

- Standardized messages and sequences- Shared data format and nomenclatures

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1. Placing the registry in its environment2. Accounting for inter-registries transfers3. Connecting registries4. Communication protocols5. Transaction logs

Content

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Transaction logs

Purpose Checking for accounting consistency, network-wide Record Keeping

Main Benefits Real time checks, and error solving processes Traceability of all transactions Archiving

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Registry connections in practice Examples: ITL and EUTL

European Union Transaction Log

Other supplementary transaction log

International Transaction Log Communication Hub

CDM Registry

NationalKyoto

Registry

NationalKyoto

Registry

NationalKyoto

Registry

NationalKyoto

Registry

AccountingFor NationalCommitments(Kyoto Protocol)

Source: Unfccc

Kyoto checks

Supplementarychecks

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Transaction logs Examples: ITL and EUTL

European Union Registry (EU ETS)

European Union Transaction Log

Other supplementary transaction log

CDM Registry

NationalKyoto

Registry

NationalKyoto

Registry

NationalKyoto

Registry

NationalKyoto

Registry

AccountingFor NationalCommitments(Kyoto Protocol)

EU ETS units

Source: Unfccc complemented by the author

Kyoto checks

Supplementarychecks

“Domestic Market Mechanisms”

International Transaction Log Communication Hub

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Transaction logs Examples: ITL and EUTL

European Union Registry (EU ETS)

European Union Transaction Log

Other supplementary transaction log

CDM Registry

NationalKyoto

Registry

NationalKyoto

Registry

NationalKyoto

Registry

NationalKyoto

Registry

AccountingFor NationalCommitments(Kyoto Protocol)

EU ETS units

Kyoto units eligible for EU ETS compliance

Source: Unfccc complemented by the author

Kyoto checks

Supplementarychecks

“Domestic Market Mechanisms”

International Transaction Log Communication Hub

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Shared IT for registries Examples: ITL and EUTL

Single IT PlatformEU Registries (CSEUR)

European Union Transaction Log

Other supplementary transaction log

CDM Registry

NationalKyoto

Registry

NationalKyoto

RegistryCSEUR CSEUR

Kyoto checks

Supplementarychecks

AccountingFor NationalCommitments(Kyoto Protocol)

“Domestic Market Mechanisms”

EU ETS units

Kyoto units eligible for EU ETS compliance

Source: Unfccc complemented by the author

International Transaction Log Communication Hub

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Frédéric DINGUIRARDPMR Expert

fdinguirard@yahoo.fr

For more information on the Partnership for Market Readiness, please contact:

PMRSECRETARIAT@WORLDBANK.ORGWWW.THEPMR.ORG

Thank You for Your Attention