Time to come to grips with double counting

Time to come to grips with double counting

The post-Paris world brings new challenges to countries — in particular to developing countries that are now expected to communicate and achieve emission reductions. This new reality adds a layer of complexity in piloting cooperative approaches under the Paris Agreement, not only because developing countries must now consider how to achieve their nationally determined contributions (NDCs), but also because there are a number of questions relating the attribution and accounting of emission reductions within and between countries.  

Double counting can occur in multiple forms and includes (i) different countries claiming the same mitigation outcome, (ii) the same emission reduction leading to more than one unit, or even (iii) the same unit being recorded twice for compliance purposes. Unless properly dealt with, double counting risks compromising the environmental integrity of the climate regime by distorting actual greenhouse emissions achieved by countries. If rules on how to avoid double counting are not agreed swiftly, their absence may stifle efforts among countries to cooperate in the implementation of the Paris Agreement.

The Paris Agreement contains three mechanisms through which countries can interact to deliver on their NDCs. All three may – to a greater or lesser extent – risk double counting of greenhouse gas emissions and include: 

  • Article 4.16 recognizes the possibility of two or more countries submitting joint NDCs. This is currently the case for the European Union, but the option is not restricted to regional economic integration organizations and may in future be adopted by like-minded countries willing to work together to increase mitigation efficiency. Agreements on how countries allocate their emission levels will have to be transparent, ensuring that internal mechanisms follow robust tracking procedures and account for possible direct or indirect overlaps in coverage (e.g. between trading and non-trading sectors);
  • Articles 6.2 and 6.3 emphasize the possibility of voluntary cooperation through the transfer of ‘mitigation outcomes’ between countries. As these transfers can be triggered by mechanisms developed outside the UNFCCC framework, such as through the linking of emissions trading schemes and bilateral results-based payment arrangements, robust and clear principles will be required at the UNFCCC-level to determine what types of accounting adjustments are necessary and how these should be reflected in NDCs and national inventories; 
  • Article 6.4 establishes a mechanism to promote mitigation and sustainable development through which authorized private parties can directly engage. Although lessons from the Kyoto Protocol may prove very useful and constructive in devising the necessary rules and tools (such as a common transaction log and a standard reporting format for units), the new mechanism will have to go beyond offsetting and result in overall mitigation thus requiring extra attention to prevent double counting between the host and the recipient country.      

The Paris Agreement has addressed the issue of double counting in general terms only. It requires countries to avoid double counting when quantifying emissions used towards their NDCs and when engaging in the transfer of mitigation outcomes. However, transparent rules that concretely outline how countries are to do this are currently lacking. Discussions are set to take place under the Ad-Hoc working group for the Paris Agreement (APA), with results being presented for consideration by the first session of the Conference of the Parties to the Convention serving as Meeting of the Parties to the Paris Agreement (CMA).  

Over the last decade Climate Focus has worked with different partners on how to engage in cooperative and marked-based approaches while safeguarding the environmental integrity of climate policies and mechanisms. Analysis conducted include the analysis of Joint Implementation and domestic offset projects in EU Member States, the overlapping claims between governments that cooperate in the context of results-based finance for REDD+, the ‘nesting’ of land-use projects in broader accounting frameworks, the design of strategies to avoid double counting in the context of NAMAs and sectoral approaches, among others.

To facilitate the implementation of the Paris Agreement, Climate Focus is working on a project that aims at developing options on how to avoid double counting of ‘transferred mitigation outcomes’ and emission reductions under the Paris Agreement, with particular consideration of results-based payments, the regulated and voluntary carbon market. Climate Focus is bringing together a group of recognized experts (from different countries, different sectors, and different disciplines) to develop rules that are conservative enough to eliminate the risk of double counting but simple enough not to constrain mitigation action.