accounting · 2019-05-06 · outline • what do we mean by accounting? • what does it matter (an...
TRANSCRIPT
Nat Keohane
ICTSD WorkshopSeptember 10, 2016
Accounting
Outline
• What do we mean by accounting?
• What does it matter (an ENGO’s perspective)?
• What is the goal of accounting for transfers?
• Key issues
• Four approaches: A pictorial interpretation
• What does the UNFCCC need to do and what rolecan Parties themselves play?
What do we mean by accounting?KP had a comprehensive and unified accounting system thatcombined national-level accounting and accounting for transfers.
What about the Paris Agreement?
• Article 4.13/¶31 “accounting for anthropogenic emissions andremovals corresponding to their nationally determinedcontributions…”
• Article 6.2/¶36 accounting for transfers between Parties “onthe basis of a corresponding adjustment…”
• (Note: Art 9.7/¶57 discusses accounting for finance — separateissue.)
Focus here on accounting for transfers. More precisely, accountingfor use of ITMOs toward NDCs.
NB: Relevance of Art 13.3/¶92? (“Information necessary to trackprogress made in implementing and achieving” NDCs)
Why does it matter?Why markets?
• Markets can enable greater ambition, by promoting cost-effectiveaction, channeling capital, and spurring innovation.
• To realize that vision, critical to ensure integrity.
• Accounting is a key part of the broader framework needed toensure efficient functioning and environmental integrity.
How does that relate to Article 6?
• Article 6.2-3 does not create markets: it concerns transactions.
Critical points:
• Markets are much more than transactions.
• Not everything needs to be (or can be) done in the UNFCCC.
What is the goal?• Instill confidence:
– among Parties, that other Parties are makingprogress toward fulfilling their NDCs;
– among investors, that there is a solid foundation fora return on their investment;
– among civil society and the public, that the systemhas integrity and is contributing to addressingclimate change.
• Ultimately, enable greater ambition through use ofmarket-based approaches
Accounting for use of ITMOs: Key issuesAt a very high level:
• Maximalist vs minimalist approach.
– Should focus be on ensuring avoidance of doublecounting, or broader issues?
– What constitutes “robust” accounting?
• Relationship between accounting and reporting
– Accounting more rules-based, prescriptive
• Commonality vs. flexibility
• Role of UNFCCC/CMA vs Parties (including small troups)
A pictorial representation
The Kyoto Protocol
The Paris Agreement
National accounting (Art 4.13)
?What about trading?
Four basic approaches1. Eligibility: Establish criteria for participating in trading
2. Conformity, e.g.a. Establish some means of deriving quantified budgets on
the basis of disparate NDCs;
-or-
a. Account for all transfers in NDCs regardless of origin
3. Transparency: Include comprehensive reporting ontransferred units (where and when generated,baselines, crediting protocols, etc.)
4. Laissez-faire.
1. Eligibility
Four basic approaches1. Eligibility: Establish criteria for participating in trading For example: Only Parties with absolute, economy-wide NDCs
may engage in trading
Challenge: How does this square with “nationally determined”?Where does the CMA’s authority come from?
2. Conformity Transparency: Include comprehensivereporting on transferred units (where and whengenerated, baselines, crediting protocols, etc.)
3. Laissez-faire.
Four basic approaches1. Eligibility: Establish criteria for participating in trading
2. Conformity: Rules to ensure comparability of unitsludecomprehensive reporting on transferred units (whereand when generated, baselines, crediting protocols,etc.)
3. Laissez-faire.
2. Conformity
Four basic approaches1. Eligibility: Establish criteria for participating in trading
2. Conformity: Rules to ensure comparability of unitsludea. Establish some means of deriving quantified budgets on the
basis of disparate NDCs;
b. Account for all transfers in NDCs regardless of origin (i.e., makeadjustments to NDCs regardless of how units were generated)
Issues:
Ex ante vs. ex post?
Relation to “nationally determined”
Could language around “progress toward NDCs” be used as a hook?
3. Transparency: Include comprehensive reporting ontransferred units (where and when generated,baselines, crediting protocols, etc.)
Four basic approaches1. Eligibility: Establish criteria for participating in trading
2. Conformity : Rules to ensure comparability of unitslude
3. Transparency: Include comprehensive reporting ontransferred units (where and when generated,baselines, crediting protocols, etc.)
4. Laissez-faire.
Four basic approaches1. Eligibility: Establish criteria for participating in trading
2. Conformity : Rules to ensure comparability of unitslude
3. Transparency: Include comprehensive reporting ontransferred units (where and when generated,baselines, crediting protocols, etc.)Minimalist approach: Focus on rules to ensure avoidance of double-
counting within NDCs in particular
Does this meet the standard of “robust accounting”?
4. Laissez-faire.
Four basic approaches1. Eligibility: Establish criteria for participating in trading
2. Conformity: Rules to ensure comparability of unitslude
3. Transparency: Include comprehensive reporting ontransferred units (where and when generated,baselines, crediting protocols, etc.)
4. Laissez-faire. Seems clearly to fail to meet the minimal standard of “ensure
avoidance of double-counting”
What is required toestablish well-functioning marketsand ensureenvironmentalintegrity?
What can theUNFCCC do?
What is required toestablish well-functioning marketsand ensureenvironmentalintegrity? What can the
UNFCCC do?