Introduction to INDCs and
the role of economic instruments
INDCs: role of economic mechanisms and the private sector
Webinar, 7 October 2015
Low Emission Development Strategies, Latin America and the Caribbean
Andrew Howard, UNFCCC secretariat
Manager for Strategy, Collaboration and Communications (Carbon Markets)
Overview
Intended nationally determined contributions (INDCs)
• COP 21 and the Paris Agreement
• State of play with INDCs
◦ Submissions and where we stand
◦ Parties’ views on economic mechanisms
• Secretariat’s synthesis report
2
Four pillars of COP 21
• A new climate agreement to inspire nations towards progressive
efforts and transformation of the global economy
◦ A long-term vision, informed by science
◦ Upward shift over time, supported by finance and cooperation
• INDCs to define national goals and policies
◦ First set of INDCs sets a floor of ambition – not a ceiling
◦ NDCs to be regularly improved – measurable and transparent
• Climate finance to shift and scale up transformative investments,
based on a clear pathway to US$ 100 billion per year
• Action agenda to showcase the groundswell of action by Parties,
subnational authorities, private sector and civil society
3
Economic mechanisms sought under the Paris Agreement
• Use of economic mechanisms towards their NDCs
• International rules to govern accounting, avoid double counting
and uphold environmental integrity
• A centralized mechanism governed under the UNFCCC,
accessible to all Parties and building on the CDM
• Transitioning value from the CDM
◦ Develop new mechanism for post-2020, based on Kyoto rules
◦ Allow existing projects to migrate to the new mechanism
◦ Allow (some) pre-2020 credits to help meet post-2020 NDCs?
4
Intended nationally determined contributions
National blueprints for climate action
◦ International communication of governments’ actions
◦ Demonstration of leadership in addressing climate change
COP guidance on INDCs
◦ INDCs are a country prerogative, reflecting national
circumstances, but a progression beyond current undertakings
◦ All INDCs to address mitigation, optionally to address adaptation
Possible information to be included
◦ Quantifiable info with clear reference point
◦ Timeframes, coverage
◦ Contribution to Convention objective (fair and ambitious)
◦ Assumptions and methodological approaches
5
Overall INDC trends
• New momentum, emissions well below reference scenario, but
still 14 Gt from a 2°C pathway (preliminary estimate)!
• Higher participation and ambition of countries
• Wider coverage of sectors and emissions
• Better clarity and completeness of accompanying info
• More robust national structures for climate policy making
• Improved national capabilities, but more support needed
• 75% of Parties planning or considering economic mechanisms
6
INDC status (up to 6 October 2015)
120 INDCs received
◦ Covering 148 out of 196 parties (EU covers 28 Parties)
◦ 87% of global emissions and 86% of world population
◦ Submissions by all developed countries
◦ Submissions by two thirds of developing countries
◦ 48 INDCs not yet received
Some revised INDCs already being submitted
Timeframes
◦ Most specify a 2030 horizon (>80% of INDCs)
◦ Some 2020 or 2025 horizons to focus on early action
◦ 2050 horizon sometimes given, especially for forestry
7
INDCs submitted and still awaited
100%
8
80%
0
1
13
26
60%
22
40%
28
46
20
31
20%
0%
African Group
Asia-Pacific Group
Eastern European
Group
With INDC
Latin American and
Caribbean Group
Western European
and Others Group
Without INDC
8
Mitigation and adaptation
Developing country INDCs
◦
◦
◦
◦
Around half distinguish unconditional/conditional mitigation
Unconditional contributions typically 5-30% below BAU
Conditional contributions 2-3 times higher, dependent on support
(finance, technology transfer, capacity building)
Most include an adaptation component
Developed country INDCs
◦
◦
Some mention of limited domestic abatement potential and/or
mitigation targets conditional on access to international markets
Two INDCs include an adaptation component
9
Nature of mitigation contributions
Absolute
targets
Deviation
from BAU
Intensity
target
Policy and
actions
All Parties
60
62
5
16
Share of
all Parties
41%
42%
3%
11%
Developed
countries
95%
2%
2%
Developing
countries
18%
58%
5%
15%
10
Intention to use economic mechanisms
Yes
Maybe
No
Silent
All Parties
63
45
8
29
Share of
all Parties
43%
31%
6%
20%
Developed
countries
83%
5%
7%
5%
Developing
countries
27%
42%
5%
26%
Further elaboration given
• Intended domestic markets = 36 countries (7 more considering)
• Interest in linking markets = 35 countries (5 more considering)
• 15 countries as “buyers” – 37 countries as host country “sellers”
11
Economic mechanisms in INDCs
120
28
Many Parties see a role for markets to
achieve part of their contribution or mobilize
their mitigation potential
call for
int’l
market
37
•
•
•
•
•
•
No double counting
Environmental integrity
Transparency
Verified outcomes
Real emission reductions
Robustness, etc
34
call for
provisions
or rules
mention
requirements
for markets
20
INDCs by
148 Parties
81
consider
using
markets
name specific
mechanisms
(CDM)
12
What the INDCs say …
“the flexibility offered by the existing (ie CDM) and future
emission reduction mechanisms under the UNFCCC will be
used where possible to achieve Barbados’ contribution
domestically or jointly with regional/international partners”
Barbados
“Belize is willing to explore the potential of market
mechanisms, including the CDM and other mechanisms
under the UNFCCC process, that demonstrate environmental
integrity, result in real, permanent, additional, verified
mitigation outcomes, prevent double counting and are easily
accessible”
Belize
13
What the INDCs say …
“… supports the use of market-based mechanisms to
implement and achieve the conditional portion of the
contributions mentioned in this document”
Cape Verde
“Costa Rica reserves the right to use the Domestic Carbon Market as
an instrument to accomplish its mitigation goals, as a complement to
national and sectorial policies for emissions reduction”
Costa Rica
14
What the INDCs say …
“Haiti calls for the fast implementation of such a
market mechanism in order to mobilize the mitigation
potential, even before 2020”
Haiti
15