Lord of the Credits: The Return of Article 6

18 June 2019

And so here we are again! ECO shall never get tired of engaging with you when you are developing critical rules for implementation of Article 6 to ensure environmental integrity and promote sustainable development. 

Today we present our top line recommendations. And for you, true hardcore followers of Article 6, stay tuned!  Over the coming days, we will outline in detail how and why you should implement these asks within Article 6.

KP transition

COP24 ended in a showdown, and the transition of Kyoto Protocol flexible mechanisms, including the current projects and units issued from these projects was a part of it. From the CDM alone, there could be over 4 billion units available after 2020 if Parties do not put restrictions in place. Today, over 800 million Carbon Emission Reductions (CERs) are already on the market. And don’t get ECO started about AAUs and ERUs€¦ For each of these units used under the Paris Agreement, one less tonne of CO2e will be reduced. Besides, most of these units never made any contribution because the emission reductions they represent would have happened anyway. We know it, you know it, and if they are transitioned into the Paris Agreement, the world will get hotter and we will know why€¦

Avoiding double counting

Second, on the list is the infamous double counting issue. Of course, everybody agrees: double counting? Bad. Great, let’s go home. Wait€¦ It seems some Parties still seem to need help understanding what double counting is. These Parties would have us believe that double counting only happens if a credit/unit is used twice. But what matters are the emission reductions, not the credits themselves. ECO has found that an overwhelming majority of emission reductions appear in a countries” emission inventories. In short, host countries that sell some emission reductions to other actors (Parties, airlines, or potentially other entities outside the UNFCCC, etc.) should correct their reported emissions to make sure that they don’t claim the emission reductions towards their own efforts! It’s called applying corresponding adjustments to a Party’s account based on its emissions inventory. But the technical term should not mask the fact that this is common sense, and it doesn’t take a mathematician to avoid double-counting.

Including Human Rights-Based Social and Environmental Safeguards

But it’s not just all about numbers, credits, and counting, it’s about people and their environment too. Credits aren’t generated in a bubble. ECO wants to remind you that the activities generating these credits have real impacts and they aren’t always positive. But don’t worry, there’s time to course correct, not repeat past mistakes, and ensure that these activities promote sustainable development. How, you might ask? It’s relatively straightforward.  

First, include rights-based environmental and social safeguards in the guidelines for Article 6.  Second, require all activities to conduct meaningful consultations with local communities and indigenous peoples starting with the design of the activity and continuing throughout implementation. In the Paris Agreement, you emphasized supporting and promoting sustainable development, and both robust safeguards and meaningful public participation can help you achieve this. Third, establish an independent grievance mechanism that is accessible, equitable, and transparent so that if harm does occur, communities have somewhere to go to seek remedy. Climate action, including through market and non-market mechanisms, should benefit rather than harm people. It’s not enough to wish it won’t, so write it down and adopt guidelines to help ensure this.    

But that’s not all…

Of course, ECO knows that many other important issues still need to be resolved. How can Parties ensure that conservative baselines are set for baseline and crediting schemes under Article 6? How can Article 6 deliver an overall mitigation in global emissions? How can Article 6 lead to increased ambition, and avoid setting perverse incentives against ambition? Stay tuned, there’s more to come. 

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