EDF Talks Global Climate

Why the developing world needs to be included in climate engineering research

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Devastating cyclones in Fiji. Deadly heat waves in Europe. Drought in Somalia.

Communities around the globe are already feeling the impact of the billions of tons of climate pollution that humans dump into Earth’s atmosphere every year and the serious changes to the climate it causes, but people living in the global south in particular are on the front line of climate change.

The one surefire way to address the climate change problem is to cut pollution. But given the urgency of the challenge and notably insufficient pledges by nations to reduce their future climate-warming emissions, the concept of solar geoengineering is being discussed as a way to cool the planet, fast.

Fostering inclusive and informed decision-making

Also known as “solar radiation management” or SRM, solar geoengineering is a controversial idea for reducing the temperature-related impacts of climate change. The leading proposal would involve spraying tiny reflective particles into the upper atmosphere to reflect away a little of the sun’s inbound energy, mimicking the cooling effect of volcanoes.

The consequences of solar geoengineering are still uncertain, and developing countries could be most affected by its use. SRM could lower global temperatures and reduce some of the harmful effects that poor countries face due to climate change, such as higher temperatures, changes to rainfall patterns and stronger tropical cyclones. But it could have unexpected and damaging side effects, could cause international tensions, and could distract policymakers from cutting carbon emissions.

Most discussions to date on SRM research governance, as well as most research activities, have taken place in developed countries. That needs to change. Writing in Nature today, a group of 12 scholars from across the developing world made a bold call for developing countries to lead on the research and evaluation of SRM geoengineering.

The Comment in Nature is linked to the launch of a new SRM modelling fund for scientists in the global south. Administered by The World Academy of Sciences (TWAS) and the SRM Governance Initiative, with funding support from the Open Philanthropy Project, the modelling fund will provide grants to scientists who want to understand how SRM might affect their regions.

Supporting developing country efforts to lead on SRM research and evaluation is an important and positive step towards ensuring that an inclusive and informed set of voices contributes to decision-making on geoengineering research and governance. EDF played an early role in the NGO community in promoting governance of climate engineering research. In 2010, EDF co-founded the SRM Governance Initiative with the Royal Society and The World Academy of Sciences, in order to engage a diverse and global range of voices to discuss SRM research and appropriate governance. Increasing numbers of environmental NGOs have joined us in this effort, and some of them have endorsed small-scale research.

SRM is not a ‘technological fix’ for climate change…but it needs to be understood 

Without exception, all scientific reports have confirmed that SRM is no substitute for reducing greenhouse gas emissions, since it would at best mask some of the impacts of climate change. The environmental, economic, social, ethical, political and legal risks of using these technologies are also poorly understood. That means we still need to do everything we can to address the emissions problem head on. We need to cut climate pollution now.

But it also makes sense to explore and understand the implications of solar geoengineering. As the world warms, some may propose the use of geoengineering technologies, or even deploy one of them. We need to understand the potential consequences before that happens.

It will be critically important to have strong rules in place to govern any outdoors research that proceeds, to deal with the technology’s profound social, ethical and geopolitical consequences. Governance regimes should be established in parallel with the very first experiments.

By expanding geoengineering research and governance to better integrate developing country perspectives and expertise, we stand a much better chance of making informed, legitimate decisions on the potential role of these technologies, if any, in global efforts to tackle climate change.

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“Fiji-on-the-Rhine”: Four things to expect from the COP 23 UN climate talks

By Alex Hanafi, Senior Manager, Multilateral Climate Strategy and Senior Attorney, and Soren Dudley, Program Assistant, Global Climate

A confluence of factors sets the stage for what to expect from this year’s climate meetings, the first since the U.S. announced its plans to withdraw from the Paris Agreement. Above: The Bula Zone at the UNFCCC headquarters in Bonn. Photo: UNFCCC/ Flickr.

The first UN climate talks since the United States announced its plans to withdraw from the Paris Agreement start this week in Bonn, Germany. Chaired by the island nation of Fiji, the meetings are the second-to-last Conference of the Parties (COP) before the Paris Agreement’s implementation “rulebook” is scheduled to be finalized in Poland next year.

This confluence of factors – Fiji’s presidency of the COP, President Trump’s announcement (and the ensuing groundswell of domestic and global support for the Paris Agreement), and the need to advance progress on the technical details of the Paris Agreement’s infrastructure – sets the stage for what to expect from this year’s climate meetings.

1. Islands’ COP, islands’ issues

As the President of the 23rd meeting of the COP, Fiji will aim to highlight both the needs of vulnerable parties as well as island nations’ climate action leadership. This year’s COP presents an opportunity to spotlight necessary adaptation to a changing climate, as well as the loss and damage experienced by islands due to the impacts of climate change. These concerns are especially important to low-lying island nations because their very existence is threatened by the rising sea levels triggered by climate change.

Many island nations, Fiji among them, have made ambitious renewable energy pledges central to their participation in the Paris Agreement. Leadership by small island developing states will shine an even brighter spotlight on the Trump Administration’s retreat from climate action.

2. Trump’s intention to withdraw the U.S. from the Paris Agreement isolates the U.S…. and triggers a groundswell of support for the Paris Agreement

President Trump’s June 1 announcement that the US intends to pull out of the Paris Agreement left the U.S. isolated. This isolation became even starker with the recent news that Nicaragua will join the Paris Agreement, leaving the U.S. and Syria the only two nations in the world refusing to join.

Although the Trump Administration has been working to roll back existing federal climate policies and will continue to do so, its initial efforts have encountered delays and legal setbacks.  The Administration has yet to successfully suspend, weaken, or repeal a major climate protection

While the U.S. government attempts to backtrack on common-sense efforts to reduce U.S. climate pollution, nations around the world are already taking concrete steps to meet their Paris pledges. Perhaps most notably, China plans to roll out a national carbon market in the coming weeks, demonstrating China’s continuing commitment to climate action. China is now increasingly seen as filling the leadership void left by the U.S. With news of recent trilateral climate meetings between China, the EU, and Canada, COP 23 offers the first chance for a this potentially powerful alliance to prove itself as a force for accelerating the transition to the clean-energy, low-carbon economies of the future.

3. U.S. subnational actors show commitment on the global stage

In direct contrast to Trump’s announced pull-out, U.S. subnational actors are eager to communicate to the global community that they are still committed to moving ahead despite federal backsliding. American businesses and state-level officials plan to use COP 23 to showcase concrete examples of their continued climate leadership. Notably, several U.S. governors, including those from California, Virginia, Washington, and New York, will attend to demonstrate the depth and breadth of U.S. state-level action.

4. Negotiations and progress on the Paris Agreement Rulebook

This COP will be important for keeping the ship sailing in the right direction on implementing the Paris Agreement. Countries decided last year that they will finalize the nuts and bolts of the Paris Agreement’s implementing infrastructure (its “rulebook”) by COP 24 in Poland in December 2018. Parties have a long list of tasks to complete, and negotiations on key tools Parties can use to cooperate in driving down climate pollution, like carbon markets, are moving slowly.

While agreement among all Parties on these carbon market standards is not necessary before “bottom up” cooperation on carbon markets may begin, up-front clarity on key issues (like how Parties can avoid “double counting” of emissions reductions) can reduce uncertainty and help catalyze additional investment in high-integrity emissions reductions around the globe.

This will be an important COP to watch for signs of how much work will remain for next year, and how likely it is that countries will stick to their tight timeline for delivering an effective roadmap to guide Parties in achieving the goals of the Paris Agreement.

This post was updated Nov. 5 with more detail in #2.

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What happens in Marrakesh now that the Paris Agreement has entered into force?

Marrakesh

Photo credit: Luc Viatour

Friday, November 4, 2016 was a day for the record books: it marked the day that the landmark Paris Agreement on climate change entered into force, unlocking the Agreement’s legally binding rights and obligations for countries that have joined the agreement. This milestone came almost four years earlier than many expected even just last year. 

Rapid entry into force proves that the diverse political coalition of countries that constructed the Paris Agreement – both developed and developing, large and small – is alive and strong around climate change. It sends a powerful, immediate signal to global markets that governments take the agreement seriously, and that now is the time to ramp up investment in a prosperous, low-carbon future. 

Early entry into force also adds a sense of urgency to the work of the just-opened climate talks in Marrakesh under the United Nations Framework Convention on Climate Change (UNFCCC), known as COP22, from November 7-18. The inaugural session of the Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement (CMA1) will take place in conjunction with COP22. 

What to expect at Marrakesh

[pullquote]Countries in Marrakesh will be expected to provide concrete evidence that the world is on track to effectively implement the Paris Agreement.[/pullquote]

The goal of the Marrakesh gathering is to maintain the strong momentum on climate action that comes from the trio of climate wins we’ve seen recently: entry into force of the Paris Agreement, the adoption of a market-based-measure to tackle significant climate pollution from airlines, and the phase down of HFC “superpollutant” greenhouse gases. 

To continue that momentum, countries in Marrakesh will be expected to provide concrete evidence that the world is on track to effectively implement the Paris Agreement, in the form of an ambitious workplan to complete the Agreement’s necessary infrastructure. The Agreement provides an inclusive, solid foundation for global climate action, but the “nuts and bolts” of how to implement the Agreement were left to future meetings.

Key implementation tasks that will occupy negotiators in Marrakesh include Finalizing the Paris Agreement’s “enhanced” transparency framework and building an effective ambition mechanism.

Finalizing the Paris Agreement’s “enhanced” transparency framework

Transparency is the backbone of the Paris Agreement: It drives climate action by holding countries accountable to their commitments on action and support. 

But often overlooked are the additional direct domestic benefits of transparency to countries and subnational actors, which helps them to:

  1. understand the scope of the climate challenge;
  2. develop strategies to address it;
  3. assess the extent to which policy interventions are succeeding; and
  4. more easily access resources needed for effective implementation, including via carbon markets.

The Paris Agreement lays out common and legally binding rules that require – for the first time – each country to regularly report on progress they are making in meeting their commitments.  And those reports must go to a panel of experts for technical review. As EDF President Fred Krupp wrote, “It’s the environmental version of President Reagan’s ‘trust but verify.’”  

The details of the Agreement’s enhanced transparency framework must now be elaborated to ensure that countries demonstrate credibly and publicly how they are making progress against their commitments. Support should be made available to assist countries that need help to meet these new requirements. A variety of climate funds and support programs currently exist that can help developing countries to build the necessary institutional and technical capacity. 

At the same time, nations must now prioritize efforts to develop a set of clear accounting rules that prevent “double counting” of emissions reductions and facilitate the high-integrity emissions trading needed to drive emissions down and investment up. Double counting – applying one ton of emissions reductions towards more than one commitment, a sleight of hand that cheats the atmosphere – is explicitly prohibited by the Paris Agreement no less than six times.

Building an effective ambition mechanism

We know that the commitments pledged by countries thus far are not enough to limit warming below new temperature limits set by the Paris Agreement – “well below 2 degrees above pre-industrial levels” – let alone enough to meet the Agreement’s aspirational limit of 1.5 degrees.

That’s why the heart of the accord is the process it establishes to periodically review countries’ progress toward meeting their commitments, and to ratchet up ambition over time, beginning with a global assessment (a “facilitative dialogue,” in UN-speak) in 2018 and updates of commitments in 2020.

The Paris Agreement recognizes that cooperation on emissions trading between countries can help drive the ambitious emissions reductions that science demands. Under Article 6, the Agreement encourages the growing use of bottom-up agreements between jurisdictions to link markets for greater efficiency, as California and Quebec have done. Countries that prefer the option of an international structure can wait to utilize the nascent new market mechanism outlined under Article 6.4 of the Agreement – the strong rules and accounting standards necessary for this new approach must also be fleshed out by negotiators in the coming months and years.

Prompt agreement on accounting for market mechanisms under Article 6, including how to practically implement the requirement to avoid double counting of emissions reductions, will help quickly build the infrastructure needed for carbon markets to drive ambition. In particular, the facilitative dialogue among Parties in 2018 to assess global progress appears to be a good time to provide additional clarity on the tools available under the Paris Agreement to increase ambition. 

What will happen during CMA1 

Although the Paris Agreement specifies that the significant amount of work necessary to build its essential infrastructure must be completed by CMA1, countries are likely to agree a “procedural fix” to give themselves the time necessary to develop the Paris Agreement’s rulebook. For example, Parties could agree to keep CMA1 formally in session rather than gaveling it closed at the end of the COP, extending CMA1 – and the associated deadlines – until perhaps 2018. Countries used a similar fix to minimize procedural wrangling in the successful negotiations that led to the Paris Agreement. Given the Paris Agreement’s surprisingly quick entry into force, it is not surprising that negotiators will need more time to complete the long list of tasks on their plate.

The upshot is that substantive discussions will occur instead in the COP, the APA (the “Ad Hoc Working Group on the Paris Agreement”) and the UNFCCC’s subsidiary bodies, in which all Parties to the UNFCCC can participate. As long as these bodies move promptly to accomplish their “to do” list, keeping discussions under the COP provides an additional benefit to inclusiveness and political “buy-in.” That’s because decisionmaking in the CMA is limited to only those Parties to the Paris Agreement, currently slightly more than half of those participating in the UNFCCC, but expected to be nearly equal by 2018. 

The continuing need for national and “minilateral” action

A decade ago, the presumptive approach to climate progress was a global governance structure driven by international institutions such as the U.N. Now, the challenges are more urgent and the landscape is more decentralized. 

“Minilateral” cooperation among groups of countries is emerging as a focal point for climate action. The prospect of “climate clubs” is gaining currency as a vehicle for securing greater investment, market access, and financial stability, and for driving greater ambition in climate action. For example, a coalition of carbon market jurisdictions, or “CCM”, could go faster and farther than the UNFCCC in promoting coordination among carbon markets, ensuring environmental integrity, and ultimately spurring greater ambition in climate action. Robust coalition standards could potentially inform global approaches, complementing and building additional momentum for climate efforts under the UNFCCC.

No major environmental problem is solved with one document. The Paris Agreement provides a solid foundation for cooperation among jurisdictions, but nations recognize that progress on climate depends on implementation at home. It’s time for countries to roll up their sleeves and get to work on the rules, guidance, and domestic policies that will put Paris into practice. 

The significant political will reflected in the entry into force of the Paris Agreement now needs to be translated to building the essential infrastructure for implementation. The world is watching.

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How a Coalition of Carbon Markets Can Complement the Paris Agreement and Accelerate Deep Reductions in Climate Pollution

Paris_._Eiffel_Tower_in_the_evening_Final

International cooperation is essential to achieve the Paris Agreement’s long-term goal of keeping warming “well below” 2 degrees Celsius. While the Paris Agreement provides several market- and transparency-related tools that can help spur international cooperation, countries must now create the coalitions needed to move forward with implementation. Image Source: Jorge Royan

As countries gather here in Bonn, Germany to begin the work of translating the historic Paris Agreement into action, there is widespread recognition that individual countries’ carbon-cutting pledges must be strengthened in the coming years to deliver the ambitious long term goal agreed in Paris: keep warming “well below” 2 degrees Celsius (3.6 degrees Fahrenheit), and achieve global net zero emissions before 2100.

The Paris Agreement provides several market- and transparency-related tools that can help spur the international cooperation necessary to achieve its long term goal, including provisions that facilitate high-integrity, “bottom-up” linkages of domestic carbon markets to cut carbon pollution. These linkages (described in Article 6 of the Paris Agreement as “cooperative approaches”) promise to reduce costs, and unlock the finance needed to drive deeper global emissions reductions. The agreement on cooperative approaches in Paris reflects the widespread recognition among nations that carbon markets, accompanied by a clear, comprehensive transparency framework, will help drive the deep emissions reductions needed to prevent the most severe impacts of climate change.

With the urgency of climate action clear, the key challenge now becomes: how can we accelerate the international cooperation needed to solve the Paris equation?

One concrete step, drawing on the cooperative approaches provisions of the Paris Agreement, would be to establish a coalition of carbon market jurisdictions to catalyze the development and increase the ambition of domestic carbon markets.   Much as the General Agreement on Tariffs and Trade (GATT) helped broaden participation and ambition in trade, a voluntary coalition of carbon market jurisdictions (CCM) could expand the scope and maximize the cost-effectiveness of ambitious climate action around the globe.

Why coordinate on carbon markets?

As carbon markets continue to expand, coordination among jurisdictions using or considering carbon markets – especially on the rules and standards needed to ensure environmental integrity and maximize cost-effectiveness – will give governments and the private sector the confidence to go faster and farther in reducing their climate-warming pollution.

[pullquote]A coalition of carbon markets can help deliver on the promise of the Paris Agreement and catalyze the deep global emissions reductions that climate science demands.[/pullquote]

Although the Paris Agreement provides a framework for international cooperation on carbon markets, it is ultimately up to countries to work together to agree the detailed rules necessary for international carbon markets to drive emissions down and investment up.

The good news is that groups of countries can make substantial, early progress, ultimately informing and complementing the longer-term UNFCCC process.

 

“Minilateral” efforts can stimulate faster, deeper emissions cuts and strengthen international cooperation

Rapid and early emissions cuts are the single most important determinant of whether the global community is likely to meet the Paris Agreement’s goal to limit warming to well below 2 degrees Celsius (3.6 degrees Fahrenheit). And delaying necessary action to reduce global warming pollution dramatically increases costs to the global economy.

For both the climate and our economies, not all emissions reductions are the same:  the earlier, the better.

That’s why it is so important that Article 6 of the Paris Agreement affirmed that cooperative emissions trading between countries can continue and expand while multilateral accounting guidelines are developed. Transactions will need to be “consistent with” any multilateral guidance developed by Parties to the Paris Agreement over the coming years – particularly to ensure that the same emission reductions are not claimed toward more than one mitigation pledge (“double counted”).

A “minilateral” coalition of carbon markets could complement efforts under the UNFCCC by fostering agreement on detailed standards for the accounting, transparency, and environmental integrity of internationally transferred emissions units. These “nuts and bolts” standards, which will help avoid errors in tallying up total emissions and traded units, form the bedrock of high-integrity emissions trading. Early agreement would give countries the confidence to move forward quickly in implementing their Paris pledges and a basis for increasing their ambition over time.

Practically speaking, future UNFCCC guidance on cooperative approaches will likely be influenced by working examples of international emissions trading, making the success of a carbon markets coalition an important precedent for broader cooperation on markets in the UNFCCC. This process could mirror recent progress on standards for reducing emissions from deforestation and degradation (REDD+), where technical advances made by countries in the Forest Carbon Partnership Facility contributed to greater progress in the UNFCCC.

What’s next?

In Paris, a diverse group of 18 developed and developing countries led by New Zealand announced that they will work quickly together to develop standards and guidelines to ensure the environmental integrity of international market mechanisms.

This group – or another similar coalition – could “set the bar” for market-based climate action by developing robust accounting and transparency standards for environmental and market integrity. Coordinated leadership by forward-looking jurisdictions would help ensure that the growth of international emissions trading is accompanied by enhanced ambition and real, permanent, additional, and verifiable emissions reductions.

Over a longer period, these same guidelines could support the establishment of a common trading framework among a coalition of carbon market jurisdictions. A framework might include mutual recognition of emission units, harmonized approaches to verifying emissions reductions and generating offset credits, and a shared trading infrastructure, which together could ensure environmental integrity and encourage more countries, states, and provinces to cap and price carbon.

Paris began a new, more ambitious chapter in the history of climate action, but much of the chapter is yet to be written. We’re in the race of our lives to finish the work of protecting future generations and building prosperous low-carbon economies. A coalition of carbon markets can help deliver on the promise of the Paris Agreement and catalyze the deep global emissions reductions that climate science demands.

Posted in Carbon Market Cooperation, Emissions trading & markets, Paris / Leave a comment

7 reasons the Paris Agreement signing actually matters

Secretary_Kerry_Sits_With_UN_Secretary-General_Ban_Before_a_Bilateral_Meeting_at_COP21_in_Paris_(23567825382)

United States and more than 160 other countries set to formally sign the Paris Agreement on Earth Day 2016. Photo: Secretary Kerry Sits With UN Secretary-General Ban Before a Bilateral Meeting at COP21 in Paris.
Image Source: U.S. Department of State

UN Secretary General Ban Ki-Moon has invited countries to sign the Paris Agreement at the UN headquarters in New York on April 22, the first day the Agreement is open for signature. Here are seven reasons why the Earth Day ceremony is important.

1) The April 22 signing ceremony for the Paris Agreement is expected to shatter the record for the most countries to formally sign an international agreement in a single day.

Representatives from more than 160 countries (and counting – see the latest at the UN site), including sixty heads of state, will be in New York to signal their commitment to the Agreement struck in Paris last December. This would surpass the previous record of 119 signatures, set by the UN Convention on the Law of the Sea in 1982.

The Paris Agreement aims to hold the increase in the global average temperature to well below 2 °C above pre-industrial levels, and to pursue efforts to limit the temperature increase to 1.5 °C. This record-breaking signing ceremony demonstrates the political momentum behind the Agreement’s global plan to tackle climate change.

2) Signing is the next step for countries to join the agreement, but is not the end of the story.

Signing the Agreement in New York sends a strong and early signal of a country’s intention to launch its domestic processes necessary to join the Agreement. Once those processes are concluded, Governments will formally deposit with the United Nations Secretary-General, who is the depositary of the Paris Agreement, their “instrument of ratification, approval, acceptance or accession,” by which they formally join – and consent to be bound by – the Agreement.

Some nations will sign and join the Agreement on the same day, since they have already completed the necessary domestic procedures back home. States that don’t sign on April 22 still retain the ability to join the Agreement later.

3) The content and structure of the Paris Agreement means the U.S. can join quickly.

Like the vast majority of international agreements that the U.S. joins, the Paris Agreement does not require Senate action. Presidents from Washington onward — including Ronald Reagan, who did it 14 times in his second term — concluded agreements like this as “executive agreements,” based on existing executive authorities.

These executive agreements have the same binding force domestically as any other international treaty or agreement the U.S. joins. As long as the U.S. president has authority under existing U.S. law to implement the Paris Agreement’s provisions, the pathway to U.S. participation in the Paris Agreement is open, and does not need to include a stop in the Senate.

As it did with the Minamata Convention on Mercury, the U.S. can join the Agreement by simply depositing a brief formal document (called an “instrument of acceptance”) with the UN.

4) Early implementation of the Paris Agreement is now more likely.

Language in the draft agreement preventing it from taking effect until 2020 was dropped during the final stages of negotiations in Paris, so the Agreement will enter into force 30 days after at least 55 countries representing at least 55% of global emissions join.

Together with important statements from the U.S. and China (which together represent almost 38% of the world’s emissions) indicating they will sign the Agreement on April 22, and formally join the Agreement this year, the record-breaking signing ceremony means that many countries are on the path to joining the Agreement soon.

The Paris Agreement is likely to enter into force well before 2020, and possibly by 2017, making the provisions of the Agreement legally binding on those countries that have joined. Early entry into force offers the opportunity to accelerate a global transition to the prosperous, carbon-neutral economies of the future, and better address the needs of those communities in the U.S. and abroad that are most vulnerable to the impacts of climate change.

5) Momentum is building for markets to play a central role in meeting the ambitious climate goals agreed in Paris, and called for by science.

The groundswell of international support for the Paris Agreement contributes to confidence that countries can achieve the Paris Agreement’s vision of international cooperation on carbon markets to reduce emissions. Only by harnessing the ingenuity and creativity of business, entrepreneurs, and innovators will we be able to drive down emissions fast enough and far enough to achieve the reductions that the science demands. An April 14 report by EDF and the International Emissions Trading Association (IETA) found countries can surpass their Paris pledges by pricing carbon through carbon markets.

By affirming a role for carbon markets, the Paris Agreement recognizes the realities already on the ground, where emission trading systems are at work in over 50 jurisdictions home to nearly 1 billion people. When China adopts a national carbon trading system, beginning in 2017, that number will rise to 2 billion – almost a third of the world’s population.

The Paris Agreement provides a framework for cooperation among jurisdictions, but nations still must step up with effective and transparent domestic carbon markets. Almost half of all countries have already either stated their intention to use international carbon markets to cut their carbon pollution, or are already employing them domestically, at the national or subnational level.

6) Accelerated action on forest protection is a key to global and national efforts to reduce emissions.

Many of the countries participating in the New York signing ceremony are taking important steps to protect their forests, under an agreed international framework for Reducing Emissions from Deforestation and forest Degradation (REDD+). Forests are the only sector specifically mentioned in the Paris Agreement, signaling political recognition of the urgent need for better protections as well as financial incentives that confirm that forests are more valuable alive than dead. Outside of the climate negotiations, Germany, Norway and the UK confirmed their support by pledging $5 billion in REDD+ funding between 2015-2020, while developing countries presented their progress on creating and implementing REDD+ programs.

7) Clear and growing momentum to implement the Paris Agreement shines a spotlight on the next big climate win the world needs: adoption of a global market-based measure in the International Civil Aviation Organization (ICAO).

International aviation wasn’t covered in the Paris Agreement, due in part to these emissions falling outside national emissions accounts. However, the UN’s aviation arm is working on a deal this fall that would limit emissions from this rapidly growing sector. ICAO is developing a proposal for airlines to offset all emissions above 2020 levels through high-quality, rigorously verified emissions reductions in other sectors – such as through reductions in emissions from deforestation, achieved under the UNFCCC’s “REDD+ Framework”. A cap on aviation at 2020 levels could achieve 8 billion tons of emissions reductions in the next two decades – reductions that would otherwise not be obtained under the Paris Agreement.

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Solving the “Paris equation”: The role of carbon markets in meeting the Paris Agreement’s ambitious goals

Source: UN,

Source: Flickr, UN Photo/Mark Garten

As nations around the world consider the results of the historic climate agreement reached at the 21st annual climate talks in Paris last December, one thing is clear: the Paris Agreement is contributing to – and a sign of – growing momentum around the world to address climate change. For the first time in history, nearly all the countries of the world have put forward concrete pledges to cut pollution and address the impacts of climate change on local communities.

Two significant outcomes of the Paris Agreement reflect that momentum:

  1. A more ambitious global goal, in which nations agreed to hold warming to “well below” 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels, and “pursue efforts” to limit warming to no more than 1.5 degrees Celsius (2.7 degrees Fahrenheit).
  2. A requirement that nations come back to the table every five years to strengthen their individual pledges, in order to achieve their collective goal over time.

While the pathway necessary to limit warming to 2.7 or even 3.6 degrees Fahrenheit is not specified by the Paris Agreement, nations did agree that they would achieve a “balance” between anthropogenic (i.e., human-caused) emissions of greenhouse gases (GHGs) and anthropogenic removals by so-called carbon sinks, such as via reforestation or afforestation, “in the second half of this century.” That translates to the following simple equation, which nations agreed to solve no later than 2100:

(anthropogenic emissions of GHGs) – (anthropogenic removal of GHGs by forests and other sinks) = 0

Notably, nations also provided several market- and transparency-related tools that could help solve this “Paris equation”:

  • Provisions that facilitate high-integrity, “bottom-up” linkages of domestic carbon markets to cut carbon pollution. These linkages (described in the Agreement as “cooperative approaches”) promise to reduce costs, and unlock the finance needed to drive deeper global emissions reductions;
  • A new, centralized market mechanism, governed by the UN Framework Convention on Climate Change (UNFCCC), to reduce GHG emissions and contribute to sustainable development; and
  • An enhanced transparency framework, requiring regular reporting and review of all nations’ climate efforts.

These three elements of the Paris Agreement reflect the widespread recognition among nations that carbon markets accompanied by a clear, comprehensive transparency framework will help drive the deep emissions reductions called for by science.

 

What the Paris Agreement means for carbon markets

By affirming a role for carbon markets in international climate cooperation, the Paris Agreement recognizes the realities already on the ground, where emission trading systems are at work in over 50 jurisdictions home to nearly 1 billion people. When China adopts a national carbon trading system, beginning in 2017, that number will rise to 2 billion – almost a third of the world’s population.

Figure 1:  Existing, Emerging, and Potential Carbon Pricing Jurisdictions

And more than half of the world’s countries are using, or plan to use, carbon markets to stimulate the innovation and investment needed to meet their Paris climate pledges.

With the UN now blessing the growing use of bottom-up cooperation between jurisdictions to link their markets and spur greater efficiency, as California and Quebec have done, the challenge now becomes how to accelerate the transparent, high-integrity international cooperation needed to solve the Paris equation.  That cooperation – needed both inside and outside the UNFCCC – is the subject of my next post.

Posted in Emissions trading & markets, Paris, UN negotiations / Leave a comment