1. Accounting of Units: Pre-target Year Units,
Single Year Targets, Double Counting:
Issues and Options
Climate Change Expert Group Global Forum (CCXG)
Paris, 18-19 March 2014
Lambert Schneider – lambertschneider@googlemail.com

2. Content
1. Accounting of pre-target year units
– Accounting of units from early pre-2020 mitigation action in
a post-2020 climate regime: what are the implications?
2. Single year targets
– 2020 mitigation pledges under the UNFCCC: what are the
implications of using units towards these pledges?
3. Double counting
– How can double issuance and double claiming be
addressed?

3. Accounting of pre-target year units (1)
Target achievement without pre-target year units

4. Accounting of pre-target year units (2)
Target achievement with accounting of pre-target year units

5. Accounting of pre-target year units (3)
Target achievement with accounting of pre-target year units

6. Accounting of pre-target year units (4) -
Conclusions
• With given mitigation pledges, using pre-target year
units to achieve targets does NOT increase mitigation
ambition but leads to:
– Higher cumulative GHG emissions, OR
– At best: the same cumulative GHG emissions
• Using pre-target year units is only effective if
– Units are cancelled, i.e. not accounted towards any target
achievement (including KP targets); OR
– The ambition of 2020 / post-2020 targets is enhanced due
to possibility for accounting units from early action

7. Single-year targets (1)
Target compliance relying wholly on transferable units: Multi-year

8. Single-year targets (2)
Target compliance relying wholly on transferable units: Single-year

9. Single year targets (3) - Options
1. Same vintage of units and targets
– Allowance vintage does reflect when reductions occur
– Only works if all countries have the same target time frame
and do not bank units: restricts emissions trading
2. Limit on the number of units
– Only reduces but does not address the issue
3. Translate single-year targets in a multi-year path in
order to allow the use of units
– Fully addresses the issue
4. Translate the number of units in the target year into a
multi-year path for unit use in prior years
– Could address the issue of unit use, but could result in
higher cumulative emissions than multi-year targets

10. Single-year targets (4)
Option 4: Single-year targets with a multi-year unit path

11. Single-year targets (5) - Conclusions
• Targets in a post-2020 climate regime should be
continuous, multi-year targets
– Greater comparability and certainty of cumulative emissions
– Less vulnerable to changes in climatic/economic conditions
– Compatible with carbon market instruments
• Options for single-year 2020 pledges:
– Option 3 (translation in a multi-year emissions path) is most
robust
– Option 4 (translation in a multiyear unit path) could be
considered as an alternative
– Other options do not seem practicable or robust

12. Double counting (1)
Is it necessary to “prevent” double counting?
• Considerable potential if units are used extensively
– For comparison: Europe achieved more than 50% of its
2008-2012 reduction under the KP with CERs and ERUs
• Consequences of not preventing double counting:
– Disincentive to use international carbon markets
– Comparability of pledges
– Credibility of the climate regime
– Increased global GHG abatement costs
• Quantifying double counting ex-post can be difficult
• Adjustment of pledges to “compensate” double
counting likely?
=> Preventing double counting is important

13. Double counting (2) – Important findings
• Main potential: double issuance and double claiming
• Key challenges:
– Complexity due to many ways of double counting
– Coordination is required: Double counting likely if countries
and mechanisms use different approaches to address it
• But: it is possible to technically fix it!
• Addressing double counting requires:
– Accounting rules, AND
– Carbon market design rules, AND
– Tracking and recording rules
• Potential roles of the FVA:
– Establish common principles, rules or standards
– Define roles of host countries, mechanism operators, users
– International oversight of implementation

14. Double counting (3) –
What matters most to prevent double counting?
Important:
• Common accounting
framework for units
• Common principles for
the design of
mechanisms
• Common rules for
information attached
to units
• Procedures for
reporting, review, and
resolution of any non-
compliance
Less important:
• Whether units are issued
under national / bilateral /
multilateral governance
• Unit transfers:
– Domestic / bilateral /
multilateral governance
– One or several unit types
– One or several registries
– Use of ITL or other
oversight
– Tracking unit flows
between countries

15. Thank you for your attention!
The underlying research is commissioned by the Federal Office
for the Environment (FOEN) of Switzerland and will be published
in two forthcoming SEI working papers:
• Single-year mitigation targets: Uncharted territory for emissions
trading and unit transfers
http://www.sei-international.org/publications?pid=2487
• Addressing double counting of emission reductions under
UNFCCC
http://www.sei-international.org/publications?pid=24796
(available by the end of March 2014)
Lambert Schneider – lambertschneider@googlemail.com