Market mechanisms in INDCs – presentation at Carbon Expo by Perspectives
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Transcript of Market mechanisms in INDCs – presentation at Carbon Expo by Perspectives
www.perspectives.cc · [email protected] © 2015 Perspectives GmbH
Market mechanisms in INDCs
27 May 2015
Carbon Expo, Barcelona
Axel Michaelowa, Matthias Honegger Perspectives GmbH
www.perspectives.cc · [email protected]
Topics
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§ General status of INDCs § Possible roles of market mechanisms in INDCs § Buyer countries § Seller countries § Current status of mechanisms in published INDCs § Challenges and opportunities in the run-up to Paris § Challenges and opportunities for the post-Paris process
www.perspectives.cc · [email protected]
General status of INDCs
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§ Lima COP defined bare minimum elements to be published in INDCs - Quantified reference point (base year) - Time frames and/or periods for implementation - Scope and coverage - Planning processes, assumptions, methodologies No guidance regarding international
transfer of “mitigation outcomes” § Only 10 countries published INDCs so far
- March deadline passed without any stir - September deadline seems to be slipping
www.perspectives.cc · [email protected]
Possible roles of market mechanisms in INDCs
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§ "Buyer": Mechanisms can be used to acquire emission credits/"units" from other countries - “Top-up“: increase of target through market mechanism
§ "Seller": Mechanisms can be used to sell emission credits/"units" to other countries § Unavailable: explicit exclusion of mechanisms
Emissions budget
www.perspectives.cc · [email protected]
Buyer countries
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§ Interest to reduce their mitigation cost through acquisition of units § Can specify type of mechanism(s) they would like to use - Kyoto Mechanisms, new market mechanisms - Bilateral mechanisms
§ Can define the principles that underpin their use of mechanisms - Real, additional, verifiable, supplemental, interaction with climate finance, …
www.perspectives.cc · [email protected]
Seller countries
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§ Interest to generate “means of implementation” through sale of units - “Conditional goals” that depend on revenues from mechanisms
§ Can specify type of mechanism(s) they would like to use § Can define the principles that underpin their use of mechanisms - Share of credits for own use, quality criteria (?) - Interaction with climate finance
www.perspectives.cc · [email protected]
Current status of market mechanisms in published INDCs
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Country Buyer Seller Type of mechanisms
Switzerland X CDM, international mechanisms delivering real, permanent, additional and verified mitigation outcomes meeting high environmental integrity standards
EU Unavailable, maybe top-up?
Norway (x) Join the EU “bubble” (without access to international units), but support mechanisms and continued CDM and JI
Mexico X Global market mechanism, conditional goal (15% more stringent) to rely on bilateral, regional or international market mech.
United States Unavailable “at this time“, maybe top-up?
Russian Federation Unavailable
Gabon X National sustainable development fund to sell domestic carbon credits
Liechtenstein X Conditional on use of “emissions reductions abroad“
Andorra Unavailable
Canada X International mechanism
www.perspectives.cc · [email protected]
Challenges and opportunities in the run-up to Paris
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§ Market mechanisms are a negotiation chip that governments want to keep for the Paris endgame - Some countries push to apply lessons learned from CDM - Net mitigation contribution remains unresolved controversial issue
§ Many countries are in a rush to define their INDC with limited resources, where market mechanisms distract § Opportunities for consultants, researchers and NGOs
- Make a clear case why market mechanisms can increase ambition and should be integral part of Paris agreement - Provide conceptual clarifications e.g. regarding double counting of credits and (non-?)accounting of revenues from market mechanisms as climate finance
www.perspectives.cc · [email protected]
Opportunities and challenges for the post-Paris process
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§ Agreeing on and providing sufficient resources for a work programme for defining rules of various types of mechanisms to increase trust in the integrity of mechanisms on the buyer side - Pilot activities on various scales - Linkages of market mechanisms and climate finance
§ Bringing in market mechanisms into NDCs of buyer countries that have not unambiguously excluded the mechanisms
§ Bringing in the private sector through manageable rules and long-term, trustworthy incentives - Prevent second “boom and bust“ cycle (“once bitten, twice shy”)
www.perspectives.cc · [email protected] © 2015 Perspectives GmbH
Thank you!
Axel Michaelowa, [email protected] Matthias Honegger, [email protected]