Annex I Accounting – Not Just About Transparency

4 October 2011

Since June, there has been much attention paid to the topic of Annex I accounting. This has been reiterated in the open session on mitigation.

There does seem to be some convergence on the need for transparency of assumptions underlying Annex I targets. This is absolutely critical and in line with the provisions of the Cancun Agreements. There is so much we don’t know about the pledges that have been put forward.  What are the rules for LULUCF underlying the pledges? What methodologies for offsets are being embraced? How is economy-wide being defined? What gases and sectors are included? How will double counting of emissions reductions be avoided?  Without information on these and other issues, it will be difficult, if not entirely impossible, to accurately assess the targets in the International Assessment and Review (IAR) process. This clarification process must be formalized beyond the workshops. A first step would be for the Secretariat to update their technical paper on Annex I targets, which came out in June this year. But furthermore, countries must be more forthcoming about their assumptions and this cannot be achieved without a more formal clarification process.

So what is the big deal around accounting? Can’t Annex I countries just report what they are doing and be done with it? Well, while transparency and clarification are vital they just are not good enough to ensure a robust international climate regime. Common accounting rules will be necessary if emissions reductions are to be assessed in a comparable way – a key objective of the Cancun Agreements. In addition, it will be very difficult to inform the periodic review if we do not have an accurate picture of emissions reductions. And last but not least, a lack of common accounting rules could lead to double counting of emissions reductions, confusion in the carbon market, incompleteness of coverage, and potential gaming. As the UNEP emissions gap report shows, accounting rules can directly affect the amount of emissions reductions achieved in the 2013-2020 period.

We need to make sure that the IAR process is not only about clarification – which is vitally important – but also about the development of accounting rules. The environmental integrityof the regime depends upon it.