This presentation discusses the policy implications of COP18 on the UNFCCC carbon market mechanisms. Delivered in January 2013.

1. UNFCCC secretariat, Sustainable Development Mechanisms programme
Robin Rix, Team Lead, Strategy Development
The policy implications of Doha on the
UNFCCC carbon market mechanisms
Bonn, 30 January 2013

2. 2
Continuation of the existing mechanisms
• Doha ended uncertainty over future of mechanisms
• Operations relevant to CP1 were never in doubt
• Now, operations relevant to CP2 are known as well

3. 3
What Doha means for the CDM
• All major CDM functions will continue:
• Registration and issuance
• Accreditation
• Methodology development
• CER flows will be affected in part:
• All Annex I Parties can continue to receive CERs forwarded to
them directly from the CDM registry (primary market)
• Only Annex I Parties with CP2 commitments can transfer or
acquire CERs with each other

4. 4
CP2 CER flows
CDM registry
AI Party with CP2 commitments AI Party without CP2 commitments

5. 5
Other implications of Doha on Kyoto units
• Supply of other CP2 units will be more restricted:
• Constraints on JI: limited to Annex I Parties with CP2
commitments, ERUs cannot be issued until AAUs/RMUs are
issued
• Constraints on carryover from CP1: special accounts,
restrictions on trading/use, political declarations on use (all
but four Annex I Parties)
• Removal of technical obstacles to trading (CPR,
eligibility, ‘paragraph 23’)
• Share of proceeds for adaptation: no change for CDM,
extension to JI and trading

6. 6
Interpretative FAQs
<http://cdm.unfccc.int>
<http://ji.unfccc.int>

7. 7
Developments under the Convention
• Decision 1/CP.18, paragraphs 41–53
• Recognition of two (competing) principles:
• Parties have the right to develop and implement their own
approaches (including markets)
• … but all such approaches must meet robust standards of
environmental integrity

8. 8
Decision 1/CP.18, paragraphs 41–49
• A framework for various approaches
• Why it is needed
• What mechanisms it will cover
• How it will ensure environmental integrity
• How it will record and track mitigation efforts
• Who will administer it
• To be elaborated in 2013
• Submission deadline of 25 March 2013
• SBSTA agenda in June and November 2013
• COP19 decision in November 2013

9. 9
Decision 1/CP.18, paragraphs 50–53
• The new market-based mechanism
• Key characteristics
• Net decrease in emissions
• Coverage of broad segments
(from projects to sectors)
• Crediting and/or trading
• Ambitious reference levels
• Sustainable development
• Participation by private-sector entities
• Prompt start
• To be elaborated in 2013, parallel process to framework

10. 10
Looking to the future
• Demand remains the critical variable
• Economic uncertainty, suppressed output
• Mitigation targets widely seen as inadequate
• Supply and infrastructure  slow and steady progress
• Need to maintain interest and appetite for markets
• Strengthen mechanisms (existing and new) to be ready
for when the world is ready

11. Thank you!
Robin Rix
rrix@unfccc.int
http://www.unfccc.int
@UN_CarbonMechs /UNCarbonMechs
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