Are countries ready for Article 6? - COP 23
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Ritika Tewari from NewClimate Institute presented findings from the Germany’s international cooperation on carbon markets report that is looking at Ukraine, Vietnam and Ethiopia readiness to implement Paris Agreement's Article 6.
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Are countries ready for Article 6? - COP 23
- 1. Side event at COP 23, EU Pavilion Are countries ready for Article 6? Insights from three countries Ritika Tewari Bonn, 7th November 2017
- 2. Background Starting point: where do countries stand on their readiness to engage in the options Article 6 presents for transferring mitigation obligations? Two part question: • How ready are countries to generate quality mitigation outcomes? • Readiness to be able to transfer outcomes in a manner so as to avoid double counting? We look at three fundamental elements for readiness • Enabling conditions • Feasibility of maintaining robust MRV and accounting • Compatibility of the NDC We looked at Ukraine, Viet Nam and Ethiopia 207/11/2017
- 3. Distilling evidence on the three elements of readiness in Ukraine, Viet Nam and Ethiopia Take aways Entry-points for international cooperation Contents 307/11/2017
- 4. Enabling conditions While all three express willingness to participate in markets in their NDCs.... ...the starting points vary …and motivations to participate differ 407/11/2017 UkraineViet NamEthiopia • 4th globally for registered CDM projects • JCM activities and NAMAs underway • Pilot ETS after 2020 not ruled out • JI and AAU trading under GIS • ETS discussions in advanced stages • Fewer CDM projects got registered, in strategic sectors • JCM member and NAMAs underway
- 5. Feasibility of maintaining robust MRV and accounting 507/11/2017 Registry experience Accounting Intervention level (actions, policies) National emissions inventory MRV Systems Intervention level (actions, policies) National • Developing in a few (priority) sectors– KP activities and NAMAs (Ethiopia, Viet Nam) • Resource constraints (financial, technical and institutional) limit independent development of inventory • No concrete registry experience in Viet Nam and Ethiopia • Ukraine stands out due to KP infrastructure • Developing in a few (priority) sectors, with international support • Limited discussion on how sectoral MRV frameworks feed into national frameworks • Need for broadening and deepening institutions and capacities to implement market based interventions • limited to few champions / bodies • sub-national and private sector capacities limited (esp. for installation level MRV) Implementation capacities
- 6. Similarity and differences in NDCs put forth by the three countries: • All three countries have economy-wide, absolute reduction targets • All have single year targets leading upto 2030, do not provide details of the emission trajectories • Type of details vary. Ethiopia defines interventions forming the target while Ukraine provides planned policies • Conditional (Ethiopia) │with conditional elements (Viet Nam)│Unconditional (Ukraine) Scope of NDC will determine and delimit emission budget available to transfer as ITMOs Diversity in NDCs makes comparability difficult, and can lead to accounting challenges Compatibility of NDC 607/11/2017
- 7. Take aways 1. Countries interested in Article 6 need to deliberate on its role in their NDC achievement 2. Readiness for markets linked to readiness for NDC implementation 3. Unpacking high-level targets will be important to facilitate environmental integrity objectives of Article 6 • Single year targets increase risk of ‚hot air‘ define trajectories leading to target year • Conditional elements have a risk of ‘double counting’ of mitigation outcomes (and support) and lowering global mitigation ambition reporting and accounting requirements 4. Operationalising Article 6’s environmental integrity principles would benefit from discussion across agenda items [Art. 13.7(b), 13.10 and 9] 707/11/2017
- 8. Role of international support in Article 6 readiness Immediate support for NDC implementation readiness would serve to benefit market readiness in countries, esp. • for private and sub-national actors • towards institutional readiness and building capacities Support/develop a) platforms of learning and experience sharing, incl. experiences of developed countries b) piloting instruments Enhancing understanding on what future markets will look like Necessary to differentiate between 1) country-specific support needed to facilitate 'next steps' and 2) overarching support needs that address more 'common' gaps 807/11/2017
Editor's Notes
- FOCUS DISCUSSION ON COUNTRIES, DIFFICULT QUESTION TO ADDRESS – AIM IS NOT TO PROVIDE ANSWERS – BUT PUTTING IT OUT THERE and PRESENT some NUANCES to the question of country readiness.
- READINESS HAS TWO PARTS: 1. Are Countries ready to develop approaches/participate in mechanisms which generate quality/genuine ITMOs, 2. Readiness to transfer mitigation outcomes in a manner that double counting is avoided With due recognition that many of the answers on readiness will get clarity in the rules and guidelines agreed multilaterally, WE LOOKED AT THREE ELEMENTS WE CONSIDER FUNDAMENTAL IN COUNTRIES TO ENGAGE IN THE OPTIONS ARTICLE 6 opens up to transfer ITMOs to ensure env. Integrity and avoid double counting. 1. ENABLING CONDITIONS – elements that play a FACILITATIVE ROLE in uptake of instruments that would GENERATE MITIGATION OUTCOMES which can be transferred internationally 2. Feasibility of maintaining robust MRV and accounting - STRENGTH OF DOMESTIC SYSTEMS to ensure GENERATION OF QUALITY ITMOs, TRACK TRANSFERS and UNDERTAKE CORRESPONDING ADJUSTMENT 3. Compatibility of NDC: HOW NDC OBLIGATIONS ARE SET will have a bearing on the TRANSPARENCY OF what is considered an ITMO AND ITS QUALITY.
- Distillation of country specific findings, details in the publications
- Interest in markets is common to all three ...But the starting points to engage in market based instruments vary Ukraine farthest with KP experience and ongoing discussions on ETS Viet Nam has ample CDM experience, although mostly in hydro projects, active in JCM and a range of NAMAs have been designed with international support, Pilot ETS cannot be ruled out Ethiopia on the other end, has limited experience with CDM (but in strategic sectors)
- We looked at where domestic capacities stand on: Accounting (intervention level and national), MRV systems, Implementation capacities, and registry experience 1. Ukraine stands out considering the INFRASTRUCTURE IT HAS CREATED BEING A KP ANNEX B PARTY (economy wide MRV systems, accounting and registry), although implementation capacities at installation level need to be improved 2. Lacking in the other two, ACCOUNTING AND MRV FOR INTERVENTIONS is DEVELOPING IN FEW PRIORITY SECTORS covered in the NDC 3. LIMITED DISCUSSION ON HOW these SECTORAL MRV STRUCTURES FIT in NATIONAL FRAMEWORK needed for the NDC. (needed to adjust transfers from own mitigation)
- Diversity in NDCs makes comparability difficult, and can lead to accounting challenges
- As we enter into a regime where the strict definition of buyers and sellers goes away and all countries put adequate effort towards global mitigation, the approach on markets also needs to be modified. Countries interested in Article 6 need to deliberate on its role in their NDC achievement Readiness for markets linked to readiness for NDC implementation This will involve unpacking... Single year targets Is ambition under conditional obligations offsetable Operationalising Article 6’s environmental integrity principles would benefit from discussion across agenda items First, article 13.7 (b) (information necessary to track progress towards NDC implementation would include info on ITMO transfers) Second, demarcate what is support for conditional NDCs under Art 6 and climate finance commitments under Article 9 (esp. RBF type approaches) This info feeds into Article 13.10 (reporting on support needed and provided)