GuidingVision:“ArobustandsustainableeconomyforPNGthroughalowcarbonpathwayandgreeneconomicgrowth”

SBSTA/UNFCCCSUBMISSION

PNG SUBMISSION ON ARTICLE 6.2 SBSTA 47 AGENDA ITEM 11 (a)

1. The Government of Papua New Guinea (PNG) welcomes the opportunity to submit it’s views, inter alia, on the content of the guidance, including the structure and areas, issues and elements to be addressed, including considering some of those raised by Parties at SBSTA 46 as referred to in document FCCC/SBSTA/2017/L.15 para. 5

General Views

2. Article 6.2 has set the basis of cooperation between parties, who will volunteer to address the implementation of their NDCs beyond their own national obligations. This may include through bilateral arrangements or multilateral arrangements, but as prescribed under Article 6.1 it will obviously be efforts beyond those of one party alone, as such these cooperative approaches using ITMOs as prescribed under Article 6.2 in whatever form they will be should also contribute to a party’s sustainable development. It is PNG’s view that in this arrangement, sustainable development is not mutually exclusive.

3. Some parties may wish to use existing arrangements; such as their National Emission Trading Schemes or Regional Emission Trading Schemes, while other Parties may wish to explore the idea of setting up new initiatives to specifically serve the type of mitigation measures they prefer to facilitate transfer of ITMOs

PNG’s Legal Views on the Operations of Article 6.2

4. The cooperative approaches referred to under Article 6.2 does not prejudge, existing establishments, however it is certainly clear that it will be in the form of a market mechanism, where a party may wish to engage in; in order to access ITMOs. Since cooperative approaches, are voluntary in nature, parties maybe compelled to fully use their sovereign prerogative to choose and determine which mitigation measure they wish to implement or use . In terms of Operationalizing paragraph 2 of Article 6, it is of PNG’s views that some of these elements listed below, could form part of the operational framework;

Facilitation of Cooperative Approaches that generate ITMOs

5. It is of PNG’s view that under Article 6.2; several considerations on which approach could include the process of facilitating the following possible platforms listed in Figure 1 below could be packaged to operationalize paragraph 2 of Article 6;

Figure 1: Possible Platforms to source ITMOs under Article 6.2

Source: CCDA, Papua New Guinea, 2017

Global Governance of ITMOs

6. Environmental integrity, transparency and governance are all emphasized as important when dealing with ITMOs. As such, PNG is of the view that the existing governance structures that guide the role of market mechanisms will be very useful in guiding the consideration of these elements in moving forward.

7. PNG is not optimistic about the future role of one centralized oversight

mechanism. In PNG’s view it could be beneficial to explore the following considerations, when determining the type of cooperative approaches preferred by Parties under a Market Mechanism including the following;

a) The use of existing National ETS mechanisms as long as the existing

CooperativeApproaches

AnewMarketMechanism-ITMOs

ETSorETS-TypeArrangements(existingandemerging)

TransferofITMOstoanotherParty(BilateralArrangements)

AnetworkofGlobalETSPlatforms(LinkingallnewandemergingdomesticandregionalETS)

accounting rules used by the national ETS mechanisms are compatible with any new guidance developed by parties and approved by the CMA

b) The use of existing Regional ETS mechanisms as long as the existing accounting rules used by the national ETS mechanisms are compatible with any new guidance developed by parties and approved by the CMA

c) The use of new and emerging ETS mechanisms with the same approach applied in (a) and (b) with regards to the guidance approved by the CMA

d) The development of new bilateral ETS-type mechanisms if no existing arrangements such as (a), (b) and (c) are in place to accommodate the choice from parties who wishes to participate in any voluntary cooperative approaches

e) The development of issue-specific ETS-type mechanisms if possible. This is in relation to specific issues not currently covered by the existing ETS mechanisms developed to serve the KP, and may unlikely undergo minimal modifications to serve ‘orphaned mitigation measures’, whom parties may in their voluntary cooperation, may wish to choose and use for ITMOs

NDC Progressive Reporting on Voluntary Cooperation using ITMOs 8. The reporting of activities undertaken to generate units for the ITMOs should

be done through the NDCs in every progressive updates, and these should be included as a “feature” under the current work done by the APA in Agenda Item 3 on the “features” of the mitigation component of NDCs

9. The measurement, monitoring, reporting; data calculation, quality control and

quality analysis should be a task undertaken in coordination with the work done for the GHG Inventories, and should be linked to the role of the Transparency Framework under Article 13 of the Paris Agreement. Elements of the KP mechanisms which would be useful in this respect would be the ITL and the Data Exchange Standards in their consideration for this work.

Common Accounting Framework

10. A common accounting framework that promotes environmental integrity should be adopted or agreed to. A framework doesn’t mean specific accounting methodologies adopted by projects and mitigation activities, rather a set of rules recognized and accepted

11. This set of rules should be developed as a set of guidelines that will be used by all host parties, to approve the methodologies used by both the public and private sectors when implementing mitigation measures that intends to generate units to be used as ITMOs. These guidelines, would be helpful in assisting host-parties, ensure that consistency will promoted in ensuring that there is transparency, and clarity in understanding how mitigation outcomes have been calculated, quantified, verified and assessed. These guidelines should be developed by parties and adopted by the CMA

Environmental Integrity: a UNFCC-ISO Certified ITMO

12. PNG is of the view that the issue of environmental integrity will continue to trigger the emergence of a plethora of elements with no easy convergence through out the course of many negotiations session. As such, PNG is of the view that with specific regards to an ITMO, a universal recognition and vetting that gives confidence to all parties should come down to how an ITMO stands out, and is globally accepted. This should be in the context of a universal standard

13. As such PNG is proposing the consideration to have all ITMOs when transferred be UNFCCC-ISO certified, irrespective of which source it comes from as long as it meets the requirement contained within a guideline to be approved and adopted by the CMA and endorsed by an host party. Which means that the guidelines to be developed by parties and approved by the CMA. This standard when met, will ensure that ITMOs transferred between parties, comes from a source that is credible

14. It is for this reason, that PNG is proposing four simple steps which projects or mitigation activities wishing to be recognised for their future roles in providing units for use as ITMOs should follow in Figure 3. Below;

Figure 3: ISO & UNFCC- Certification of ITMOs before transfer between Parties

Source: CCDA, Papua New Guinea, 2017

16. There could be three level of requirements that every mitigation projects seeking recognition to generate ITMOs should go through in an host country. Level one is where they submit a request through the Designated National Focal Point. Level two is where the focal point may subject the project/s to a UNFCCC Environmental Integrity Review process which subjects the interested projects to the guidelines adopted by the CMA

17. After completion of the review, the Projects that fail to meet the guideline, cannot be eligible for recognition as ITMO projects. Projects which have completed all necessary checks should have their units be compiled and registered in a national system as ITMOs and that is the third level. Only when

HostPartyRequestsFinalapprovalfrom

theSDM-EB

ApprovedITMO-Projectsreceivestatusrecognition

byhostpartyDNA

UNFCCC/ISOstandardReviewby

SpecialisedReviewers

DNArefersproject/stoEIreviewusingCMAapprovedguidelines

CompliantProjectsseekingassessment

VoluntaryProjectsSeekingassessment(VCS)

ITMOSreleasedbyHost-Party(ETS,Bilateralarrangements,etal)

Level1

Level2

Level3

Level4

RegisteringintentwithHostPartyDNAtoberegisteredasanITMO

Project

ProjectApprovedorRejected

ISO-UNFCCCApproved

Labelforuse

the transfer of ITMOs are taking place, then the ITMO goes out with an ISO-INFCCC certified label, which now completes the fourth and final level

Final Approval by the new SDM-Executive Board for UNFCC-ISO Certification of ITMOs

18. The final approval for the recognition of these domestic projects could be sought from this new SDM mechanism Executive Board, performing a similar role to that of the CDM Board, who may give it’s approval on the ability of the host party to commence using units from those activities as ITMOs

19. In attempt, to have a more logical approach to the flow of procedural requirements, PNG is also mindful of the current developments under paragraph 4 of Article 6; and wishes to advice that these views be regarded as those that aren’t intended to prejudge the outcome of work being done on Article 6.4

Cross-Fora Application of Certified ITMOs for Use in ICAO and IMO Mechanism

20. PNG is of the view that all ISO-UNFCCC certified Units could also be eligible for use in any ICAO and IMO related schemes. This is to avoid double accounting in similar projects and mitigation activities, and double claiming of Units for different Schemes (UNFCC, ICAO and IMO) in the future

21. The only difference would be the name, where under Article 6 and for the purpose and use in all NDC target achievements, parties remain with the term “ITMO” where as for use under the emerging schemes for ICAO and IMO, it will be subjected to terms approved by the Environmental Committees serving ICAO and IMO. This will also enable the host country DNAs to ensure a smooth management and operation of their domestic transaction logs as well as ensuring that what is generated qualifies as an internationally recognized unit

The government of Papua New Guinea, avails itself its highest consideration

and continued support to the SBSTA Chair in progressing and moving forward

the development of this agenda item