BASELINE SETTING FOR SCALED-UP CARBON AND RBCF PROGRAMS IN THE CONTEXT OF NDC IMPLEMENTATION

Transcription

1 BASELINE SETTING FOR SCALED-UP CARBON AND RBCF PROGRAMS IN THE CONTEXT OF NDC IMPLEMENTATION NOÉMIE KLEIN WITH DERIK BROEKHOFF, RANDALL SPALDING-FECHER, JÜRG FÜSSLER, LAMBERT SCHNEIDER 23 MAY / ECOFYS, A NAVIGANT COMPANY. ALL RIGHTS RESERVED

2 CONTENT Baselines: what is new? Baselines for scaled-up crediting outside of NDC scope Baselines for scaled-up crediting within NDC scope Choice of the approach In practice 222 / 2016 ECOFYS, NAVIGANT A NAVIGANT CONSULTING, COMPANY. INC. ALL RIGHTS RESERVED

3 RECAP - WHAT IS NEW What is different in how we set crediting baselines compared to a few years ago? - Coverage of pledges: - A larger number of countries have put forward a pledge (NDC) a larger share of the global emissions are covered by a pledge - This coverage is expected to increase over time - Types of pledges: diversity of goals, conditionality - New international carbon market mechanisms in the making Question: how to reflect NDCs in the baselines for crediting programs? International rules being defined, but two important principles identified in the Paris Agreement: - Environmental integrity - Avoiding double-counting 333 / 2016 ECOFYS, NAVIGANT A NAVIGANT CONSULTING, COMPANY. INC. ALL RIGHTS RESERVED

4 ENVIRONMENTAL INTEGRITY Article 6.2: Parties engaging in international transfers of mitigation outcomes shall ensure environmental integrity and transparency Article 6.4: provisions that aim to safeguard environmental integrity, deliver an overall mitigation in global emissions Use of international transfers under Article 6 should not result in higher global emissions than if the NDCs had been achieved only through domestic action Scaled-up crediting baselines need to be set no higher than the emissions level that would occur in the absence of the scaled-up programme (i.e. BAU) or lower 444 / 2016 ECOFYS, NAVIGANT A NAVIGANT CONSULTING, COMPANY. INC. ALL RIGHTS RESERVED

5 AVOIDANCE OF DOUBLE COUNTING Articles 4.13, 6.2, 6.5 Paris decision text paras 36, 93, 107, 108 Article 6.2: Parties engaging in international transfers of mitigation outcomes shall apply robust accounting to ensure, inter alia, the avoidance of double counting Transferred GHG reductions cannot be claimed by more than one party for the purpose of meeting GHG mitigation targets/ndc - corresponding adjustments (session 5) Need for framework to evaluate the effect of transfers on the achievement of the respective NDC targets - NDC targets in terms of explicit GHG emission outcomes? - Crediting baselines in the same metrics? 555 / 2016 ECOFYS, NAVIGANT A NAVIGANT CONSULTING, COMPANY. INC. ALL RIGHTS RESERVED

6 AVOIDANCE OF DOUBLE COUNTING Ensure that transfers do not jeopardise achievements of NDC targets, i.e. avoid over transferring emission reductions How to set baselines that avoid risk of over transferring? Note: only relevant if emissions targeted by scaled-up crediting programme are within NDC scope Assumptions: - NDCs are ambitious, i.e. below a recognised and accepted BAU - Gradual move towards economy-wide NDCs 666 / 2016 ECOFYS, NAVIGANT A NAVIGANT CONSULTING, COMPANY. INC. ALL RIGHTS RESERVED

7 OUTSIDE NDC SCOPE Baselines for scaled-up crediting outside NDC scope - BAU baseline 777 / 2016 ECOFYS, NAVIGANT A NAVIGANT CONSULTING, COMPANY. INC. ALL RIGHTS RESERVED

8 OUTSIDE NDC SCOPE Baselines for scaled-up crediting outside NDC scope - Below-BAU baseline Both approaches: NDC expansion Interactions activities within/outside NDC 888 / 2016 ECOFYS, NAVIGANT A NAVIGANT CONSULTING, COMPANY. INC. ALL RIGHTS RESERVED

9 WITHIN NDC SCOPE Baselines for scaled-up crediting within NDC scope - BAU baseline + restriction of GHG transfers 999 / 2016 ECOFYS, NAVIGANT A NAVIGANT CONSULTING, COMPANY. INC. ALL RIGHTS RESERVED

10 WITHIN NDC SCOPE Baselines for scaled-up crediting within NDC scope - Below-BAU baseline + management of transfers as needed Baseline above NDC Baseline below NDC 1010 / 2016 ECOFYS, NAVIGANT A NAVIGANT CONSULTING, COMPANY. INC. ALL RIGHTS RESERVED

11 WITHIN NDC SCOPE Baselines for scaled-up crediting within NDC scope - Baseline derived from NDC 111 / 2016 ECOFYS, NAVIGANT A NAVIGANT CONSULTING, COMPANY. INC. ALL RIGHTS RESERVED

12 CHOICE OF THE APPROACH Choice of the baseline approach will depend on, e.g.: - Progress around NDC definition/metrics and implementation, development of GHG pathways - Use of crediting as a tool to achieve the NDC - Credit buyer preference and risk tolerance - Domestic capacities - Existing policy processes - Uncertainty on market structure - Progress of Article 6 discussions 1212 / 2016 ECOFYS, NAVIGANT A NAVIGANT CONSULTING, COMPANY. INC. ALL RIGHTS RESERVED

13 NEEDS - Nationally: close alignment and coordination between crediting and NDC processes (use of crediting and how it fits in overall national climate strategy, management of risk of (under)achievement of NDC, tools and methods to define pathways, stakeholders, etc.) - Bilaterally/internationally: assessment of NDCs, translation into pathways - Internationally (i.e. by CMA): clarity on conditional vs unconditional, overall mitigation, guidance for baselines (scope of guidance, Article 6.2 vs 6.4), 1313 / 2016 ECOFYS, NAVIGANT A NAVIGANT CONSULTING, COMPANY. INC. ALL RIGHTS RESERVED

14 IN PRACTICE No scaled-up crediting programme in place Actions underway that help countries understand: - How the NDC will affect GHG emissions from sources covered by the crediting programme - How to translate NDC commitments which come in variety of forms into specific actions and emissions pathways for different sectors, including sectors that might be covered by a scaled-up crediting programme Chile: economy-wide model to assess the impacts of various policies, in the process of including carbon pricing. Linked to NDC. Morocco: model to assess the impacts of various policies on the building sector and GHG emissions. Linked to NDC / 2016 ECOFYS, NAVIGANT A NAVIGANT CONSULTING, COMPANY. INC. ALL RIGHTS RESERVED

15 NOÉMIE KLEIN Associate Director ECOFYS GROUP Kanaalweg 15-G 3526 KL Utrecht The Netherlands ECOFYS GERMANY (COLOGNE) Am Wassermann Cologne Germany ECOFYS GERMANY (BERLIN) Albrechtstraße 10 c Berlin Germany ECOFYS UK Woolgate Exchange 25 Basinghall Street London EC2V 5HA United Kingdom ECOFYS BELGIUM Avenue Marnix Brussels Belgium Find the full set of offices here. ECOFYS.COM 15 / ECOFYS, A NAVIGANT COMPANY. ALL RIGHTS RESERVED