In Bonn, countries will continue negotiating if and how new carbon markets and their units should be approved both under the Framework for Various Approaches (FVA) and through the New Market Mechanism (NMM). We highlight some of the most pertinent issues that are still to be resolved.
At COP 18 in Doha, Parties did not get very far in agreeing on the details for establishing a new market mechanism (NMM) and a Framework for Various Approaches (FVA). The Doha decision includes establishing a work programme under the Subsidiary Body for Scientific and Technological Advice (SBSTA) for the FVA and the NMM. The FVA work program is supposed to:
- address the purpose of the framework,
- develop the scope of approaches to be included under the framework (e.g. market based and/or non-market based);
- develop a set of criteria and procedures to ensure the environmental integrity;
- develop technical specifications to avoid double counting and
- agree on the institutional arrangements for the framework.
The Doha decision text on the NMM is slightly more detailed than that on the FVA and includes a number of important elements, such as:
- Operation under the guidance and authority of the COP;
- Standards that deliver real, permanent, additional, and verified mitigation outcomes, avoid double counting of effort and achieve a net decrease and/or avoidance of greenhouse gas emissions;
- Requirements for the accurate measurement, reporting and verification of emission reductions, emission removals and/or avoided emissions;
- Criteria for the accurate and consistent recording and tracking of units;
- The promotion of sustainable development;
Below we summarize Carbon Market Watch’s key recommendations to help ensure the environmental integrity of new markets eligible under the UNFCCC. For detailed information about these recommendations, see our Carbon Market Watch recommendations for SB38, June 2013.
Ensure Robust Governance structure
- Appoint a UN body as a standards-setting organization and have all unit approved by this international body.
- Fully account credits through a rigorous, robust and transparent common accounting framework.
- Ensure that the appeals procedure is swiftly implemented and provides for broad legal standing.
Avoid double counting
- Use a common international transaction tracking mechanism for all offsets counted towards pledge attainment, with assignment of unique serial numbers to each ton transacted or registered;
- Establish clear and specific rules regarding the complementary relationship between CDM, NMM and other regional trading mechanisms;
- Establish rules to ensure that offsets are only counted by the buyer and not by the seller
- Ensure that financial flows are only counted once
Secure net atmospheric benefits
- Adopt accounting rules for FVA and NMM that clarify and ensure that under both mechanisms, a net atmospheric benefit has to be achieved.
Uphold human rights