How to operationalize accounting under Article 6 market mechanisms of the Paris Agreement

The role of market mechanisms was far from certain in the lead up to the 2015 Paris Climate Conference. The use of ‘constructive ambiguity’ led to Article 6 of the Paris Agreement, with Article 6.2 specifying a mechanism with limited international oversight, and Article 6.4 establishing a ‘Sustainable Development Mechanism’ (SDM) subject to detailed rules. Clear operationalization of these mechanisms remains a challenge, especially regarding the critical accounting issue that could not be resolved at the 2018 Katowice Climate Conference (COP24) – how to apply corresponding adjustments, especially regarding sectors not covered by targets under nationally-determined contributions (NDCs). By using fictitious examples, we explain two possible approaches to using Internationally Transferred Mitigation Outcomes (ITMOs) under Article 6.2 for achieving NDCs: a ‘target-based’ one where the acquiring Party adds the ITMO amount to the target level of its NDC; and a ‘tally-based’ one where the acquiring Party removes the ITMO amount from the final tally of its NDC. We discuss how these approaches influence the way to make corresponding adjustments and to avoid ‘double counting’. The first one leads to ‘target/budget-based accounting’, the second one to ‘emission-based accounting’. For mitigation outside the scope of the host Party's NDC, we propose using a tally-based interpretation of ITMO use, as opposed to the target-based variety used in the 1997 Kyoto Protocol, and stress the need for additionality testing. This interpretation allows for mandatory corresponding adjustments for all ITMO usage, while the host Party NDC level remains unchanged. A buffer registry is created for corresponding non-NDC adjustments of the selling party.

Key policy insights

• Under the Paris Agreement, transfers of emissions units between two countries through the Article 6 mechanisms need a corresponding adjustment on both sides to prevent double counting.

• Corresponding adjustments can be applied either to emissions targets under NDCs or measured emissions levels.

• The transfer of emissions reduction credits generated outside an NDC should lead to a corresponding adjustment of a buffer registry of the selling country, but not its emissions level/NDC target. Such credits should only be generated if additionality of the reductions is shown.

     

Zero carbon energy system pathways for Ireland consistent with the Paris Agreement

The Paris Agreement is the last hope to keep global temperature rise below 2°C. The consensus agrees to holding the increase in global average temperature to well below 2°C above pre-industrial levels, and to aim for 1.5°C. Each Party’s successive nationally determined contribution (NDC) will represent a progression beyond the party’s then current NDC, and reflect its highest possible ambition. Using Ireland as a test case, we show that increased mitigation ambition is required to meet the Paris Agreement goals in contrast to current EU policy goals of an 80–95% reduction by 2050. For the 1.5°C consistent carbon budgets, the technically feasible scenarios' abatement costs rise to greater than €8,100/tCO₂ by 2050. The greatest economic impact is in the short term. Annual GDP growth rates in the period to 2020 reduce from 4% to 2.2% in the 1.5°C scenario. While aiming for net zero emissions beyond 2050, investment decisions in the next 5–10 years are critical to prevent carbon lock-in.

Key policy insights

• Economic growth can be maintained in Ireland while rapidly decarbonizing the energy system.

• The social cost of carbon needs to be included as standard in valuation of infrastructure investment planning, both by government finance departments and private investors.

• Technological feasibility is not the limiting factor in achieving rapid deep decarbonization.

• Immediate increased decarbonization ambition over the next 3–5 years is critical to achieve the Paris Agreement goals, acknowledging the current 80–95% reduction target is not consistent with temperature goals of ‘well below’ 2°C and pursuing 1.5°C.

• Applying carbon budgets to the energy system results in non-linear CO₂ emissions reductions over time, which contrast with current EU policy targets, and the implied optimal climate policy and mitigation investment strategy.

     

Is India pulling its weight? India’s nationally determined contribution and future energy plans in global climate policy

Ahead of the Conference of Parties (COP) 24 where countries will first take stock of climate action post Paris, this paper assesses India’s progress on its nationally determined contribution (NDC) targets and future energy plans. We find that, although India is well on track to meet its NDC pledges, these targets were extremely modest given previous context. Furthermore, there is considerable uncertainty around India’s energy policy post 2030 and if current plans for energy futures materialise, the Paris Agreement’s 2 degrees goal will be almost certainly unachievable. India’s role in international climate politics has shifted from obstructionism to leadership particularly following the announcement of withdrawal by the United States from the Paris Agreement, but analysis reveals that India’s ‘hard’ actions on the domestic front are inconsistent with its ‘soft’ actions in the international climate policy arena. Going forward, India is likely to face increasing calls for stronger mitigation action and we suggest that this gap can be bridged by strengthening the links between India’s foreign policy ambitions, international climate commitments, and domestic energy realities.

Key policy insights

• India’s NDC pledges on carbon intensity and share of non-fossil fuel capacity are relatively modest given domestic context and offer plenty of room to increase ambition of action.

• India’s ‘soft’ leadership in global climate policy can be matched by ‘hard’ commitments by bringing NDC pledges in line with domestic policy realities.

• There is significant uncertainty around future plans for coal power in India which have the potential to exceed the remaining global carbon budget for 2 degrees.

     

Nationally Determined Contributions under the Paris Agreement and the costs of delayed action

Current country-level commitments under the Paris Agreement fall short of putting the world on a required trajectory to stay below a 2°C temperature increase compared to pre-industrial levels by the end of the century. Therefore, the timing of increased ambition is hugely important and as such this paper analyses the impact of both the short and long-term goals of the Paris Agreement on global emissions and economic growth. Using the hybrid TIAM-UCL-MSA model we consider the achievement of a 2°C target against a baseline of the Nationally Determined Contributions (NDCs) while also considering the timing of increased ambition of the NDCs by 2030 and the impacts of cost reductions of key low-carbon technologies. We find that the rate of emissions reduction ambition required between 2030 and 2050 is almost double when the NDCs are achieved but not ratcheted up until 2030, and leads to lower levels of economic growth throughout the rest of the century. However, if action is taken immediately and is accompanied by increasingly rapid low-carbon technology cost reductions, then there is almost no difference in GDP compared to the path suggested by the current NDC commitments.

Key policy insights

• Delaying the additional action needed to achieve the 2°C target until 2030 is shown to require twice the rate of emissions reductions between 2030 and 2050.

• Total cumulative GDP over the century is lower when additional action is delayed to 2030 and therefore has an overall negative impact on the economy, even without including climate change damages.

• Increased ratcheting of the NDC commitments should therefore be undertaken sooner rather than later, starting in conjunction with the 2023 Global Stocktake.

• Early action combined with cost reductions in key renewable energy technologies can reduce GDP losses to minimal levels (<1%).

• A 2°C future with technological advancements is clearly possible for a similar cost as a 3.3°C world without these advances, but with lower damages and losses from climate change.

     

Low carbon scenarios and policies for the power sector in Botswana

The Government of Botswana has pledged a nationally determined contribution (NDC) as a commitment to the Paris Agreement. For the power sector, the NDC states that the government expects renewable energy (RE) to meet 25% of peak electricity demand by 2030. However, due to high initial cost of RE technologies, the government plans to maintain a coal-based power system in the future. Therefore, the purpose of this paper is to examine Botswana’s national plan from an economic perspective, using scenario and cost analysis, to explore the possibility of the power sector’s low carbon transition in the light of Botswana’s NDC. Five scenarios are designed to reflect a range of investment cost changes of RE technologies. While most scenarios only achieve 19% (P3, P4 and P5) and 54% (P6) of the NDC’s power sector target, the P7 scenario far exceeds the goal by achieving 188% of the NDC target. Furthermore, as the difference of levelized cost of electricity among the scenarios is minimal, the P7 scenario is the most attractive pathway for the government. Even for other scenarios, the government should still deploy the suggested capacity of solar photovoltaic (PV) as it is both economically and socially beneficial in the long term. However, in these cases, the government’s political will to meet the NDC’s power sector target and to promote the solar PV industry will be critical in designing future power sector policies.

Key policy insights

• Model results show coal as the cheapest resource for electricity generation in Botswana up to 2030, but the cost competitiveness of solar photovoltaic (PV) against coal will continue to increase over time.

• It is economically and socially beneficial to adjust the current national plan and substitute some share of coal with solar PV in the future energy mix.

• Government support is critical in achieving the power sector’s NDC target, as cost reduction of solar PV alone does not guarantee success.

• Encouraging independent power producers (IPP) with financial support mechanisms would be a suitable business model for developing the renewable energy industry.

     

Environmental integrity of international carbon market mechanisms under the Paris Agreement

The Paris Agreement establishes provisions for using international carbon market mechanisms to achieve climate mitigation contributions. Environmental integrity is a key principle for using such mechanisms under the Agreement. This paper systematically identifies and categorizes issues and options to achieve environmental integrity, including how it could be defined, what influences it, and what approaches could mitigate environmental integrity risks. Here, environmental integrity is assumed to be ensured if the engagement in international transfers of carbon market units leads to the same or lower aggregated global emissions. Four factors are identified that influence environmental integrity: the accounting for international transfers; the quality of units generated, i.e. whether the mechanism ensures that the issuance or transfer of units leads to emission reductions in the transferring country; the ambition and scope of the mitigation target of the transferring country; and incentives or disincentives for future mitigation action, such as possible disincentives for transferring countries to define future mitigation targets less ambitiously or more narrowly in order to sell more units. It is recommended that policy-makers combine several approaches to address the significant risks to environmental integrity.

Key policy insights

• Robust accounting is a key prerequisite for ensuring environmental integrity. The diversity of nationally determined contributions is an important challenge, in particular for avoiding double counting and for ensuring that the accounting for international transfers is representative for the mitigation efforts by Parties over time.

• Unit quality can, in theory, be ensured through appropriate design of carbon market mechanisms; in practice, existing mechanisms face considerable challenges in ensuring unit quality. Unit quality could be promoted through guidance under Paris Agreement Article 6, and reporting and review under Article 13.

• The ambition and scope of mitigation targets is key for the incentive for transferring countries to ensure unit quality because countries with ambitious and economy-wide targets would have to compensate for any transfer of units that lack quality. Encouraging countries to adopt ambitious and economy-wide NDC targets would therefore facilitate achieving environmental integrity.

• Restricting transfers in instances of high environmental integrity risk – through eligibility criteria or limits – could complement these approaches.

     

Challenges to addressing non-CO2 greenhouse gases in China’s long-term climate strategy

Under the Paris Agreement, countries are encouraged to submit long-term low greenhouse gas emissions development strategies. Such strategies will merge emissions goals with socio-economic objectives and enable countries to increase their ambition over time, thus offering an opportunity to close the gap between the current emissions trajectory and the Agreement’s ‘well below 2°C’ target. China is in the process of preparing its own long-term strategy. We argue in this article that non-CO₂ greenhouse gases (NCGGs) should be an essential component of China’s long-term low-emissions strategy. To incorporate NCGGs into China’s long-term low-emissions development strategy, key scientific and institutional challenges should be addressed, such as uncertainty about the accuracy of NCGG emissions inventories; uncertainty about future projections of NCGG emissions; and institutional coordination deficits and imbalanced policy approaches. Overcoming these barriers will have significant implications for climate change mitigation and can open a path for the development of concrete follow-up actions.

Key policy insights

• Non-CO₂ greenhouse gases (NCGGs) make up around 17% of China’s GHG emissions, but China has no quantified target to limit or reduce these gases.

• NCGG emissions mitigation should be an essential component of China's long-term low-emissions strategy, which is currently under development.

• Considerable uncertainty exists over both historical NCGG emissions data and forecasts. This poses challenges to developing a comprehensive multi-gas strategy.

• Institutional challenges must also be addressed, such as fragmentation of responsibility for NCGGs.

     

《巴黎协定》下市场机制建设中的风险与对策

《巴黎协定》（《协定》）第6条设立了合作方法和可持续发展机制两种市场机制。受国家自主贡献（NDC）减排目标多样性和未来减排努力不确定性等因素的影响,《协定》下市场机制在设计和实施中面临着巨大的风险和挑战,主要包括缺乏稳健的核算规则、不恰当的额外性评估带来的环境完整性风险以及经济激励下缔约方不积极扩大减排目标覆盖范围、提高减排行动力度的风险。为了降低风险给全球减排行动可能带来的负面影响,必须建立稳健的核算规则,在额外性评估中合理考虑东道国NDC下的减排承诺,并通过设立参与资质要求等方式确保市场机制促进缔约方扩大减排目标覆盖范围。建议中国结合国内碳市场的发展现状,从识别《协定》下市场机制对我国的要求和影响、进行相关能力建设、设立严格的监管措施和建立所需机构等方面入手,为我国有效参与做好充分准备。     

Swimming upstream: addressing fossil fuel supply under the UNFCCC

Reducing fossil fuel supply is necessary to meet the Paris Agreement goal to keep warming ‘well below 2°C’, yet the Agreement is silent on the topic of fossil fuels. This article outlines reasons why it is important that Parties to the Agreement find ways to more explicitly address the phasing out of fossil fuel production under the UNFCCC. It describes how countries aiming to keep fossil fuel supply in line with Paris goals could articulate and report their actions within the current architecture of the Agreement. It also outlines specific mechanisms of the Paris Agreement through which issues related to the curtailment of fossil fuel supply can be addressed. Mapping out a transition away from fossil fuels – and facilitating this transition under the auspices of the UNFCCC process – can enhance the ambition and effectiveness of national and international climate mitigation efforts.

Key policy insights

• The international commitment to limit global average temperature increases to ‘well below 2°C’ provides a strong rationale for Parties to the Paris Agreement and the UNFCCC to pursue a phase-down in fossil fuel production, not just consumption.

• Several countries have already made commitments to address fossil fuel supply, by agreeing to phase down coal or oil exploration and production.

• Integrating these commitments into the UNFCCC process would link them to global climate goals, and ensure they form part of a broader global effort to transition away from fossil fuels.

• The Paris Agreement provides a number of new opportunities for Parties to address fossil fuel production.

     

Social impacts of climate change mitigation policies and their implications for inequality

The Paris Agreement and the Sustainable Development Goals (SDGs) set ambitious targets for environmental, economic and social progress. Climate change mitigation policies play a central role in this process. To maximize the benefits and minimize the negative effects of climate change mitigation policies, policymakers need to be aware of the indirect and often complex social and inequality impacts that these policies may have and the pathways through which these impacts emerge. Better understanding of the distributional and inequality impacts is important to avoid negative social and distributional outcomes as countries ratchet up their climate policy ambition in the post-Paris context. This paper synthesizes evidence from the existing literature on social co-impacts of climate change mitigation policy and their implications for inequality. The analysis shows that most policies are linked to both co-benefits and adverse side-effects, and can compound or lessen inequalities depending on contextual factors, policy design and policy implementation. The risk of negative outcomes is greater in contexts characterized by high levels of poverty, corruption and economic and social inequalities, and where limited action is taken to identify and mitigate potentially adverse side-effects.

Key policy insights

• The risk of adverse social outcomes associated with climate change mitigation policies, including worsening inequality, increases as countries ratchet up their ambition to meet the Paris Agreement targets. Many policies that have so far only been piloted will need to be up-scaled.

• Negative inequality impacts of climate policies can be mitigated (and possibly even prevented), but this requires conscious effort, careful planning and multi-stakeholder engagement. Best results can be achieved when potential inequality impacts are taken into consideration in all stages of policy making, including policy planning, development and implementation.

• Climate change mitigation policies should take a pro-poor approach that, in best case scenarios, can also lead to a reduction of existing inequalities.

     

Combining low-carbon economic development and oil exploration in Brazil? An energy–economy assessment

Brazil's nationally determined contribution (NDC) pledged under the Paris Agreement has marked a new stage in its climate policy towards strengthening low-carbon economic development beyond the recent drastic cuts in emissions from deforestation. Brazil especially means to limit oil consumption driven by future economic growth and to increase energy efficiency and biofuel use in the transport sector. On the other hand, Brazil still aspires to become a major petroleum province given its huge reserves of ‘pre-salt’ oil. This article aims to clarify under what conditions low-carbon economic development and oil exploration can possibly be combined in Brazil and what would be the energy system, environmental and macroeconomic implications of enabling policies for doing so. To address these questions, an energy–economy computable general equilibrium (CGE) model of the Brazilian economy is used to simulate alternative scenarios up to 2030. The results first show that implementing the most recent energy plans, which take into account the new economic reality in Brazil, should lead to over 20% lower domestic CO₂ emissions in 2030 than the indicative NDC target, and to the export of the bulk of newfound crude oil. Second, with the same level of oil production, deeper domestic decarbonization, triggered by additional carbon pricing and sustainable efficiency measures, appears achievable with very small gross domestic product (GDP) loss and maximum oil exports, while being aligned with a 2°C emission pathway. However, (i) extra oil exports may induce net additional emissions outside Brazil and be seen as a perverse incentive and (ii) the economic growth strategy based on high oil exports may hinder the necessary diversification of the Brazilian economy.

Key policy insights

• Low-carbon development goals will strongly interact with oil policy in Brazil.

• The 2030 NDC target should be easy to achieve considering the new economic reality in Brazil.

• Deeper domestic decarbonization is achievable with very limited GDP loss and significant oil exports, while being aligned with a 2°C emission pathway.

• A broad strategic vision is needed to reconcile climate policy, energy policy and other economic development objectives.

     

What future for the voluntary carbon offset market after Paris? An explorative study based on the Discursive Agency Approach

The Paris Agreement heralds a new era in international climate governance. Yet, the Agreement's implementation rulebook is still under negotiation. During this transition, from the Kyoto Protocol to the new regime under the Paris Agreement, many non-state actors are facing a high level of uncertainty. In particular, actors in the voluntary carbon market are struggling to define their new role. The business model of producing carbon credits in developing countries and selling them elsewhere is threatened. Although its financial significance and achieved emission reductions are limited, the voluntary market's role as an incubator for innovation has made it a prominent representative of non-state mitigation mechanisms. Therefore, we ask: What effects will the regime change to the Paris Agreement have on the voluntary carbon offset market (VCM) and how does it react to these effects?

This study analyses perceptions of, and reactions to, the new regulatory environment within the VCM. We apply the Discursive Agency Approach to scrutinize the institutions, discourses and influential agents involved in the VCM, and the strategic practices they apply to manage the transition towards the Paris regime. We find two dominant coping strategies: to align the voluntary offsetting mechanism with the Paris Agreement, and to re-invent its overall purpose as a tool to deliver sustainable development rather than solely emission reductions. Based on these results, we outline ‘thought spaces’ for a future VCM: (1) voluntary and non-party offsetting beyond nationally determined contributions (NDCs), (2) results-based financing for emission reductions and sustainable development, and (3) private climate action under international oversight.

Key policy insights

• The Paris Agreement threatens the VCM's business model, prompting market agents to frame and legitimize their work in new ways.

• The voluntary market's viability depends on the future accounting rules for emission reductions under Paris Agreement Article 6. Discursive struggles surround the risks of double counting and NDC ambitions.

• Based on an understanding of the past, we can draw lessons from agents’ attempts to re-legitimize their role under the new Paris Agreement; their future visions will shape the debates about this nascent regime.

     

Alignment between nationally determined contributions and the sustainable development goals for West Africa

The UN Sustainable Development Goals (SDGs) and the 2015 Paris Agreement are two of the most important policy frameworks of the twenty-first century. However, the alignment of national commitments linked to them has not yet been analysed for West African states. Such analyses are vital to avoid perverse outcomes if states assess targets and develop SDG implementation plans, and Nationally Determined Contributions (NDC) under the Paris Agreement, without integrated planning and cross-sectoral alignment. This article provides a situation analysis guided by the following questions: (a) Which priority sectors are mentioned in relation to adaptation and mitigation in West African NDCs? (b) Are the NDCs of West African states well aligned with the SDGs? (c) What are the co-benefits of NDCs in contributing towards the SDGs? and (d) How are West African states planning to finance actions in their NDCs? The study uses iterative content analysis to explore key themes for adaptation and mitigation within NDCs of 11 West African states and their alignment to selected SDGs. A national multi-stakeholder workshop was held in Ghana to examine the co-benefits of the NDCs in contributing towards the SDGs and their implementation challenges. Results show that agriculture and energy are priority sectors where NDCs have pledged significant commitments. The analysis displays good alignment between mitigation and adaptation actions proposed in NDCs and the SDGs. These represent opportunities that can be harnessed through integration into national sectoral policies. However, cross-sectoral discussions in Ghana identify significant challenges relating to institutional capacity, a lack of coordination among institutions and agencies, and insufficient resources in moving towards integrated implementation of national planning priorities to address successfully both NDC priorities and the SDGs.

Key policy insights

• Positive alignments between West African NDCs and SDGs present opportunities for mutual benefits that can advance national development via a more climate resilient pathway.

• NDCs of West African states can provide mutual benefits across the water–energy–food nexus, such as through climate-smart agriculture and low carbon energy technologies.

• Ghanaian multi-sectoral insights show the need to empower national coordinating bodies to overcome misalignments across different sectors.

     

United States non-cooperation and the Paris agreement

In June 2017, the Trump administration decided to withdraw the US from the Paris Agreement, a landmark climate agreement adopted in 2015 by 195 nations. The exit of the US has not just raised concern that the US will miss its domestic emission reduction targets, but also that other parties to the Paris Agreement might backtrack on their initial pledges regarding emission reductions or financial contributions. Here we assess the magnitude of the threat that US non-cooperation poses to the Paris Agreement from an international relations perspective. We argue that US non-cooperation does not fundamentally alter US emissions, which are unlikely to rise even in the absence of new federal climate policies. Nor does it undermine nationally determined contributions under pledge and review, as the Paris Agreement has introduced a new logic of domestically driven climate policies and the cost of low-carbon technologies keeps falling. However, US non-participation in raising climate finance could raise high barriers to global climate cooperation in the future. Political strategies to mitigate these threats include direct engagement by climate leaders such as the European Union with key emerging economies, notably China and India, and domestic climate policies that furnish benefits to traditional opponents of ambitious climate policy.

Key policy insights

• US non-cooperation need not be a major threat to pledge and review under the Paris Agreement.

• US non-cooperation is a serious threat to climate finance.

• Deeper engagement with emerging economies offers new opportunities for global climate policy.

     

Baseline,leakage and measurement issues: how do forestry and energy projects compare?

Abstract

This paper examines three issues in quantifying project-level emissions reductions (ERs): baseline and additionality determination, leakage assessment, and measurement of net emissions. It finds no systematic differences between land use change and forestry (LUCF) and energy projects in addressing these issues. Rather, the ease of quantification depends on the following:

• ?The level and distribution of direct financial benefits that result from the project, since this is a key determinant of additionality.

• ?The degree to which the project is integrated with a broader physical and economic system, since this determines the amount of leakage.

• ?The internal homogeneity and geographic dispersion of the project components—a key determinant of measurement costs.

These dimensions cut across the energy versus LUCF distinction.     

National contributions to climate change mitigation from agriculture: allocating a global target

Globally, agriculture and related land use change contributed about 17% of the world’s anthropogenic GHG emissions in 2010 (8.4 GtCO₂e yr^?1), making GHG mitigation in the agriculture sector critical to meeting the Paris Agreement’s 2°C goal. This article proposes a range of country-level targets for mitigation of agricultural emissions by allocating a global target according to five approaches to effort-sharing for climate change mitigation: responsibility, capability, equality, responsibility-capability-need and equal cumulative per capita emissions. Allocating mitigation targets according to responsibility for total historical emissions or capability to mitigate assigned large targets for agricultural emission reductions to North America, Europe and China. Targets based on responsibility for historical agricultural emissions resulted in a relatively even distribution of targets among countries and regions. Meanwhile, targets based on equal future agricultural emissions per capita or equal per capita cumulative emissions assigned very large mitigation targets to countries with large agricultural economies, while allowing some densely populated countries to increase agricultural emissions. There is no single ‘correct’ framework for allocating a global mitigation goal. Instead, using these approaches as a set provides a transparent, scientific basis for countries to inform and help assess the significance of their commitments to reducing emissions from the agriculture sector.

Key policy insights

• Meeting the Paris Agreement 2°C goal will require global mitigation of agricultural non-CO₂ emissions of approximately 1 GtCO₂e yr^?1 by 2030.

• Allocating this 1 GtCO₂e yr^?1 according to various effort-sharing approaches, it is found that countries will need to mitigate agricultural business-as-usual emissions in 2030 by a median of 10%. Targets vary widely with criteria used for allocation.

• The targets calculated here are in line with the ambition of the few countries (primarily in Africa) that included mitigation targets for the agriculture sector in their (Intended) Nationally Determined Contributions.

• For agriculture to contribute to meeting the 2°C or 1.5°C targets, countries will need to be ambitious in pursuing emission reductions. Technology development and transfer will be particularly important.

     

The global impacts of US climate policy: a model simulation using GCAM-TU and MAGICC

To assess the potential impacts of the US withdrawal from the Paris Agreement, this study applied GCAM-TU (an updated version of the Global Change Assessment Model) to simulate global and regional emission pathways of energy-related CO₂, which show that US emissions in 2100 would reduce to ?2.4?Gt, ?0.7?Gt and ?0.2?Gt under scenarios of RCP2.6, RCP3.7 and RCP4.5, respectively. Two unfavourable policy scenarios were designed, assuming a temporary delay and a complete stop for US mitigation actions after 2015. Simulations by the Model for the Assessment of Greenhouse-gas Induced Climate Change (MAGICC) indicate that the temperature increase by 2100 would rise by 0.081°C–0.161°C compared to the three original RCPs (Representative Concentration Pathways) if US emissions were kept at their 2015 levels until 2100. The probability of staying below 2°C would decrease by 6–9% even if the US resumes mitigation efforts for achieving its Nationally Determined Contribution (NDC) target after 2025. It is estimated by GCAM-TU that, without US participation, increased reduction efforts are required for the rest of the world, including developing countries, in order to achieve the 2°C goal, resulting in 18% higher global cumulative mitigation costs from 2015 to 2100.

Key policy insights

• President Trump’s climate policies, including planned withdrawal from the Paris Agreement, cast a shadow on international climate actions, and would lower the likelihood of achieving the 2°C target.

• To meet the 2°C target without the US means increased reduction efforts and mitigation costs for the rest of the world, and considerable economic burdens for major developing areas.

• Active state-, city- and enterprise-level powers should be supported to keep the emission reduction gap from further widening even with reduced mitigation efforts from the US federal government.

     

When less is more: limits to international transfers under Article 6 of the Paris Agreement

International carbon markets can be an important tool in achieving countries’ mitigation targets under the Paris Agreement, but they are subject to a number of environmental integrity risks. An important risk is that some countries have mitigation targets that correspond to higher levels of emissions than independent projections of their likely emissions. If such ‘hot air’ can be transferred to other countries, it could increase aggregated emissions and create a perverse incentive for countries not to enhance the ambition of future mitigation targets. Limits to international transfers of mitigation outcomes have been proposed to address this risk. This article proposes a typology for such limits, explores key design options, and tests different types of limits in the context of 15 countries. Our analysis indicates that limits to international transfers could, if designed appropriately, prevent most of the hot air contained in current mitigation targets from being transferred, but also involve trade-offs between different policy objectives. Given the risks from international transfer of hot air and the uncertainty over whether other approaches will be effective in ensuring environmental integrity, we recommend that countries take a cautious approach and pursue a portfolio of approaches to ensure environmental integrity, in which case limits could provide for additional safeguards.

Key policy insights

• Limits to international transfers involve trade-offs between different policy objectives, in particular reducing the risk that countries transfer hot air and enabling participation in carbon markets.

• Under ‘relative’ limits a country may transfer mitigation outcomes to the extent that its actual emissions are below the limit. Relative limits derived from historical emissions data have significant limitations, and none of the tested approaches was found to be effective for all countries. Relative limits based on emission projections could be a more valid approach, although they are also technically and politically challenging.

• Under ‘absolute’ limits a country could only issue, transfer or acquire a certain amount of mitigation outcomes. Absolute limits set at sufficiently low levels could prevent countries from transferring large amounts of hot air, but are bluntly applicable to all countries, whether or not they have hot air.

     

Health co-benefits and the development of climate change mitigation policies in the European Union

The 2015 Paris Agreement requires increasingly ambitious emissions reduction efforts from its member countries. Accounting for ancillary positive health outcomes (health co-benefits) that result from implementing climate change mitigation policies can provide Parties to the Paris Agreement with a sound rationale for introducing stronger mitigation strategies. Despite this recognition, a knowledge gap exists on the role of health co-benefits in the development of climate change mitigation policies. To address this gap, the case study presented here investigates the role of health co-benefits in the development of European Union (EU) climate change mitigation policies through analysis and consideration of semi-structured interview data, government documents, journal articles and media releases. We find that while health co-benefits are an explicit consideration in the development of EU climate change mitigation policies, their influence on final policy outcomes has been limited. Our analysis suggests that whilst health co-benefits are a key driver of air pollution mitigation policies, climate mitigation policies are primarily driven by other factors, including economic costs and energy implications.

Key policy insights

• Health co-benefits are quantified and monetized as part of the development of EU climate change mitigation policies but their influence on the final policies agreed upon is limited.

• Barriers, such as the immediate economic costs associated with climate action, inhibit the influence of health co-benefits on the development of mitigation policies.

• Health co-benefits primarily drive the development of EU air pollution mitigation policies.

• The separation of responsibility for GHG and non-GHG emissions across Directorate Generals has decoupled climate change and air pollution mitigation policies, with consequences for the integration of health co-benefits in climate policy.

     

The impact of the US retreat from the Paris Agreement: Kyoto revisited?

The United States’ decision to withdraw from the Paris Agreement (pending possible re-engagement under different terms) may have significant ramifications for international climate policy, but the implications of this decision remain contested. This commentary illustrates how comparative analysis of US participation in multilateral environmental agreements can inform predictions and future assessments of the decision. We compare and contrast US non-participation in the Kyoto Protocol and the Paris Agreement, focusing on four key areas that may condition the influence of US treaty decisions on international climate policy: (i) global momentum on climate change mitigation; (ii) the possibility of US non-participation giving rise to alternative forms of international collaboration on climate policy; (iii) the timing and circumstances of the US decision to exit; and (iv) the influence of treaty design on countries’ incentives to participate and comply. We find that differences across the two treaties relating to the first three factors are more likely to reduce the negative ramifications of US withdrawal from the Paris Agreement compared to the Kyoto Protocol. However, the increased urgency of deep decarbonization renders US non-participation a major concern despite its declining share of global emissions. Moreover, key design features of the Paris Agreement suggest that other countries may react to the US decision by scaling back their levels of ambition and compliance, even if they remain in the Agreement.

Key policy insights

• Increasing global momentum on mitigation since 1997 means that US withdrawal from the Paris Agreement is potentially less damaging than its non-participation in the Kyoto Protocol

• Despite the declining US share of global emissions, greater urgency of deep decarbonization means that the non-participation of a major player, such as the US, remains problematic for global cooperation and achieving the Paris Agreement’s goals

• Differences in the design of the Kyoto Protocol and Paris Agreement suggest that US non-participation is more likely to prompt reluctant countries to stay within the Paris framework but reduce levels of ambition and compliance, rather than exit the Agreement altogether