German Emissions Trading Authority

Bonn Climate Change Conference - November 2017

An important aspect in the design of the new market mechanisms under Article 6 of the Paris Agreement is to ensure a robust accounting of international emission reductions. The preliminary discussion paper "Robust Accounting of International Transfers under Article 6 of the Paris Agreement – Preliminary Findings" drafted in preparation for the international climate conferences in Marrakech (07 to 18/11/2016) and commissioned by the German Environment Agency in context of the Bonn Climate Conferences (06 to 17/11/1017), has been supplemented and finalised.

This paper discusses important aspects and approaches to ensure robust accounting for the international transfer of emission reductions from market mechanisms under Article 6 of the Paris Climate Agreement. It initially provides an overview of what aspects need to be regulated and gives possible regulatory approaches. The publication has now been expanded to include the topic of how the vintage of mitigation outcomes and the timing frames of mitigation targets can be accounted for.

In addition, issues of tracking and documenting international transfers are analysed.

Side Event at COP 23: Are countries ready for Article 6?

Various countries find themselves at different stages of carbon market development, and these stages can have specific implications for the potential use of Article 6. The side event presents the insights from case study research on Ukraine, Vietnam and Ethiopia, mapping their current readiness towards market based approaches and drawing recommendations for ongoing negotiations and entry points for international support.

Preliminary results of a German research project focusing on Article 6 and international cooperation on carbon markets will be presented and discussed.

01/11/2017

Workshop: Carbon offsetting in international aviation

On 30/11/2016 the German Emissions Trading Authority (DEHSt) at the German Environmental Agency organized the workshop „Offsets under ICAO's GMBM: A Robust Design Approach for Ensuring Environmental Integrity of Offsets under a Global MBM Scheme for International Aviation in the light of the Paris Agreement”.

After longstanding negotiations, the International Civil Aviation Organisation (ICAO) in October 2016 adopted its resolution on a Global Market Based Measure (GMBM). ICAO´s aim is to stabilise international aviation carbon emissions at the level of 2020. The GMBM called CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) as a key element of ICAO´s “basket of measures” to strive to mitigate the climate impact of the sector, was developed as an offsetting mechanism.

In this context the workshop with international experts focused on coupling CORSIA and the marked-based mechanisms under the Kyoto Protocol (especially the CDM) as well as the new marked-based mechanisms defined under the Paris Agreement within the UNFCCC (Workshop Part 1). In addition, important aspects of ensuring environmental integrity for offsets (Part 2) and deriving a pathway towards implementation of the CORSIA (Part 3) were discussed.

10/05/2017

Slides

Bonn Climate Change Conference - May 2017

With the aim to continue providing new insights on the new market mechanisms defined under the Paris Agreement and spread out the results of current research projects on the configuration of those mechanisms, the German Environment Agency publishes a new discussion paper which explores key issues and options to achieve environmental integrity, one of key overarching issues of Article 6 of the Paris Agreement that will be discussed during the upcoming Climate Change Conference in Bonn.

The paper proposes that environmental integrity in context of Article 6 means that using international transfers does not result in higher global GHG emissions than if mitigation targets of NDCs had been achieved only through domestic mitigation action. It identifies four issues that can affect the global GHG emissions outcome from international transfers:

With the aim to continue providing new insights on the new market mechanisms defined under the Paris Agreement and spread out the results of current research projects on the configuration of those mechanisms, the German Environment Agency publishes a new discussion paper which explores key issues and options to achieve environmental integrity, one of key overarching issues of Article 6 of the Paris Agreement that will be discussed during the upcoming Climate Change Conference in Bonn.

The paper proposes that environmental integrity in context of Article 6 means that using international transfers does not result in higher global GHG emissions than if mitigation targets of NDCs had been achieved only through domestic mitigation action. It identifies four issues that can affect the global GHG emissions outcome from international transfers:

  • robust accounting for international transfers
  • the quality of units from mechanisms
  • the ambition of the NDC target of the transferring country and
  • presence of incentives and disincentives for further mitigation action.

The paper also explores for crediting mechanisms how additionality could be demonstrated and how emission baselines could be set under the new framework of the Paris Agreement where nearly all Parties have communicated a mitigation target in their NDC.

The contents of this publication do not necessarily reflect the German Environment Agency’s official opinion.

09/01/2014

Paris Agreement

As elements of the Kyoto Protocol, applicability of the project-based mechanisms CDM and JI is bound to the Kyoto Protocol’s commitment periods.

The Paris Climate Protection Agreement adopted in 2015 will apply from 2021 onwards. Article 6 also provides for the possibility for the international use of market-based mechanisms.

The German Emissions Trading Authority’s (DEHSt) experts support the Federal Ministry for the Environment in the political configuration of these instruments and in the drafting of implementing regulations within the climate negotiations under the auspices of the United Nations (UNFCCC).

The workshop "Options for enhancing international cooperation to implement Article 6 of the Paris Agreement – German and international perspectives" was organised by the contractor "adelphi" within the UFOPLAN project "Analysis of interactions between New Market Mechanisms and Emission Trading Systems" (Project number: FKZ 3714 41 5060) on 25 January 2017.

German and international experts discussed the status of negotiations and the usefulness of Article 6 using countries such as Ukraine, Vietnam and Ethiopia as examples.

Workshop 25/01/2017

Workshop 15/02/2016

Climate Change Conference in Marrakech – New Discussion Papers from the German Environment Agency

In preparation for the next international climate change conference in Marrakech (07/ to 18/11/2016) three discussion papers were developed on behalf of the German Environment Agency. These deal with the key issues for discussion and drafting of international rules for Article 6 of the Paris Agreement. Article 6 enables the use of international market mechanisms to fulfill the contribution to climate protection by the countries.

The contents of the publications do not necessarily reflect the German Environment Agency’s official opinion.

Slides

Discussion Paper: CDM Supply Potential up to 2020 (09/08/2017, PDF, 651KB, File does not meet accessibility standards.)

This pa­per was writ­ten for the Ger­man En­vi­ron­ment Agen­cy (UBA) as part of the project ti­tled “Anal­yse der ak­tuellen En­twick­lung im glob­alen Kohlen­stoff­markt” (FKZ 3715 42 510 0). This project is be­ing car­ried out by New­Cli­mate In­sti­tute (co­or­di­na­tion) in co­op­er­a­tion with Öko-In­sti­tut and Lam­bert Schnei­der.

Discussion Paper: Market Mechanisms in the Paris Agreement – Differences and Commonalities with Kyoto Mechanisms (02/11/2016, PDF, 312KB, File does not meet accessibility standards.)

This dis­cus­sion pa­per anal­y­ses Ar­ti­cle 6 of the Paris Agree­ment and com­pares the Paris ap­proach­es with those of the Ky­oto Pro­to­col. In ad­di­tion, it spec­i­fies valu­able ex­pe­ri­ence from the Ky­oto mech­a­nisms for the im­ple­men­ta­tion of Ar­ti­cle 6.

Discussion Paper: Robust Accounting of International Transfers under Article 6 of the Paris Agreement – Preliminary Findings (02/11/2016, PDF, 560KB, File does not meet accessibility standards.)

This pa­per presents pre­lim­i­nary re­sults about key is­sues and op­tions for a ro­bust ac­count­ing of in­ter­na­tion­al trans­fers un­der Ar­ti­cle 6 of the Paris Agree­ment.

Discussion Paper: Categorization of INDCs in the light of Art. 6 of the Paris Agreement (02/11/2016, PDF, 289KB, File does not meet accessibility standards.)

This dis­cus­sion pa­per anal­y­ses the var­i­ous as­pects of the 163 climate pro­tec­tion con­tri­bu­tions sub­mit­ted that are im­por­tant for a ro­bust ac­count­ing of in­ter­na­tion­al trans­fers. This in­cludes for ex­am­ple, the type of tar­get, the ref­er­ence year or pe­ri­od, the tar­get year or pe­ri­od, the sec­toral and ge­o­graph­i­cal cov­er­age of the tar­get or the in­tend­ed use of mar­ket mech­a­nisms.

CDM and the development of new market-based mechanisms

Klimaschutzprojekte zur Anrechnung von auswärtigen Emissionsminderungen auf heimische Minderungsverpflichtungen befinden sich in einer kritischen Phase. Die projektbasierten Mechanismen – speziell der CDM – bieten zunehmend weniger Anreize zur Umsetzung von Klimaschutzprojekten in Entwicklungsländern.

Zwar wurde die Entwicklung neuer Marktmechanismen international beschlossen, deren genaue Ausgestaltung und Umsetzungsmodalitäten sind bislang jedoch noch nicht definiert. In dieser Übergangsphase bieten bilaterale Länderabkommen die Möglichkeit, Pilotprojekte auf sektoraler Ebene umzusetzen und dabei die Erfahrungen des CDM zu nutzen.

Der vorliegende Zwischenbericht des UFOPLAN-Vorhabens „Die Fragmentierung des Kohlenstoffmarktes und Ansätze zum Umgang damit“ bewertet die Möglichkeiten zur Implementierung von Pilotprojekten auf Grundlage von bilateral vereinbarten Referenzwerten. Die Forschung präsentiert Konzepte zur Entwicklung dieser Referenzwerte, welche am Chilenischen Stromsektor sowie dem sozialen Wohnungsbausektor Südafrikas getestet wurden. Außerdem belegt die Studie, dass entsprechend angepasste Elemente des CDM bei der Entwicklung neuer marktbasierter Mechanismen genutzt werden können.

Sectoral approaches as a bridge between existing and future mechanisms

Market-based systems are important elements in the international climate protection regime. In addition to enabling cost-effective mitigation efforts, they can also contribute to increasing the ambition level in both developed and developing countries. New international market approaches were introduced as early as at the 17th Conference of the Parties of the UNFCCC in Durban. Firstly, a new market mechanism (NMM) was specified, secondly, the development of a Framework for Various Approaches (FVA) was initiated. These instruments should contribute to a scaling up of emission reductions from those previously expedited by the Clean Development Mechanism (CDM) and ultimately holistically cover all sectors with their reduction potential. Also, these new instruments should facilitate a much greater net reduction effect than that achieved by the CDM.

Since the exact configuration of NMM and FVA is still pending and their implementation is only realistic in the long-term perspective, the question arises as to how to shape the transition period into a new useful climate treaty for market mechanisms.

This final report of the UFOPLAN project "Development of sectoral market mechanisms in the transition period to a new climate treaty" investigates how sectoral approaches in an international climate policy regime can build a bridge between existing and future mechanisms and instruments.

Final report of the UFOPLAN project "Development of sectoral market mechanisms in the transition period to a new climate treaty"

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