全球商业气候联盟-扩大私营部门应对气候变化的行动

SCALINGUPPRIVATESECTORACTIONONCLIMATECHANGE

DEVELOPINGCORPORATEGREENHOUSEGAS(GHG)ACCOUNTINGGUIDANCETHATALIGNSWITHTHEPARISAGREEMENT

1INTRODUCTION

Theprivatesectorisakeyactorinthepursuitofglobalclimategoals.ToachievetheclimatetargetsdefinedintheParisAgreement,anestimated$8trillion,ormore,inannualclimatefinancemustbemobilizedby20301—asix-foldincreasefromthelevelsdeployedin2022.Tofillthisgap,privatecapitalmustplayapivotalrole,potentiallydeliveringatleast$2.61trillionperyear.2

Manycompanieshavesteppedup,butmuchmoreactionisneededfromtheprivatesector.Overhalfoftheworld›stop2,000publiclylistedcompanies,whichhaveacombinedannualrevenueexceeding$27trillion,havecommittedtonet-zerotargets.3Whiletheincreaseduptakeofclimatetargetsisa

promisingsign,justanestimated18%ofthesecompaniesarecurrently“on-track”toreachnet-zeroby2050.4Anddespitecompaniessignalingclearclimate-actioncommitments,growthincorporateclimatefinanceremainslackluster.

Since2018,thenumberofcompaniescommittedtotargetsundertheScience-basedTargetsInitiative(SBTI)hassurgedbymorethan500%,yetannualcorporateclimatefinancepaymentsinthissame

periodhaveincreasedbyjust5%,from$183billionto$192billionperyear.5,6Corporateclimate

investmentrepresentstheslowest-growingsegmentwithintheprivateclimatefinancesphere,trailingsignificantlybehindthethreefoldincreaseinspendingfromcommercialfinancialinstitutionsduringthesameperiod.

Oneprerequisiteforinvestmentconfidenceisclarityontherulesthatwillapplytotargetsetting,

trackingandachievement.Withminimalinternationalordomesticregulationofcorporateclimate

targetsinmuchoftheworld,thenon-governmentalcommunityhascreatedvoluntarysystemsand

governancebodiestoguidecompaniesonmeasuringemissions,establishingtargets,andmaking

claims.Thisarchitecture,whichencompassesSBTIfortargetvalidationandGHGProtocolguidance

foremissionsaccounting,iswidelyusedbycompaniesworldwide.Itisbecomingabenchmarkfor

emergingdisclosureregulations.Thesesystemshavebeendevelopedinparallelwithandlargely

independentofinternationalprocessesestablishedundertheParisAgreementtohelpcountries

implementandtrackprogresstowardtheirNationallyDeterminedContributions(NDC).Understandinghowthesevoluntarycorporateinventoryaccountingsystemsandtargetaccountingframeworksare

similartothenationalarchitecture,andhowtheydiffer,canhelpinformmorealignedandrobustsystemsgoingforward.

ThispaperexploreshowemissionsaccountingprinciplesandprocessesdevelopedundertheParisAgreementcanprovidelessonsforfurtherdevelopmentofthegreenhousegasaccountingand

voluntarytargetclaimssystemsusedbycompanies.Itposeskeyquestionsthatwillneedtobe

resolvedtoimproveaccountability,providecertaintyonhowprogressandachievementoftargetswillbeaccountedfor,,andfacilitatebroaderprivatesectorinvestment,includingthroughmarket-basedaccountingapproaches.

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/publication/global-landscape-of-climate-finance-2023/

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/research/state-climate-action-2022

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/analysis/new-analysis-half-of-worlds-largest-companies-are-committed-to-net-zero

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/us-en/insights/sustainability/reaching-net-zero-by-2050

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/publication/global-landscape-of-climate-finance-2019/

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/publication/global-landscape-of-climate-finance-2023/

SCALINGUPPRIVATESECTORACTIONONCLIMATECHANGE2

2LESSONS’S

UndertheParisAgreement,governmentshaveagreedontherulesandprocessesforhownationstatescommittoclimatechangetargets.Usingtheserules,anationstatecandemonstrateprogresstowardandachievementofitsNDCtargets,butretainsflexibilityonhowitsetsandmeetsthem.

Forexample,Article13oftheParisAgreementestablishesanenhancedtransparencyframework,

includingarequirementforcountriestoprovideaninventoryreportofemissions;andinformation

necessarytotrackprogresstowardsNDCs.AndArticle6oftheAgreementallowscountriesto

engageincooperativeapproaches,includinginternationalemissionstradinganduseofmarket-basedmechanisms,tohelpachievetheirNDCs.

Thesearticlesofferclarityonthepreparation,reporting,andreviewofphysicalGHGinventories,aswellashowtotrackprogresstowardtargets.Theyalsoillustratehowtologdatafrommarket-basedinstruments,suchasthetradingofemissionscreditsamongcountries.Reportingofmarket-based

cooperationmustbetransparentandisseparatefromtheemissionsinventory.

ImplementationguidanceandrulesoftheParisAgreementaddressboththeneedforrobustphysicalinventoriesandtheflexibilityrequiredtoincentivizeanddirectfinancetowardfasteranddeeper

reductionsinnationalGHGemissions,includingthroughtheuseofmarket-basedinstruments.The

goalistoupholdtheintegrityofphysicalGHGaccountingmethodsatanationallevel—through

nationalinventories—whileallowingforaseparateledgerthatrecognizesandaccountsformarket-basedapproachesinamannerthatpreventsdoublecounting.7Inessence,byseparatingthe

physicalinventoryfrom“performanceaccounting”,i.e.theuseofmarket-basedmechanisms,theParis

AgreementaddressestheissuethatasinglesetofaccountingmetricsisunlikelytoserveallthedesiredfunctionsofGHGreporting.8

Thiscontrastswithhowmostcompaniesperformgreenhousegasaccountingtoday.Manyprivate

actorsinterprettheGHGProtocolguidancetoadoptahybridapproachintegratingelementsof

physicalGHGaccounting(inventory)withperformanceGHGaccounting(marketmechanisms)underasingleaccountingquantity.9Forscope1,GHGProtocolrelieslargelyonallocationalmethodsof

physicalGHGaccounting,whilescope2allowsflexibilityforreportingonbothphysicallocation-

based(inventory)andmarket-based(performance)accounting,notablyforemissionsfrompurchasedelectricity.10Forscope3,companiesprimarilyrelyonestimationsbasedonacombinationofspend

dataandgenericemissionsfactorstodevelopaproxyforaphysicalinventory,alignedwithGHG

Protocol’sCorporateStandard.However,somecompaniesusemarket-basedandintervention-level

accounting(performance),outsideoftheGHGProtocol’sguidance,tomakeinventoryadjustmentswithminimaltransparency,limited(ifany)oversightandfewagreed-uponrulesormethodologies.11,12

7.Doublecountingoccurswhenthesameemissionreductionorremovalisclaimedbytwodifferentactors

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/2023/03/08/what-is-greenhouse-gas-accounting-fitting-to-purposes/

9.ibid

10.TheGHGProtocolCorporateStandardclassifiesacompany’sGHGemissionsintothree‘scopes’.Scope1emissionsaredirectemissionsfromownedorcontrolledsources.Scope2emissions

areindirectemissionsfromthegenerationofpurchasedenergy.Scope3emissionsareallindirectemissions(notincludedinscope2)thatoccurinthevaluechainofthereportingcompany,includingbothupstreamanddownstreamemissions.

11.TheGHGProtocolCorporateStandardneitherendorsesnorexplicitlyprohibitstheuseofmarket-basedaccountingforscopes1and3,leavingroomforinterpretationbycompaniesandtheirassuranceproviders

12.Formorecontextondifferentdefinitionsofaccountingapproachessee

/2023/03/01/what-is-greenhouse-gas-accounting-furnishing-definitions/

SCALINGUPPRIVATESECTORACTIONONCLIMATECHANGE

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Theexistingcorporatearchitecturehighlightskeydifferencesincontextbetweencountriesand

individualcompanies,particularlytheterritorialapproachtonationalemissionsinventories.Everythingemittedwithinacountry’sborderisequivalenttoscope1,andthereisnoscope2or3.WhilenotalllessonsfromtheParisAgreementarethereforedirectlyrelevanttothecorporateclimatearchitecture,certainbestpracticescanbegleanedtohelpcorporateclimatestakeholdersincreaseclarity,

transparency,anddataaccuracyintheirreporting.TheParisAgreementarchitectureandprocesses,andtheirpredecessorsfromtheKyotoProtocolandUnitedNationsFrameworkConventiononClimateChange(UNFCCC),provideusefulguidanceandlessonsforimprovingtherulesandgovernance

surroundingcorporategreenhousegasaccountingapproaches.

BASICSOFTHEPARISAGREEMENTARCHITECTURE

ThenatureofNDCmitigationundertheParisAgreementisstructuredaroundeachPartyadopting

aseriesofself-determinedfive-yearemissionstargets,witheachtargetmoreambitiousthanthelast.

NDCsfortheperiodto2030weresubmittedin2020(somein2021becauseoftheCOVID-19

pandemic)andnewNDCsforthe2031-35implementationperiodshouldbecommunicatedby2025.

EachNDCtargetisself-determined,buttheexpectationsetintheParisAgreementisthatallcountries“moveovertimetowardeconomy-wideemissionreductionorlimitationtargetsinthelightofdifferent

nationalcircumstances(Article4,paragraph4)”.However,aftertherecentGlobalStocktakeReport

foundthatglobalemissionsreductionsarewellofftrack,theUAEConsensus(agreedatCOP28)

reinforcedtheexpectationforallPartiestomovetoeconomy-wideemissionsreductiontargetscoveringallsectors,gasesandcategories(Decision1/CMA.5)

InadditiontofiveyearlyNDCs,partiessharelong-termemissiongoals,andthepathwaytobring

thosegoalstofruition,includinglow-emissiondevelopmentstrategies.Theseself-determinedlong-termtargets,whicharemostlynet-zerocommitmentsfor2050orlater,andsimilartocorporatenet-zero

targets,areanimportantanchorforPartiestosettheirsuccessiveNDCsinawaythatisconsistent

withtheoverallParisAgreementgoals.PartiesarerequiredtosetNDCs“withaviewtoachievingthepurposeofthisAgreementassetoutinArticle2”.

MostcurrentNDCshaveheadlinetargetsfor2030expressedasGHGquantities,whetherabsolute(e.g.,apercentagereductionofoverallemissionsonabaseyear)orrelative(e.g.,apercentage

reductioncomparedtobusinessasusualorreferencedtoGDPgrowth).However,somedevelopingcountrieshavecontinuedtousenon-GHGmetrics(suchasrenewablesshareorcommittedtocertainpoliciesandmeasures).

AlmostallcurrentNDCsareexpressedasasingle-yeartargetfor2030.Onlyahandfulofcountrieshaveputforwardanemissionsbudgetcoveringtheentireimplementationperiodto2030.

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BIENNIALREPORTINGANDREVIEW

TheParisAgreementaimstoprovidetransparencyofemissionstrendsandencouragePartiestostayontrackinachievingtheirNDCtargets.BuildingontheexperiencesoftwodecadesofUNFCCC

reporting,theParisAgreementcommitscountriestoauniversalEnhancedTransparencyFrameworkcenteredonabiennialcycleofregularreportingandreviewof:

1.Nationalinventories,whichcoverthephysicalemissionswithinthegeographicboundariesoftheParty(i.e.,similartoscope1ofacorporateinventory).

2.InformationtomonitorforwardmovementtowardtheNDCtargetthroughconsistent

trackingofprogressmetric(s)specifiedbytheParty.AccountingforNDCtargetsisdonethroughthisbiennialprocess;thereisnoseparatecompliancephase/processafterthetargetyear.

Importantly,whileinventoryreportingandtrackingprogresstowardtargetsarerelated,theyare

separateprocessesthateachbringuniquebenefits.RegardlessofthetypeofNDCthathasbeenset,thereisvalueinunderstandinghowunderlyingphysicalemissionsareevolvingineachjurisdiction

inamannerthatfollowstheUNFCCC’sTACCCprinciples(Transparency,Accuracy,Completeness,

Consistency,Comparability).Conversely,theprogressandachievementofNDCtargetscanbetrackedandmeasuredseparatelyfrominventoryemissions.Whiletherearecloseinterlinkages—forexample,thosePartiesexpressingNDCtargetsinGHGtermsuseinformationfromtheirinventoriesinNDC

tracking—theyareseparateprocesses.ThetransparencyprovidedbythisseparationpreventsPartiesfromconflatingperformanceachievedthroughmarketapproacheswithreductionsachieveddirectlyintheinventory.Italsoprovidesclarityonhoweachelementcontributestotargetattainment.

Acrossbothprocesses,theuseofagreed-uponandconsistentreportingformats,includingstandardizeddatatablesandelectronicdatasubmissions,canenhancetransparency.

NATIONALINVENTORIES

SincetheUNFCCCtookeffectin1994,developedcountrieshavebeenrequiredtosubmitnationalinventoriesofanthropogenicemissionsandremovals.Developingcountrieshavegraduallybeen

broughtintoinventoryreporting;theParisAgreementpresentedamajorshift,asallarePartiesarenowrequiredtoprovideanationalinventoryreporteverytwoyearsaspartoftheirBiennial

TransparencyReport.

Theinventoryprocessisfacilitative,providingimplementationsupportandflexibilityfordevelopingcountriesthatneeditinlightoftheirnationalcapacities.Itemphasizescontinuousimprovementofsuccessiveinventorysubmissionsbasedontechnicalexpertreview.

Eachnationalinventoryreportprovidesandupdatesafullhistoricaltime-seriesofannualinventory

data.Updatestothefulltime-seriesaremaderetroactivelyforanynewmethodologicalimprovementsorchangesinmetrics(e.g.,movingtoupdatedGlobalWarmingPotentials13).Thisprovidesconsistencybetweenhistoricalandcurrentdatatoensurebase-yearemissions,target-yearemissions,and

intermediateyearsduringtheimplementationperiodareexpressedconsistently.ItalsoimprovescomparabilitybetweendifferentParties’inventories.

13.GlobalWarmingPotential(GWP)referstohowmucheachgreenhousegasaffectsglobalwarming,definedbytheIPCCas“thecumulativeradiativeforcing,bothdirectandindirecteffects,overaspecifiedtimehorizonresultingfromtheemissionofaunitmassofgasrelatedtosomereferencegas”.Partieshaveagreedtousethe2006IPCCguidelinesfornationalinventories,andglobal

warmingpotentialsfromtheIPCC’sfifthassessmentreport.

SCALINGUPPRIVATESECTORACTIONONCLIMATECHANGE5

TheIntergovernmentalPanelonClimateChange(IPCC)setinventory-loggingguidance,which

providesfortechnicalcomparabilitythroughcommonmetricsandmethodologies,withflexibility

forreportingtiers.Thesetiersreflectincreasinglevelsofprecisionandspecificity,andcountriesare

encouragedtofocusontheirmostsignificantareasofemissionsforhigher-tierreporting.However,theabilitytoapplyhigher-tiermethodswilldependonacountry’sindividualcapabilities.

ThescopeofParisAgreementnationalinventoriesiscomparabletoscope1emissionsofcorporate

inventories:theycoverphysicalemissionsproducedwithintheterritorialboundariesofthecountry

(excludinginternationalaviationandshipping).Nationalinventorieshavenoequivalenttoscope3,orevenscope2,emissions.Forexample,ifelectricityisgeneratedinonecountryandusedinanother,theemissionsarereportedintheinventoryofthecountrywherethegeneration(andhencetheemissions)physicallyoccurred.

INFORMATIONTOTRACKPROGRESSINIMPLEMENTINGANDACHIEVINGNDCS

ThebiennialprocessforthereportingandreviewofprogresstowardNDCssetstheexpectationthatPartiesmakeongoingprogresstowardtheiremissionstargets.

Partiesreportanagreedsetofinformationeveryotheryear,includingviaastandardizedtable.

Trackingfocusesonindicator(s)whichareself-selectedbytheParty,relevanttotheirNDC.The

indicatorisnotnecessarilytheemissionslevelsfromthenationalinventory.Itcanalsobeametric

relevanttotheNDC,e.g.,megawattsofinstalledrenewablecapacityifacountry’sNDChasatargetformulatedinthoseterms.However,forPartieswithNDCtargetsandindicatorsbasedonGHGdata,biennialdatamustbeconsistentwiththeirgreenhousegasinventories.[4/CMA.1]

Ineverybiennialreportupdate,Partiesprovideafull-timeseriesoftheindicator(s)foreachyearfromthestartofimplementationtopresent,aswellasthebaseyearorreferencelevel,dependingonthetypeoftarget.ThedescriptionthePartyprovidedoftheirNDC(underArticle4)willhelpensurethisindicatordataprovidesvisibilityofhowthePartyistrackingtowarditstarget.

Attheendoftheimplementationperiod,eachPartyincludesinitsnextBiennialTransparencyReportinformationtoassesswhetherthePartyachievedistarget.

Furthermore,methodologicalconsistencyisrequiredonbaselines,scope,coverage,definitions,datasources,metrics,assumptionsandmethodologicalapproachestocreateaconsistentviewovertime.Avoidanceofdoublecounting—mentionedsixtimesintheParisAgreementanditsaccompanying

decision—isalsoafundamentalgoal.

BiennialTransparencyReportsaresubjecttotechnicalexpertreviewandapolitical-levelpeer-reviewprocess.

Inthiswork,therearenospecificcriteriaorbenchmarksforwhatconstitutesadequateprogressat

anypointintime.Thequestionofadequateprogressisapoliticalissueandpartofwidernegotiationsaboutrelativecontributionsofdifferentcountriesandtheconceptof“commonbutdifferentiated

responsibilities”thathasbeenattheheartoftheUNFCCCsinceitsfounding.

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ACCOUNTINGFORINTERNATIONALCOOPERATION(EMISSIONSTRADINGAND/OROTHERMARKETINSTRUMENTS)

Article6oftheParisAgreementallowsPartiestoengageinvoluntaryinternationalcooperationin

theimplementationofNDCs,includingthroughmarketapproachesviaInternationallyTransferred

MitigationOutcomes(ITMOs).Cooperationmust“promotesustainabledevelopmentandensure

environmentalintegrityandtransparency,includingingovernance,andshallapplyrobustaccountingtoensure,interalia,theavoidanceofdoublecounting.”(Article6.2)

TheagreedguidanceforArticle6implementation[2/CMA.3]definestCO2-eq(tonneofcarbon

dioxideortheequivalentvolumeofoneormoreothergreenhousegases)asthegeneralbasisof

measurementofITMOs.ThisguidanceletsPartieswithnon-GHGNDCtargetstradeinanon-GHG

metricthatisconsistentwiththeirNDCs.Forexample,tradeinRenewableElectricityCertificates(RECs)couldoccurbetweentwoPartieswithtargetsforRenewableElectricity,butRECswouldnotbeusedasITMOsbyPartieswithGHGtargets.

TwoimportantdataprerequisitesunderpintheParties’participation.First,Partiesmusthavesubmitted

anup-to-datenationalinventoryreportbecausetheprocessforaccountingforinternational

cooperationreliesona“correspondingadjustment”15fortransfers,viaan“emissionsbalance”thatisseparatefromtheinventorybutstartsfrominventoryemissionslevels.Theemissionsbalancereflectstheemissionsoutcomeinthatyearaftermarketmechanismsareconsidered(viathe“corresponding

adjustment”ofemissionslevels);itisusedastheannualindicatortotrackprogressinimplementationandachievementofanNDC.16Second,PartiesmustestablisharegistrytomanageITMOs,orelseusethedefaultregistryestablishedbytheUNFCCC,torecordITMOinformationwithuniqueidentifiers

includingtheoriginatingcooperativeapproach,originatingParty,serial,andvintage(i.e.theyearinwhichtheemissionreductionoccurred).

Therearealsoadditionalaspectsofreporting,reviewing,andaccountingforPartiesinvolved.

1.Initialreport

Beforestartingtransfersunderacooperativeapproach,areportmustbesubmittedthat

providesdetailsofthecooperationandhowitmeetstheParisAgreementcriteria.ItmustalsoincludeamethodologyforhowthetransferanduseofITMOswillbeaccountedforagainstparticipatingParties’NDCs(i.e.,how“correspondingadjustments”willbecarriedout).InitialreportsaresubjecttoatechnicalexpertreviewforconsistencywiththeArticle6guidance.

2.Annualinformation

Throughouttheimplementationperiod,Partiesmustprovideannualreportingonthetransfers,holdings,anduseofthe“InternationallyTransferredMitigationOutcomes”(ITMOs)toa

centralizeddatabasemanagedbytheUNFCCC.Theymustalsosharedetailsofthecooperation(cooperativeapproach,originatingParty,serialnumber,vintage,etc.).

3.Additionalelementsincludedasanannextothebiennialtransparencyreportandinthestructuredsummary

Thisiswhereaccountingfortheimpactofmarket-basedtransactionstowardNDCsoccurs,andinvolvesPartiescalculatingandreporting:

15.AsimilarconcepttocorrespondingadjustmentshasbeenintroducedGHGProtocol’sDraftLandSectorandRemovalsGuidance,Ch13,whichwillbefinalizedlaterthisyear.

16.OrforintensityandBAUtargets,itwouldbeusedincalculatingtheindicator.

SCALINGUPPRIVATESECTORACTIONONCLIMATECHANGE7

–TheannuallevelofemissionsandremovalscoveredbytheirNDC.Thismaybethesameasfullinventoryemissions,butitisnotnecessarilyso.ManycurrentNDCsareforasubsetofsectors/gasesoruseland-sectoraccountingthatisdifferenttothatintheinventory.

–ThenumberofITMOsauthorizedbythegovernmentforsale,aswelltotaltransfers,use,andholdingsofITMOs.

–AnannualemissionsbalancewhichencompassestheemissionsandremovalscoveredbytheNDC,adjustedforthetransferanduseofITMOsinthatyearviaacorrespondingadjustment.

Thismarketaccountingisnotundertakenwithintheinventory,oreventothestatedemissions

andremovalscoveredbytheNDC.Aseparatequantityisdefinedfortheemissionbalance.Thisprovidestransparencyofthefourdifferentaspects:thefullinventory,theemissionsandremovalscoveredbytheNDC,theITMOstransferredandused,andtheresultingemissionsbalance.

AseparateArticle6technicalexpertreviewanalyzestheinformationincludedinthebiennial

transparencyreports.ItlooksonlyattechnicalconsistencywiththeArticle6guidanceanddoesnot

reviewthecooperativeapproachesthemselves.Informationfromthistechnicalreviewissharedwiththesubsequenttechnicalexpertreviewandmultilateralconsiderationthatappliestoallbiennialreports.

ToprovidetransparencytoPartiesandthepublic,andtosupportthevariousreviews,theUNFCCChasestablishedaninterim“centralizedaccountingandreportingplatform,”calledforbyPartiesatCOP27in2021.Itcontains:

•TheUNFCCCdefaultinternationalregistryforITMOs,whichwillincludeconsistencychecksrelatingtotransfersandcooperativeapproaches,

•AnArticle6databasethatrecordsandcompilesinformation,includingITMOs,correspondingadjustments,andemissionsbalances,inanagreed-uponelectronicformat.Thisdatabase

willbothassistininformation-gatheringforthebiennialtransparencyreportandidentifyanyinconsistencies,

•TemplatesandoutlinesforcountryreportingonArticle6,and

•Asubmissionportaltofacilitatecountries’reportingofinformation.

Ensuringadequateannualprogressreportingagainstsingle-yeartargets

AnimportantanddifficultissueduringdevelopmentofArticle6washowtofairlycountinternationalcooperationtowardsingle-yearNDCtargets.

Forexample,therewasconcernthatoverallambitionwoulddwindleifbuyingcountrieswereallowedtooffsetonlyintargetyears,orifhostcountriesstoppedissuingunitstemporarilyintargetyears.Ifonlythetargetyearwascounted,thebuyerwouldneedtoacquirefarfewerunitsthanifeveryyear’sexcessemissionswereoffset,andthesellercouldcreateamisleadingpictureofprogressinthetargetyear.17

Partiessoughttoavoidthiswiththeoverarchingprinciplethat“cooperativeapproachesdonotleadtoanetincreaseinemissionsacrossparticipatingPartieswithinandbetweenNDCimplementation

17TheseissueshadbeenraisedpriortotheParisAgreement,seeforexamplePrag,HoodandBarata(2013)

/environment-and-sustainable-development/made-to-

measure-options-for-emissions-accounting-under-the-unfccc_5jzbb2tp8ptg-en

SCALINGUPPRIVATESECTORACTIONONCLIMATECHANGE8

periods,”andalsothroughspecificrulesforcorrespondingadjustmentsforsingle-yeartargets.

Theeventualsolutionisthat,evenforsingle-yeartargets,correspondingadjustmentsoccurinrelationtoeveryyearoftheimplementationperiod.Whatisreportedinthetargetyearisrepresentativeof

actiontakenovertime,notaone-offexercise.Partieschoosewhethertousetheaverageannual

ITMOtransfer/usetodate,ortheactualannualquantityineachyearandcomparethistoamulti-yearemissionstrajectoryorbudgetconsistentwithitsNDC.

Thissolutionbridgedthegapbetweenself-determinedNDCsandtheneedforamulti-yearlensthat

ensuresenvironmentalintegrityandavoidsdoublecounting.However,itisfarfromperfect.Whiletheaveragingandtrajectoryapproachesareconsideredfair,theycanyielddifferentemissionsquantitiestobecounted.FurthertechnicalworkinthisspaceisdueforconsiderationatfutureUNFCCCmeetings.

EVALUATINGTHERELEVANCEOFTHEPARISAGREEMENTTOTHECORPORATECLIMATEARCHITECTURE

CertainfeaturesoftheParisAgreementreporting,target-setting,andaccountingframeworksare

distinctfromthoseinthecorporatespace.Thesedifferencesofferpotentialopportunitiesfortheprivatesectortoexploreoptionsforarchitecturaldevelopment.

1.Thedetailsofthereporting,target-setting,andaccountingchoicesintheParisAgreementreflectitspurposeandcontext

SeveralfeaturesoftheParisAgreementframeworkspeaktoitspurposes.Theseincludeanallocativeinventoryframeworkthatdividesresponsibilityforemissionsbygeographicalboundaries;astrongfocusonGHGs(tCO2-eq)astheunitofmeasurementandoftradeinmarketmechanisms;anduseofcommonmethodologies,reportingtemplates,andformatstoenablecomparabilityandaggregation.

Thisallocativeframeworkmeansthatemissionstrendscountedtowardtargetsdonotalwaysresult

fromabatementaction.Theycanbedrivenbybusiness-as-usualactivities.Thatisnottosaythattheinternationalprocesshasnoexperien