COP24 Katowice, 2018

United Kingdom Publication December 2018

Krzysztof Gorzelak

Katowice, 12 December 2018.

An event that drew a large audience today was Al Gore’s speech on the current climate crisis and its solutions. He spoke on the negative impact of greenhouse emissions, including the rise in deaths linked to pollution, and noted that large-scale migration is inevitable in the future as many parts of the world become uninhabitable.

Later that afternoon, the Talanoa Dialogue culminated with the Talanoa Call for Action, encouraging societies to step up their efforts in order to meet the global climate goals in the Paris Agreement. The full text of the Talanoa Call for Action can be found here.

Today also saw an IETA side event, “Harnessing Carbon Markets Under Article 6 to Increase Ambition: Lessons From Research and Practice”. The event included a presentation from Nat Keohane of the Environmental Defense Fund who expressed the view that the global use of carbon markets could potentially double climate-change achievements for the same cost as the current NDCs. He noted that the success of article 6 depends on (i) the implementation of proper reporting and accounting frameworks and the avoidance of restrictions on trading; (ii) comprehensive reporting (including all ITMO transfers) and (iii) ensuring the equal accounting treatment of all units.

During the same event, a panel member gave same insight into the negotiation process of article 6. He was optimistic, noting that progress has been made, although some important issues remain unresolved. The most notable of these are the scope of the NDCs, the transition of the Kyoto Protocol, the use of share proceeds and how to define the overall mitigation goals.

Krzysztof Gorzelak

Katowice, 10 December 2018.

While week one of COP24 ended with a general sense of anxiety due to visible difficulties in reaching agreement on several issues (such as article 6), it is worth noting some of the side events that took place at the beginning of week two.

In the IETA Side Event Room, attendees learnt about the emerging guidelines for corporate climate action in supply chains. Views were presented by representatives from both corporates (including Mars) as well as NGOs (Verra, Quantis and Gold Standard). Panelists agreed that taking a quantitative approach to assessing the carbon footprint in a supply chain is a complex but essential task, as if it is not measured, it cannot be managed.

Another noteworthy IETA event was a discussion on linking emissions trading systems, with a particular focus on the California and Quebec systems. The importance of expertise in this area is expected to grow alongside the emergence of new emissions trading systems in line with the goals of article 6. Interestingly, panelists also discussed the topic of withdrawing from a linked system. This took place last year, when Ontario withdrew from the California and Quebec system.

At the Multilateral Development Banks Pavilion, panelists from entities such as EIB (the European Investment Bank), EBRD (European Bank for Reconstruction and Development) and FMO (the Dutch Development Bank) focused on the issue of implementing article 2.1.c and applying best practices to move climate change action forwards. During a lively discussion, panelists faced difficult questions from the audience on topics such as the continuing engagement of banks in gas projects.

The ‘Low Emission Solutions Conference’ took place at the Sustainable Development Goals Pavilion with a keynote lecture from Professor Jeffrey Sachs (joining via videolink from the Vatican City). Sachs emphasised that climate solutions must come from engineers, while diplomats, lawyers and economists can only promote developed technical solutions. Sachs called for inspiring a global appetite for renewable energy and for adherence to one simple rule: no more coal power plants. He urged parties to be practical during COP discussions. In his view, discussions based on economic solutions are misguided, as they draw the public’s attention primarily to  mechanisms such carbon tax and emissions trading systems. These are not true solutions for climate change, according to Sachs; technical developments are, and only with those technical developments can economic or legal instruments be appealing to the public.

Krzysztof Gorzelak

Katowice, 7 December 2018.

The International Emissions Trading Association hosted an event today called “Progress in the Article 6 Negotiations” dedicated to discussing the remaining sticking points on the preparation of (i) draft guidance on the cooperative approached referred to in article 6.2 of the Paris Agreement and (ii) the draft CMA decision on the draft rules and procedures for the mechanism established by article 6.4.

According to the participants in the negotiation process, some of the most challenging issues are:

(1) Agreeing on the share of proceeds. This refers to article 6.6 of the Agreement, pursuant to which a share of the proceeds from activities under the article 6.4 mechanism is used to cover administrative expenses, and to assist developing country parties that are particularly vulnerable to climate change, in order to meet the costs of adaptation.

(2) Agreeing on a specific mechanism for the overall mitigation of global emissions (OMGE). This could be implemented either by way of automatic cancellation of a fixed percentage of ITMO (international transfer mitigation outcome) effected by the registry at the time of issuance/first transfer of ITMO, or by way of discounting effected by a party acquiring/using ITMO.

(3) Agreeing baselines for the calculation of emission reductions. These can take form of (i) a historic or “business as usual” baseline; (ii) a conservative baseline, taking into account the use of the best available technology or (iii) a standardised baseline.

(4) Agreeing the concept of additionalityof emission reductions achieved, specifically whether “additionality” should refer to what would otherwise occur in the absence of any activity or whether reference should be made to a party’s specific NDC.

The session of Subsidiary Body for Scientific and Technological Advice’s work on the above shall close on Saturday 8 December. The Presidency will manage the process going forwards at governmental level.

Krzysztof Gorzelak

Katowice, 6 December 2018.

One of the most significant events of day four of COP24 was a wrap-up meeting of the preparatory phase of the Talanoa dialogue. The preparatory phase will be followed by the political phase, to be launched on Tuesday 11 December.

The Talanoa dialogue is a procedure that the parties to the Paris Agreement decided to implement at COP23, requesting both the presidency of COP 23 and the incoming presidency of COP 24 to jointly lead the process. Talanoa is a traditional word used in Fiji and the Pacific Islands meaning a process of inclusive and transparent dialogue that builds empathy in order to make decisions for the collective good. The process involves sharing ideas, skills and experiences through storytelling.

The Talanoa dialogue was initiated in order to answer three questions as regards the parties’ emission reduction goals: Where are we? Where do we want to go? And how do we get there?

During the preparatory phase, the Talanoa Platform was opened to enable various stakeholders to provide input. In addition, at the meeting of the subsidiary bodies in May 2018, the parties and other actors shared their stories and answers to the above questions. A number of regional and national events were also held throughout 2018. A summary of the preparatory phase can be found here.

The answer to the third question (where do we want to go?) can be summarized in general terms as a reiteration of the goal to hold the increase in the average global  temperature to well below 2 °C above pre‐industrial levels, and to pursue efforts to limit this increase to 1.5 °C. On the 6 December 2018 wrap-up, attendees heard the outline of an IPCC special report on the impact of global warming of 1.5 °C above pre-industrial levels (which can be found here). This was followed by an open discussion allowing the parties and other stakeholders to provide general reflections on the preparatory phase, including the implications of the IPCC report. Voices from different parts of the world stressed different aspects. Representatives from countries such as the Maldives, the Marshall Islands and Grenada (already seriously affected by increasing sea levels) expressed extreme concern at the report. They were supported by representatives from the EU and Norway, who also urged that serious action be taken at national level. At the same time, representatives from developing countries such as India, Botswana, Nigeria and Iran pointed out that the report does not address all crucial issues relating to emissions reduction, such as the equity of the parties and the inclusivity and multilateralism of potential solutions. These differing statements already give some idea about how difficult the next phase will be, and anticipate some of the tensions expected when the parties approach the adoption of the Paris Rulebook at the end of COP24.

Krzysztof Gorzelak

Katowice, 5 December 2018.

A remarkable outcome of today’s proceedings at COP24 was the adoption of the Katowice Declaration on Sound Carbon Accounting. The declaration’s aim is expressed through its subtitle: “Avoiding Double Counting in Carbon Markets”.

The declaration was issued by the International Emissions Trading Association (of which Norton Rose Fulbright is a member) along with 40 other business associations, non-governmental organisations and corporations, including market leaders such as Acciona, EDF and Shell.

Signatories of the declaration expressed a commitment to “environmental integrity, transparency and the avoidance of double counting of mitigation towards the achievement of the Paris Agreement temperature goals.” This implies that any instruments linked to emission allowances or emission reduction units developed in line with article 6 of the Paris Agreement (which refers to them as “internationally transferred mitigation outcomes”) should respect the rule of avoiding double counting.

The key aim is to ensure that the concept of double counting is unambiguous and does not lead to different results in different jurisdictions. For this reason, the signatories of the declaration urged parties to the Paris Agreement to deliver clear accounting guidelines at COP24 for the application of adjustments in their emissions levels to avoid double counting. Attendees had the opportunity today to discuss this issue at a panel arranged by IETA. One of the speakers, Kay Harrison (a Lead Negotiator at COP24 for New Zealand) noted that the lack of a clear definition of double accounting may lead to differing understandings of the term. Parties could, for example, take a narrow approach and claim eligibility for emission allowances or emission reduction units without making any efforts to promote sustainable solutions, on the sole basis that their emissions have been reduced due to economic slowdown.

COP24 ends on Friday 14 December, so we will know by the end of next week whether the parties manage to achieve their goal.

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