Reporting, Review and Reporting, Review and Compliance under the Compliance under the

Kyoto Protocol: the Case of Kyoto Protocol: the Case of

Initial ReportInitial ReportVERTIC/REC Workshop

9-10 October 2006

Katia SimeonovaManager

Reporting, Data and Analysis Programme

Kyoto ImplementationKyoto Implementation

Compliance

Decision 27/CMP.1

Mechanisms and domestic measuresDecisions 2//CMP.1, 3/CMP.1,

5/CMP.1, 9/CMP.1, and 11/CMP.1

Accounting, Reporting and Review

Decisions 13/CMP.1, 15/CMP.1,16/CMP.1,

20/CMP.1 and 22/CMP.1

Implementation

Eligibility criteria

Preparation of the Initial ReportPreparation of the Initial Report

Initial ReportInitial Report Modalities for accounting for assigned

amount, under Article 7.4 (Decision 13/CMP.1):

Report due prior to 1 January 2007, or one year after the entry into force of the Kyoto Protocol for a Party

“Each Party shall facilitate the calculation of its assigned amount pursuant to Article 3, paragraphs 7 & 8, for the commitment period and demonstrate its capacity to account for its emissions and assigned amount. To this end, each Party shall submit a report in two parts.”

Elements of Initial ReportElements of Initial Report

Part One of report: Complete national inventoryBase year for F-gasesBurden-sharing agreement under Article 4Calculation of its assigned amount

Part two:Calculation of commitment period reserveIdentification of values for activities under Article 3.3

and 3.4 (LULUCF definitions)Election of activities under 3.4 and accounting period

for eachDescription of National SystemDescription of Registry

National systemNational system Required for estimation of GHG emissions

and removals To be established by 1 January 2007 Provide information on institutional, legal

and procedural arrangements necessary to produce reliable inventory

Problems with national system could prevent Party

from participating in Kyoto mechanisms

National system (continued)National system (continued) Requirements are functional, including:

Single national entity with inventory responsibilityRoles and responsibilities of various agencies

participating in inventory planning and preparationInventory planning (define responsibilities,

choice of methods, data and emission factors)Inventory preparation (use of IPCC good practice

guidance, data collection, inventory uncertainty)Key source analysis and recalculation of previously

submitted inventoriesQuality assurance and quality control procedures Reporting and archive inventory information

National greenhouse gas inventoryNational greenhouse gas inventory

All gases and sources (completeness)Estimates of Article 3.3/4 LULUCF emissions/removals

not included until commitment period

Full geographic coverage

Base year inventory, complete and consistent time-seriesAll years from base year up to most recent available

Use of methods consistent with IPCC methodologiesand IPCC Good Practice Guidance

Submitted in standardized electronic reporting tables (common reporting format)

National inventory report (description of methods used, data sources, etc)

Land use, land-use change and Land use, land-use change and forestryforestry

Definitions for LULUCF parameters (e.g. minimum width of forest area)Example of Hungary: minimum land area (0.5

ha), minimum width of forest area (10m), minimum tree crown cover (30%) and height (5m)

Elections of activities under Article 3.4Example of Hungary: elects forest management

(does not elect crop land management, grazing land management and revegetation)

Land use, land-use change and Land use, land-use change and forestryforestry

(continued)(continued)

Accounting period (annual or over commitment period) for each Article 3.3 activity and each elected 3.4 activityExample of Hungary: intends to account for

Article 3.3. And 3.4 annually

Party’s choices on LULUCF will be recorded in Compilation & Accounting database and

become mandatory for commitment period

National registriesNational registries Electronic databases established by Annex B Parties

Track holdings of units in accounts for Parties and entities

Track transactions of units in and between accounts Issuance and conversion of unitsAcquisition of units from other registriesCancellation, replacement, retirement and carry-over

Process transactions in accordance with thespecifications of the data exchange standards

Transactions monitored by the international transaction log

National registries (continued)National registries (continued) Number of reporting requirements, e.g.

Responsibilities, database structure, security measures, procedures to minimize discrepancies

Example of Hungary: rather complete description

Results from test procedures and assessment reports from RSAF Show results of independent testing

Show results of registry initializing and exchanges with the ITL, according to data exchange standardsProblems with national registry could prevent

Party from participating in Kyoto mechanisms

Assigned amount calculationAssigned amount calculation Assigned amount calculation takes into account:

Base year emissions according to Annex A to the Kyoto Protocol (1990 or other year approved by the COP, F-gases (1990 or 1995), and

Emissions from deforestation, if applicable, and

Annex B target or Article 4 arrangements, if applicable,

Example of Hungary: AA = {BY emissions (average of 1985-87) excl. LULUCF

and Fgases base year + Fgases1995} * Annex B target*5yearsBY emissions={(123 178 046-33 169-349 502)+238

715}== 123 034 090 Mg CO2eq

No emissions from deforestationAA = 123 034 090*0.94*5 = 578 260 222 Mg CO2eq

Assigned amount calculation: Assigned amount calculation: LULUCF inclusionLULUCF inclusion

Assigned amount calculation: LULUCF inclusion guided by decision 13/CMP.1 Determine whether LULUCF sector as a

whole is a net source of emissions for 1990 (summary table 2 of the CRF, under category 5 (LULUCF), then

Determine whether Party has net emissions from deforestation (info item in Table 5 of the CRF, under “Forest Land converted to Other Land-Use Categories”

Commitment period reserve Commitment period reserve calculationcalculation Commitment period reserve (CPR) equals to

90% of the Party assigned amount, or

100% of five times its most recently reviewed inventory, whichever is lower

The second condition will mostly apply to EIT Parties

Example of Hungary 90% of the AA= 0.9*578 260 222 =

= 520 434 200 Mg CO2eq

On most recent inventory (2004) = 83952 541 * 5 == 419 762 705 Mg CO2eq.

CPR = 419 762 705 Mg CO2eq

Review of the Initial ReportReview of the Initial Report

Initial Review under Article 8Initial Review under Article 8

Decision 22/CMP.7:

“For each Party included in Annex I the review prior to the first commitment period shall be initiated upon receipt of [the initial] report. The review … shall be completed within 12 months of the initiation of the review and a report shall be forwarded expeditiously to the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol and the Compliance Committee.

Initial Review and Annual 2006 Initial Review and Annual 2006 ReviewReview

Decision 26/CMP.1:

“The secretariat to organize, in accordance with corresponding guidelines, the initial review under Article 8 of the Kyoto Protocol, in conjunction with the review of greenhouse gas inventories submitted in 2006, while exercising certain degree of flexibility in applying the agreed timelines, provided that each initial review is completed no later than one year of the date of submission of the initial report…”.

Initial Review TasksInitial Review Tasks Assess functionality of national system (Article 7 and

Article 5.1 requirements) Review inventory, including LULUCF, focus on base

year If appropriate, recommend adjustments to base year

Assess registry conformity with Article 7.4 requirements

Review calculation of assigned amount, based on Reviewed inventory Articles 3.7 and 3.8 of Protocol, Annex B of Protocol, and Article 4 and base year different from 1990, if appropriate

Review calculation of commitment period reserve All reviews conducted in-country and to be completed within one year!

Review – Compliance LinkageReview – Compliance Linkage Review of initial report leads to

Fixing of assigned amount for the 1st commitment period Establishment of eligibility to participate in the

mechanisms Recording accounting rules and parameters for LULUCF

All review reports forwarded to Compliance Committee Compliance Committee to consider questions of

implementation raised in review reports, if applicable, and take relevant decisions (Enforcement branch)

Final emissions (reported + adjustments) and assigned amount recorded in Compilation & Accounting Database Some parameters from the Compilation & Accounting

Database will be released to ITL, e.g eligibility status These data to be used for compliance assessment at end

of commitment period

Review – Eligibility LinkageReview – Eligibility Linkage Review of initial report leads to establish eligibility

to participate in the mechanisms Automatic eligibility after 16 months of the initial

report (unless the Enforcement branch determines that some requirements are not met) Need to complete review and compliance cycle on

time Otherwise eligibility status will be established even if the

review-compliance cycle is not completed Party must continue to meet requirements to

maintain eligibility: Annual inventory and assigned amount reporting Inventory passed quality tests in the annual review

Enforcement branch can suspend eligibility

Implications for the Review Implications for the Review Process Compared to Annual Process Compared to Annual

Inventory ReviewInventory Review Initial Reviews need to cover more elements than inventory reviews (national systems, registries, assigned amount accounting) Additional knowledge and expertise needed for ERTs Role of the Kyoto Protocol training courses

Review reports must clearly indicate potential problems, how these problems were addressed during the review and any questions of implementation, if applicable

Reviews can be initiated at any time, not all on same cycle as annual review Huge task with very high resource requirements Secretariat is prepared to organize teams throughout

the year and managed to automate many review tools/products

Possible to compress some steps in inventory review

Scope of the Review: National Scope of the Review: National SystemSystem

Review of National SystemMany elements already covered as part of

review in-country review, i.e. institutional arrangements, cross-cutting good practice guidance

Requirements are essentially functional – flexibility for national circumstances

A good inventory is also an indication of a good national system

National system must cover Article 3.3 and 3.4 activities, even though Parties will not yet be reporting related supplementary information

Scope of the Review: InventoryScope of the Review: Inventory Complete inventory review

Focus on the base year for the initial review Only one opportunity for Party to get the base year

inventory right – future recalculations will not result in changes to Party’s assigned amount

Any adjustments applied will be used in the AA calculation

Review of LULUCF for possible application of the final clause in Article 3.7 (Parties for whom LULUCF constituted net source in 1990 shall include deforestation emissions only in the assigned amount calculation, decision 13/CMP.1)

Consistent base year (1990 or 1995) for all F-gases Focus on the last year for the 2006 annual reviewBase year inventory will be the most

important and difficult part of the review

Scope of the Review: National Scope of the Review: National RegistryRegistry Review of National Registries (22/CMP.1, 13/CMP.1 and

16/COP.10)

A detailed initial test and review to take place under the Registry System Administrators Forum

Covers technical standards for data exchange Ensures that the registry conforms with these standards Outcome: Independent Assessment Report (IAR), which

may not be available to ERTs before and during in-country visit

Forward the IAR to ERTs during the review process ERTs will

Check the institutional arrangements, staff allocation, roles and responsibilities

Review the IAR and prepare the final assessment of registry

Initial review report of ERTs to make the final conclusion on the conformity of registries with technical standards and guidelines and to provide information to COP/MOP and CC

Scope of the Review: Assigned Scope of the Review: Assigned AmountAmount

Review of the assigned amount accountingCalculation of assigned amount under Articles

3.7 and 3.8 is simple arithmetic: 5 x base year emissions x Annex B or Article 4 target

Expect that most difficulties will be with respect to the underlying inventory (and adjustments)

Base year for F-gasesArticle 4 arrangementsBase year for EIT PartiesLULUCF inclusion in base year calculations (only

for Parties for whom LULUCF constituted net source in 1990 and include only emissions from deforestation 13/CMP.1))

Scope of the Review: Scope of the Review: Commitment Period Reserve Commitment Period Reserve

(CPR)(CPR) Review of the CPR calculation in accordance to decision 11/CMP.1 A request for each Annex I Party to maintain in its

National Registry a CPR, which should not drop below: 90% of the Party assigned amount according Article 3.7

and 8, or 100% of five times its most recently reviewed

inventory The second condition will mostly apply to the EIT Parties The outcome of the review (e.g. AA, LULUCF parameters,

CPR) after the Compliance Committee considers any potential problem of implementation will be recorded in the Compilation and Accounting Database

At that time the most recently reviewed inventory for most Parties will be 2006 inventory submission

Approach for Initial ReviewApproach for Initial Review Submission by Parties

Four initial reports already submitted: Japan, Hungary, New Zealand and Slovak Republik

Two more are coming soon: Norway and Switzerland Assumption: 80% of all Kyoto Parties to submit their reports on

time 31 reviews to be conducted mostly in the first half of 2007 to

meet the one year dead-line

Initial and 2006 annual review have already been initiated, e.g. status reports and no separate initial check stage is envisaged

Review materials to be provided to ERT around 7 weeks before the review

ERT to identify any early questions, and send these to Party in advance of review (e.g. around one week before the review) and the secretariat to send S&A Part I&II

Approach for Initial Review Approach for Initial Review (continue)(continue)

In-Country visit to occur within 3-7 months of submission Identification of problems, including possible adjustments

during in-country visit Party comments/revisions provided within 6 weeks ERT calculates and recommends adjustments, prepares

and sends the draft report to Party within 8 weeks Party provides comments on the draft report and

accepts or rejects adjustments within 4 weeks ERT prepares final report within 4 weeks Reports published and forwarded to Compliance

Committee (1 week ?) Altogether: 30 weeks review, including 7 weeks

preparation, 1 week in-country visit and 22 weeks for preparing and publishing the report

Reporting, Review and Reporting, Review and Compliance: Case of Compliance: Case of

Adjustments during the Initial Adjustments during the Initial Review and BeyondReview and Beyond

Initial reports, review and eligibilityInitial reports, review and eligibilityERT, CC and CAD/ITL links in the case ERT, CC and CAD/ITL links in the case

of adjustmentsof adjustments

Base year inventory

Ad

vice

Problem(s) corrected?

Adjustments accepted?

Inventory problem(s)?

Calculate adjustments

No

Calculate new AA

(fixed for CP)

Yes

Mechanisms eligibility

Record parameters in CAD and release to ITL

No

Expedited procedures

Yes

12 months

ReportNo

Yes

Question(s) of implementation?

16 weeks

Is Party eligible?

Yes

No

No

Reporting and review: tReporting and review: timing iming of reports and eligibility of reports and eligibility

establishingestablishing

2006 2008 20092007 2012 2013 20142011 20152010

4th Nat Communication

Reports to establish

Assigned Amount

Voluntary Annual Reporting under 7.1

5th National Communication?

‘True-up period’ Report

Mandatory Annual Reporting under 7.1

Article 8 Review Process

Compliance Committee

3.1 Compliance Assessment

Emissions side Assigned amount side

Projectedemissions

Annex Bassignedamount

Finalemissions

LULUCF activities

Mechanismsacquisitions

<=>

Compliance with Annex B Compliance with Annex B targetstargets