This document discusses accounting principles and guidance for tracking progress towards Nationally Determined Contributions (NDCs) under the Paris Agreement. It outlines key principles such as promoting transparency, accuracy and avoiding double counting. It also examines how accounting guidance could clarify and implement these principles for different types of NDCs. Examples given include guidance to avoid double counting of emissions reductions from harvested wood products and clarifying how countries can account for natural disturbances. The document also discusses drawing from existing approaches under the UNFCCC and Kyoto Protocol, and introducing an "accounting balance" to clearly track progress towards NDCs.

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Accounting for diverse NDCs: Unpacking
concepts and options
OECD CCXG Global Forum on the Environment and
Climate Change
12.9.2017
Paris
Anke Herold

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General accounting principles I
Paris Agreement established general principles for the tracking of progress/
accounting (Art. 4.13):
• promote environmental integrity,
• promote transparency, accuracy, completeness, comparability and
consistency ( linkages to transparency framework)
• ensure the avoidance of double counting
Decision 1/CP.21, paragraph 31 established additional general principles:
• Ensure to account in accordance with common metrics adopted by CMA
• Ensure to account in accordance with IPCC inventory methodologies
adopted by CMA
• Ensure methodological consistency between communication and
implementation of NDCs
• Strive to include all categories of emissions and removals in NDCs and
explain exclusions.
• Once a sink, source or activity is included in a NDC, Parties shall continue to
include in subsequent NDCs.
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General accounting principles II
• Principles outlined in the Paris Agreement apply generally to all NDCs
• Elaboration of accounting guidance under Paris Agreement is about
implementing these general principles in the process of submitting
NDCs and tracking progress with implementing and achieving NDCs.
• Not all Parties have quantified NDCs, but all Parties are required to
account for their NDCs  tracking of progress will also involve
qualitative information such as progress with implementation of
mitigation actions
• Different types of guidance:
• Some principles may need further guidance on how to implement
• Some principles may need further clarification
• Some principles may require procedures
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Examples implementation accounting principles I
• Further guidance:
• Avoid double counting: Guidance under Article 6 to determine how
ITMOs are generated, transferred between Parties and used
towards NDCs and how ‘corresponding adjustments’ to avoid double
counting are implemented
• Accuracy/ comparability: Use of GHG inventories as main tool to
track progress with economy-wide or sectoral GHG targets.
• Further clarification: Ensure methodological consistency between
communication and implementation of NDCs:
• Which methodologies should be consistent?
• How is methodological consistency demonstrated?
• Countries are also expected to improve methodologies over time: how
can both improvement and consistency be implemented at the same
time?
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Examples implementation accounting principles II
• Establishment of procedures:
• Parties „shall provide an explanation of why any categories of
anthropogenic emissions or removals are excluded“:
•  When and through which channels will this information be provided?
• Parties announced in INDC submissions that they intend to update
baselines / reference levels or decide on accounting modalities at
later stage:
•  Where and through which channels will this information be provided?
Parties should know what procedure to follow for these situation
• Use of ITMOs shall be authorized by participating Parties
• Procedure how such authorization is implemented
 Type of guidance determined based on needs arising from general
principles in the Paris agreement
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Applicability
Applicability is key for accounting guidance
• Nationally determined character remains key for NDCs
• Tracking of progress is always related to the NDC submitted, thus
the concept of ‘applicability’ related to the NDC is important for
accounting guidance
• Accounting guidance related to voluntary cooperative approaches
under Article 6 will only apply to Parties that participate in such
voluntarily cooperation activities.
• Accounting guidance related to natural disturbances only applies
to Parties that account for emissions/ removals from forests and
after natural disturbances occurred
• No need to draft accounting guidance for specific types of NDCs, but
related to specific elements of NDCs
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Drawing from existing approaches I
Guidance shall draw from existing approaches established under the
Convention and the Kyoto Protocol. Area with substantial existing
accounting provisions is LULUCF sector, e.g.
• Accounting approaches for harvested wood products
• Accounting for natural disturbances
• Forest reference (emission) levels under KP and for REDD+
• Approaches will continue to be used, therefore accounting guidance
should clarify how Parties can draw from existing approaches
• Example natural disturbances under KP:
• Clarify how this guidance could be applied based on Convention
inventory categories instead of Kyoto Protocol LULUCF activities
• Clarify how developing countries can deal with methodological
challenges of KP approach
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Drawing from existing approaches II
Environmental integrity and avoidance of double counting:
• Accounting approaches for harvested wood products: CO2 is not
accounted after harvesting of trees, but only after lifetime of wood
products
• Three accounting approaches defined as part of 2006 IPCC Guidelines
for GHG inventories, one approach under KP: Main difference
consumption based approach – production based approach
• Mix of approaches can result in double counting of the same emissions or
in eliminating emissions entirely from accounting under PA
• Guidance to ensure that neither double counting, nor avoidance of
accounting occurs when HWP approaches are used.
• In other areas we draw from concepts, but not the way they were
implemented, e.g. compilation & accounting database under KP as
an final overview of the tracking of progress  accounting balance
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Accounting balance
Accounting balance for NDCs quantified in GHGs
Results target year/ period
A Total GHG emissions with/ without LULUCF in target year/
period
50 Mt CO2eq
B +/- net emissions/ removals from LULUCF balance in target
year/ period, if applicable (could result from separate balance)
- 20 Mt CO2eq.
C Article 6.2/ 6.4 adjustments (+ transfers, - acquisitions), if
applicable, example transfer to other country
+ 30 Mt CO2eq
D Total accountable net emissions in target year/ period 60 Mt CO2eq
Target level
E.1 Base year emissions – 30% 70 Mt CO2eq
E.2 BAU emission level – 30% 70 Mt CO2eq
E.3 Intensity target: GDP in target year/ period
Target intensity
Achieved intensity: total accountable net emissions/ GDP value
in target year/ period
EUR X bln
70 Mt CO2eq/€ X bln
60 Mt CO2eq/€ X bln
F Accounting result -10 Mt CO2eq below
target
-10 Mt CO2eq/€ X bln
below target intensity
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Accounting balance – purpose
• Purpose:
• Clarity and transparency of tracking of implementing and achieving
progress of individual countries and accounting calculation
• Assist Parties in reporting on implementing and achieving progress
• Facilitates aggregation of progress across Parties for GST
• Facilitates technical expert review
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Thank you for your attention!
Do you have any questions?
?Anke Herold, Öko-Institut
a.herold@oeko.de