CCXG Oct 2019 Trigger and recording of adjustments - Lambert Schneider

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Trigger and recording of adjustments
Lambert Schneider
OECD/IEA Climate Change Expert Group
Paris, 1-2 October 2019

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Trigger and recording – same or different?
Options considered for the trigger of adjustments
● First transfer and use
● Transfer and acquisition
But in which calendar year are adjustments recorded in
structured summaries?
● Same calendar year as the trigger: year of (first) transfer, acquisition
or use
● Or a different year?
Trigger and recording of adjustments │Lambert Schneider│Paris│1-2 October 2019

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Recording adjustments in the year of transfer
- Adjusted emissions balance not fully
representative of action over time
- Implicit ‘borrowing’ possible: MO used
in 1st NDC period, but adjustment
applied in 2nd NDC period
- Not well compatible with the single-
year accounting option of using only
the „same vintage“ (e.g. because
credits are issued ex-post)
+ No need to determine when mitigation
outcome took place
+ No need to go „backwards“ in
accounting
Trigger and recording of adjustments │Lambert Schneider│Paris│1-2 October 2019
MO
Mitigation
outcome
takes place
Mitigation
outcome
transferred
Emissions
AdjEmissions
Emissions
2029 20312030
Adjusted emissions
1st NDC period 2nd NDC period

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Recording adjustments in year of mitigation outcome
+ Adjusted emissions balance
representative
+ No implicit ‘borrowing’ possible
+ Compatible with single-year accounting
options of using only the „same
vintage“
- Necessary to determine when
mitigation outcome took place
- Timing issues for final accounting
balance in 2032: how to deal with a
2030 mitigation outcome that is
transferred in 2035?
Trigger and recording of adjustments │Lambert Schneider│Paris│1-2 October 2019
MO
Adj
Mitigation
outcome
takes place
Mitigation
outcome
transferred
Emissions
Emissions
Emissions
2029 20312030
Adjusted emissions
1st NDC period 2nd NDC period

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How to apply adjustments for CORSIA?
Option A in 6.2 text: “Where a Party expressly authorizes the
use of mitigation outcomes, for a purpose other than towards an
NDC, this guidance shall apply to such mitigation outcomes,
whether or not they have been internationally transferred”
But what would constitute a „transfer“ in the context of CORSIA?
• A Chinese airline could implement its own project in China
and issue and cancel CCERs
• What should trigger the application of adjustments and in
which years should they be recorded in structured
summaries?
Trigger and recording of adjustments │Lambert Schneider│Paris│1-2 October 2019

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Multiple options – multiple outcomes: example
Trigger and recording of adjustments │Lambert Schneider│Paris│1-2 October 2019
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total
Trigger for CORSIA offset adjustment
[A] Authorization X
[B] Issuance X X X
[C] Cancellation X X X
Application of adjustments to calendar years
[A0] Adjustments triggered by
authorization and applied ex-ante
over the authorized time period
10 10 10 10 10 10 10 70
[B1] Adjustments triggered by
issuance and applied to when the
emission reductions occurred
5 10 8 10 9 10 10 62
[B2] Adjustments triggered by
issuance and applied to the year of
issuance
15 27 20 62
[C1] Adjustments triggered by
cancellation and applied to when the
emission reductions occurred
3.4 6.8 5.4 6.8 6.1 6.8 6.8 42
[C3a] Adjustments triggered by
cancellation and applied to the year
of cancellation
6 12 24 42
[C3b] Adjustments triggered by
cancellation and applied to the
relevant CORSIA compliance period
2 2 2 4 4 4 8 8 8 42
[C3c] Adjustments triggered by
cancellation and applied to the year
of the surrendering report
6 12 18

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Conclusions
Work program or negotiation text could provide clarity on:
1. To which years adjustments should be recorded in structured
summaries, in particular for transferring countries:
‒ Year of transfer
‒ Year when mitigation outcome took place
2. Trigger for adjustments in the context of CORSIA:
‒ Authorization (ex-ante for a project or ex-post for issued credits?)
‒ Issuance of credits
‒ Cancellation of credits by airlines
Trigger and recording of adjustments │Lambert Schneider│Paris│1-2 October 2019

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Thank you for your attention!
Lambert Schneider
Research Coordinator for
International Climate Policy
Öko-Institut e.V.
Berlin Office
l.schneider@oeko.de