It’s all in the numbers

One of the noteworthy features of the 160+ nationally determined contributions (NDC) submitted to the UNFCCC following the adoption (and now ratification) of the Paris Agreement, is that no two are alike. True to the Paris Agreement, countries have submitted a description of their contribution, with most offering some indication of the emissions outcome, but the way this information is transmitted varies considerably by country.

In May 2016, the UNFCCC released a synthesis report of the NDCs, aggregating them in the only way that makes sense given the nature of climate issue, by cumulative emissions. Every NDC was turned into a cumulative carbon release to the atmosphere (i.e. quantification), which were then summed and compared to the ideal global carbon budget for a ‘well below 2°C’ pathway. Needless to say, the UNFCCC analysts almost certainly had to make numerous assumptions to do the calculations.

The problem that confronted the analysts was that not one of the NDCs was presented in the format they needed. Many offered an end goal in 2025 or 2030, such as the EU which is targeting a 40% reduction by 2030 against a 1990 baseline. Baseline years also vary across the NDCs. In most NDCs, little to nothing is said about what happens in the intervening years, so an assumption must be made about the likely trajectory. Others were presented as an expected reduction against a notional future emissions trajectory and some were presented without any emissions trajectory at all.

The variation in NDCs is now a well-known story, but the lack of quantification of NDCs has other implications which extend past the obvious analysis of the environmental outcome. It also limits the ability for carbon trade between the NDCs and potentially runs up against the accounting provisions of the Paris Agreement.

Those accounting provisions are dotted throughout the Agreement, but Article 4.13 is perhaps the most comprehensive. It states;

Parties shall account for their nationally determined contributions. In accounting for anthropogenic emissions and removals corresponding to their nationally determined contributions, Parties shall promote environmental integrity, transparency, accuracy, completeness, comparability and consistency, and ensure the avoidance of double counting, in accordance with guidance adopted by the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement.

The above could be interpreted as a post-NDC (i.e. after the period for which the NDC applies) true-up of emissions, but even that requires summing all the emissions across all the years of the NDC, not just ticking off actions against a list or noting that emissions in the final year were as expected. Unless cumulative emissions are established for the whole period of the NDC, the environmental integrity of the NDC is questionable as it is cumulative emissions that determine the environmental outcome. Only a full assessment of the NDC in terms of cumulative emissions meets the other requirements of completeness, accuracy and comparability.

Further, post-NDC quantification of emissions is unlikely to be sufficient for trading purposes, or in the language of the Paris Agreement, internationally transferred mitigation outcomes. This is because transfers out of a country require a local corresponding adjustment. While this could also be done post-NDC, it should be done at the time of the transfer such that the country can determine the new trajectory it needs to be on and ensure policy measures are suitably modified to ensure compliance, particularly if transfers are large compared to national emissions (say, more than 5%). Of course, if both countries were operating economy wide cap-and trade systems the correction would be automatic, but that is hardly the case today.

The above makes quantification of NDCs an important and perhaps necessary step for the Paris Agreement, but agreement on this by the Parties appears to be distant. However, such a step is inevitable. As countries get closer to declaring full emissions compliance with the Paris Agreement, i.e. achieving net-zero emissions (NZE) or ‘a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases’ in the words of the Agreement itself, quantification becomes essential.

NZE will occur when the country in question has balanced the remaining emissions with sinks and there will likely be some remaining emissions well into the 22nd century. Those sinks will either be developed locally or purchased internationally via the transfer provision of Article 6. But both the buyer and seller of such sinks will have to implement careful accounting to ensure the integrity of the net-zero claim. This takes us back to the quantification discussion.

The Paris Agreement is rigorous in concept and the negotiators of 2015 should be commended for the thoughtfulness of their text. But as the delivery of the Paris ‘rulebook’ approaches, that same rigor does not yet appear to have the full backing of all the Parties.