Climate and Energy

Latin American Regional Knowledge Sharing Workshop on
International Market Mechanisms and Transparency under Paris Agreement

Article 6 of the Paris Agreement (PA) provides the opportunity for Parties to participate in international market mechanisms. At the same time, the PA’s Article 13 mandates each Party to regularly provide information on progress made in implementing and achieving its NDC. Therefore, going forward, it is necessary to enhance the readiness of countries for transparently reporting, including the use of international market mechanisms. With the support of the Ministry of the Environment, Japan (MOEJ), IGES in collaboration with the Independent Association of Latin America and the Caribbean (AILAC) organised the “Latin American Regional Knowledge Sharing Workshop on International Market Mechanisms and Transparency under Paris Agreement” on 23-24 July 2018 in Bogota, Colombia. Policymakers and negotiators from eight Latin American countries (Chile, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico and Peru) and other invited experts shared their understanding of and interest in reporting on the use of international market mechanisms, including avoidance of double counting. Participants also discussed common challenges and the way forward.

Date 23-24 July 2018
Venue Holiday Inn Express & Suites
Carrera 7 #67-39, Bogotá, Colombia
Organisers Institute for Global Environmental Strategies (IGES)
The Independent Association of Latin America and the Caribbean (AILAC)
Supporter Ministry of the Environment Japan
Language English
Number of participants 25
Agenda PDF(200KB)
Summary

After each country had given a presentation on its own experience, there were inputs from experts, findings were shared on existing practices of country reporting from IGES, and intensive discussions were conducted through group exercises. The following key findings and possible inputs to UNFCCC process were identified related to robust accounting under Article 6 and the modalities, procedures and guidelines (MPG) of the enhanced transparency framework (ETF) under Article 13.

  1. Some countries are struggling to report the most recent National GHG Inventories on a biennial basis, and some countries are already reporting using data from the previous three or four years (X-3 or X-4), and others are on track to do so. Some participants stated that their countries will be prepared to biennially report National GHG Inventories with data from two years previously (X-2) from 2022.
  2. All countries have built institutional arrangements for the formulation of climate policies and actions including preparation of NDCs. Under these institutional arrangements, countries are at the preparatory stage for implementing NDCs including setting up systems for reporting and tracking with the aim to report under the ETF. In preparation for robust accounting, countries will benefit from long-term strategies on how market mechanisms outcomes will be used towards the achievement of NDCs.
  3. Participants agreed on the importance of avoiding double counting. In applying arrangements for robust accounting including avoidance of double counting, information on emission reduction projects under international market mechanisms is needed. This necessary information, such as amount and timing of credits transferred internationally and used by other countries, is not always available under the current arrangements of the Kyoto Protocol, though such information is usually tracked and exists in registry systems.
  4. It is crucial to take advantage of the experiences gained by countries through the use of existing international market mechanisms for the design and arrangements on reporting the use of new market mechanisms. Progress had been reached by some countries in implementing MRV systems and tracking the use of international market mechanisms including using new technologies, and this generated interest in finding effective ways to share information, exchange experiences and develop regional cooperation.

Possible inputs to UNFCCC process:

  • Robust accounting:
    In order to ensure that robust accounting works, it is vital to not only track information but also report that information in a transparent manner. Therefore, in addition to developing an information tracking system, arrangements should be developed internationally for reporting information from countries involved in international market mechanisms and administrators of mechanisms, e.g. using a common format. IGES proposed a draft format, which could be used to compile information at the national level as well as for country reporting to the UNFCCC in the context of the Paris Agreement, and this proposal helped enlighten the challenge ahead for enhancing and integrating reports on the use of international market mechanisms to the overall reporting of Parties.
  • Transparency framework:
    Systems have to be created whereby developing countries can improve their transparency and capacity to report over time. Under the system, it is important that developing countries can repeat the process of submitting national reports and receiving reviews on those submitted reports frequently, so that they become familiar with the process and improve subsequent reports related to countries’ NDCs. Countries highlighted the need for future discussions to prioritise the guidance for Article 6 and the MPG.
  • Identifying and reporting needs:
    Countries have done quite well in reporting financial support, but challenges were identified in keeping consistency with the currency in which support needed and received is reported and in differentiating 'climate support' and support from other types of cooperation. Guidance under the ETF should cover more details of the approaches for identifying and reporting capacity-building needs and support received. This can help not only to enhance transparency of capacity-building status, but also to ensure coherence between the assessing and reporting of support needed and received with the NDCs goals and long-term goals set out by each country.

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