CCXG Oct 2019 Article 6.4 negotiations on baseline approaches - Hugh Sealy

1. Article 6.4 negotiations on
baseline approaches
Hugh Sealy, Ph.D., M.Sc., B.Eng. (Chem.)
Centre for Resource Management and Environmental Studies
(CERMES), The University of the West Indies (UWI)
CCXG, Breakout Group A, Part III
Article 6.4 mechanism design issues (governance; approval and issuance procedures)
IEA Headquarters, Paris, 1 October 2019

2. Paras 26: Governance – Supervisory Body
• Roles include establishing the requirements and processes for the development
and approval of methodologies and developing and approving methodologies
Para 35-38: Governance – Decentralized system (optional for host Party)
• Subject to supervision of the Supervisory Body
• Host Party to specify mitigation activity types, their contribution to its NDC,
baseline approaches and types of methodologies, crediting period, how they are
compatible with its NDC and long-term low GHG development strategy,
contribution to sustainable development
• Host Party may exercise various functions that are performed by the Supervisory
Body under the centralized system, including development and approval of
methodologies
6.4 negotiating text on methodologies and baseline approaches (end SBSTA 50)

3. 6.4 negotiating text on methodologies and baseline approaches (end SBSTA 50)
Paras 41-42: Methodologies
Process: “…may be developed by activity participants, host Parties, stakeholders or
the Supervisory Body [for approval by the Supervisory Body].”
Requirements: “…shall be transparent, and conservative regarding the choice of
approach, assumptions, parameters, data sources, key factors, and take into
account uncertainty
…[and any net leakage due to the implementation of the Article 6, paragraph 4,
activity]
…[and shall [take into account relevant policy][be consistent with the NDC of
the host Party] and provide for updates of baselines to reflect changes to
policy]
…[and encourage an increase in ambition over time].”

4. Paras 43-45: Baseline approaches
Option A: Cascading choice, starting with “[best available][performance-based]”
approach, and if it is not appropriate, “Business-as-usual” or “Historic” emissions
approach
Option B: Option A with a few insertions
Option C: Benchmark baseline approach or alternative benchmark
Para 46: Standardized baselines
Process: “…may be developed by the Supervisory Body at the request of the host
Party, or may be developed by the host Party and approved by the Supervisory
Body”
Requirements: “…shall be established at the highest possible level of aggregation in
the relevant sector of the host Party”
6.4 negotiating text on methodologies and baseline approaches (end SBSTA 50)

5. • Process
 What needs to be agreed this year, what can be postponed to 2020?
 What needs to be agreed by Parties, what can be delegated to the Supervisory
Body?
• Substance: non-exhaustive thinking
 How to consider policies and measures that form a basis of NDC, including its
conditionality, in establishing baselines?
 How to ensure technical robustness and comparability among methodologies, in
particular those developed under the decentralized system? Should the processes
be different for different proposal/approval tracks?
 How to minimize subjectivity and maximise certainty in applying “best available”,
“performance-based” or “business-as-usual” approach?
 How frequently to update methodologies and baselines? What should be the trigger
for updating the methodologies (needs-based, issue-based or regular interval)?
Role of Supervisory Body in ensuring the environmental integrity of
methodologies and baseline approaches - consideration points

6. Questions posed in the CCXG paper related to Supervisory Body
• Should the robustness in the establishment of baselines be different if the
accounting rules for emission reductions from 6.4 is different from 6.2?
• Should the scope of methodologies be aimed at aggregated/sector-wide rather
than project-specific, to ensure wider applicability and resource efficiency?
• Should eligible mitigation activity types be defined separately and
independently from the scope of methodologies?