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Climate Change Expert Group www.oecd.org/env/cc/ ccxg.htm Presentation to SBSTA 8 June 2014 Addressing double counting of mitigation for diverse contribution types Christina Hood (IEA)

Addressing double counting of mitigation for diverse contribution types

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Addressing double counting of mitigation for diverse contribution types. Christina Hood (IEA). Presentation to SBSTA 8 June 2014. OECD/IEA papers on UNFCCC emissions accounting options. Concepts relevant pre- and post-2020. Outline. Double counting of mitigation - PowerPoint PPT Presentation

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Page 1: Addressing double counting of mitigation for  diverse contribution types

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

Presentation to SBSTA8 June 2014

Addressing double counting of mitigation

for diverse contribution

typesChristina Hood (IEA)

Page 2: Addressing double counting of mitigation for  diverse contribution types

2 Climate Change Expert Group

OECD/IEA papers on UNFCCC emissions accounting options

Concepts relevant pre- and post-2020

Page 3: Addressing double counting of mitigation for  diverse contribution types

3 Climate Change Expert Group

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

Page 4: Addressing double counting of mitigation for  diverse contribution types

4 Climate Change Expert Group

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

Page 5: Addressing double counting of mitigation for  diverse contribution types

5 Climate Change Expert Group

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)

+

Page 6: Addressing double counting of mitigation for  diverse contribution types

6 Climate Change Expert Group

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

Page 7: Addressing double counting of mitigation for  diverse contribution types

7 Climate Change Expert Group

Double Counting Solutions

Double Issuance

Strong governance of mechanisms for environmental integrity

Double Selling Robust registry/tracking arrangements

Double claiming between GHG targets

Understand by tracking/reporting transfersPrevent by rules/criteria

GHG/Non-GHG double coverage

Understand by tracking/reporting transfers

Page 8: Addressing double counting of mitigation for  diverse contribution types

8 Climate Change Expert Group

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

Emissions 100Mt Emissions 100Mt

10MtParty A

-10Mt

--------110Mt

--------90Mt

Party B

Inventory granularit

y?

Page 9: Addressing double counting of mitigation for  diverse contribution types

9 Climate Change Expert Group

What do Parties want to “prevent” ?

1. Prevent double counting in aggregate ex post reconciliation of total mitigation ? track actual unit and non-market useEnables understanding of double claiming to prevent double counting of

aggregate emissions reductions

2. 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)

Page 10: Addressing double counting of mitigation for  diverse contribution types

10 Climate Change Expert Group

Double counting via “double coverage” of GHG/non-GHG

targetsParty A Party B How double counting could arise

Quantified GHG target

Renewable energy (capacity)

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

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 target

Production of clean electricity

If electricity is exported from Party B to Party A via grid interconnection, the mitigation could be counted by both Parties.Understand by tracking/reporting

transfers

Page 11: Addressing double counting of mitigation for  diverse contribution types

11 Climate Change Expert Group

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

Page 12: Addressing double counting of mitigation for  diverse contribution types

12 Climate Change Expert Group

Multiple-year target

100Mt

20302020

90Mt

80Mt

2025

2030 target

Multi-year emissions target

Annual unit purchases

2030 inventor

y

Actual reported inventory emissions

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

Facilitates use of market mechanisms

Page 13: Addressing double counting of mitigation for  diverse contribution types

13 Climate Change Expert Group

Single-year target

100Mt

20302020

90Mt

80Mt

2025

2030 target

2030 inventor

y

Actual reported inventory emissions

Ex ante uncertainty over total emissions due to unknown path to target

Page 14: Addressing double counting of mitigation for  diverse contribution types

14 Climate Change Expert Group

Single-year target

100Mt

20302020

90Mt

80Mt

2025

2030 target

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

2030 inventor

yActual reported inventory

emissions

Page 15: Addressing double counting of mitigation for  diverse contribution types

15 Climate Change Expert Group

Options for use of mitigation transfers with single year targets

Report unit use

• allows ex-post reconciliation• poor ex-ante estimation

Quantitative limit

• Reduces ex-ante uncertainty

Target year vintage only

• Impractical (supply ongoing) • Prone to gaming (Scneider et

al.)

Only units from ongoing action

• If units are retired for multi-year goals (e.g. domestic ETS), then ok

Disallow • Only continuous multiyear goals can use transferred mitigation

Page 16: Addressing double counting of mitigation for  diverse contribution types

16 Climate Change Expert Group

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

Page 17: Addressing double counting of mitigation for  diverse contribution types

17 Climate Change Expert Group

Ex-ante clarity on expected total abatement

and national goals

3. Avoidance of double claiming

•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 issued by Parties with GHG goals that do not account for flows.•Units in single-year targets must be reflective of continuous action

Packages of rules for Parties “opting in” to use of market or non-market

transfers

2. Enhanced clarity

1.Transparency Approach

*flows = issuance, retirement, transfers, banking

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

Page 18: Addressing double counting of mitigation for  diverse contribution types

18 Climate Change Expert Group

Thank you for your attention

GHG or not GHG: Accounting for diverse mitigation contributions in the post-2020

climate frameworkChristina Hood ([email protected])

Gregory Briner ([email protected])

Marcelo Rocha

www.oecd.org/env/cc/ccxg.htm