Fri 7 Dec 2018 – Carbon market representatives, IATA and Environmental Defense Fund (EDF) have urged countries currently meeting at the UNFCCC’s COP24 in Poland to adopt strong rules to avoid double counting on emissions reductions under the Paris Agreement and ICAO’s CORSIA carbon offsetting scheme. This week, the International Emissions Trading Association (IETA), the US-based EDF and a group of 40 companies, business groups and NGOs issued a ‘Katowice Declaration on Sound Carbon Accounting’. Double counting could occur when a country claims a reduction of emissions against its climate pledge under Paris when that same reduction has been sold under a carbon offset programme to, say, an airline in respect of its CORSIA obligations. Robust rules will give airlines confidence that the emissions units they buy bring about genuine reductions, says IATA.
“All markets benefit from strong accounting to build investor confidence, but in the world of the Paris Agreement, the delivery of the environmental objective absolutely depends on it,” said Dirk Forrister, CEO of IETA. “The Paris rules on carbon accounting should support international market linkages that lower costs, spur technology deployment and preserve competitiveness. These are all imperatives for business to scale up climate action.”
The declaration says it is critical clear accounting guidance is given “… to promote certainty that emissions reductions will not be used more than once for compliance purposes, to reduce financial and reputational risk associated with double counting of such reductions and to increase confidence in the integrity of the carbon markets.”
If double counting is allowed among UNFCCC Parties or between them and CORSIA, say the signatories, then that could also undermine confidence among governments, businesses, civil society and other stakeholders that international institutions have the ability to guide the necessary climate action.
Commented Nathaniel Keohane, Senior Vice President for Climate at EDF: “Carbon markets offer enormous promise to enable deep, cost-effective cuts in climate pollution at a global scale – but only if basic accounting rules are in place, like a prohibition on counting the same ton of emissions reductions twice.”
In a separate statement, IATA said it supported the line taken by ICAO to address the risk of double counting under CORSIA. “The approach, whereby the risk of double counting is addressed at the level where it would occur, is the most effective,” it said. “Any potential double-use by an aircraft operator is to be addressed through the verification by an independent third party of the emissions unit cancellation report, in which detailed information on the emissions units used by an operator will be reported. In addition, the emissions unit eligibility criteria require that emissions unit programmes have measures in place to avoid double counting.”
Nevertheless, IATA called on UNFCCC Parties to deliver clear guidance that addresses a situation where a country which hosts emissions unit programmes might also seek to count the reductions associated with units used for CORSIA towards its own mitigation pledges.
“Robust rules on double counting will give aeroplane operators confidence that the emissions units they use are not claimed by another party and that their environmental integrity is preserved,” it said.
Annie Petsonk, International Counsel at EDF, responded: “I welcome the statement as an indication that airlines don’t want the reputational risk of trafficking in credits whose underlying reductions are claimed by anyone else. As CORSIA’s emissions cap takes effect in 25 months’ time, IATA underscores the need for the UNFCCC COP to issue clear, high integrity guidance to avoid double counting.”
At COP24, ICAO held a side event earlier this week to provide an update by head of environment Jane Hupe on CORSIA implementation, in particular concerning monitoring, reporting and verification rules that come into force from January. Presentations were also made by government representatives from France and South Korea.
Hupe also said the ICAO Council had agreed at its November Session that the results of work carried out by ICAO’s environmental committee CAEP on informal testing of some emissions unit programmes against criteria on emissions units (EUC) could be used as a basis by the Technical Advisory Body (TAB) when it is established. The ICAO Assembly A39-3 CORSIA resolution requested the Council to set up the TAB that will make recommendations to the Council on eligible emissions units. The Council also agreed to initiate a process to establish the TAB by inviting the nomination of experts from ICAO Member States.
The composition of TAB experts and terms of reference for the TAB are to be discussed at the next Session of the Council in March 2019. Hupe said CORSIA issues would be reviewed at the ICAO Assembly later next year.
At present there is no indication of when clear guidance will be forthcoming on types of units that will be eligible under CORSIA. The aviation industry and carbon markets recently renewed their calls for a decision to be taken quickly so that both sectors are well-prepared in advance of the full introduction of CORSIA in 2021.
Meanwhile, NGOs WWF and Carbon Market Watch (CMW) have called on countries negotiating the Paris Rulebook at COP24 to agree to end the UNFCCC’s Clean Development Mechanism (CDM) and Joint Implementation (JI) in 2020 when the Kyoto Protocol is replaced by the Paris accord.
CMW says continuing with the “seriously flawed” CDM would undermine the Paris Agreement and the UNFCCC should send a signal to sectors like aviation that relying on CDM credits to pursue climate objectives would fall well short of the necessary ambition levels.
WWF agrees that CDM and JI credits should not be made available for use by countries under Paris or by airlines under CORSIA. However, it adds that CDM or JI mitigation activities – and the projects based on those activities – could be recertified under the Paris Agreement’s Article 6.4 mechanism, known as the Sustainable Development Mechanism. They would have to meet conditions adopted by a new supervisory body that would include an environmental integrity screening process, recommended WWF.
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