Robust Accounting Of International Transfers Under Article 6 Of The Paris Agreement
After years of exclusion from international aviation trading systems, Corsia and private companies are expected to be the largest market. It compares this amount to a significantly lower potential demand of 0.3 billion units by 2020 – and less than 3 billion units of demand under the Corsia program for international air transport by 2035. Currently, only eight of the countries with ACCs – Canada, Japan, Liechtenstein, Monaco, New Zealand, Norway, South Korea and Switzerland – explicitly state that they plan to use international funds to achieve their goals. These compromise options could be part of the haggling in the discussions – for example, in exchange for stricter rules for the international carbon market, as De Leon of Costa Rica`s Carbon Letter says: there is a degree of optimism in the air, stifled by the realization that most of the outstanding issues from the beginning remain unresolved. The Paris text calls for practical instructions on how to proceed. It adds that the parties must remain “consistent” with these guidelines when accounting for Section 6.2 transactions. At best, proponents argue that Article 6 could provide countries and businesses with the opportunity to work together to reduce CO2 emissions faster than expected. However, there is also concern that Article 6, far from improving the Paris objectives, could jeopardize the whole process. (This claim is implicitly recognized in the international CDM credit market, where CO2 offsets are currently valued at close to USD 0.2/tCO2e.) However, towards the end of COP24, in December, the draft text proposed a menu including the following accounting approaches, including the “multi-year trajectory,” the “annual cycle,” the “cumulative” and the “average,” giving countries a choice between the method to be applied. “Brazil and others still support Article 6.4 sales without an accounting adjustment for the host country… From our point of view, you still need to have the right to have the adjustment to put in place a system that has broad public support, with full integrity accounting and capable of supporting large-scale investments. At the international climate summit in Madrid in December 2019, climate negotiators will once again attempt to finalize the Article 6 “regulatory framework” that will govern voluntary international cooperation on climate change issues, including carbon markets.
In order to truly understand the task entrusted to them and the main areas of disagreement that remain, the first point of contact is the text of Article 6 of the Paris Agreement itself, presented in annotated form in the graph below. Kelley Kizzier, now Associate Vice President for International Climate at the American NGO Environmental Defense Fund (EDF), was co-chair of the Article 6 negotiations at COP24.
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