Kyoto countries shuffle towards compliance as True-up deadline approaches

Published 12:08 on October 28, 2015  /  Last updated at 00:21 on November 25, 2015  /  Australia, Climate Talks, EMEA, EU ETS, International, Japan, Kyoto Mechanisms, New Zealand, Switzerland  /  No Comments

Sixteen Kyoto Protocol signatory countries have yet to comply under the treaty’s so-called True-up period for 2008-2012 despite all 36 having sufficient carbon units in their emissions trading registry accounts, updated UN data showed on Wednesday.

Sixteen Kyoto Protocol signatory countries have yet to comply under the treaty’s so-called True-up period for 2008-2012 despite all 36 having sufficient carbon units in their emissions trading registry accounts, updated UN data showed on Wednesday.

The updated Kyoto balances showed that 20 of the 36 Annex I nations had now transferred enough Assigned Amount Units (AAUs) to their retirement accounts to cover their cumulative greenhouse gas emissions over those five years, Kyoto’s first commitment period (CP1).

Data published previously by the UNFCCC on Sep. 30 showed that just Monaco was in compliance, and that Italy and Iceland were facing carbon unit deficits compared to their emissions.

Italy earlier this month agreed a deal to buy 20 million zloty (€4.7 million) worth of AAUs from Poland. No further details were given, but Wednesday’s updated data showed that 23.4 million units have been deposited into Italy’s accounts in the past month, while nearly the same amount has left Poland’s.

Iceland is the only country that currently holds fewer AAUs than its 2008-2012 emissions, but the government told Carbon Pulse that the 3.3 million-unit shortfall would be covered by the application of a provision from the UN’s 2001 Marrakesh Accords that exempts emissions from large industrial plants built in small countries since 1990 that utilise renewable energy.

The UN data shows that the 36 countries collectively emitted 46.7 billion tonnes of CO2e during CP1, which was well below the pact’s targets due partly to the economic collapse of the former Soviet Republic in the 1990’s, and to the global recession that started in the late 2000’s.

NET HOLDING CHANGES

The updated data showed that many countries received or transferred out AAUs over the past month. Amongst the largest net changes in national account balances were:

– Australia (+12.6 million)
– Czech Republic (-40 million)
– Finland (+10 million)
– France (-948,000)
– Germany (+998,000)
– Hungary (+1.2 million)
– Netherlands (-5.6 million)
– New Zealand (+2.1 million)
– Portugal (-286,000)
– Spain (+308,000)
– Sweden (+3.1 million)
– Switzerland (-730,000)
– UK (-7.4 million)

Overall, there appeared to be a net reduction of 38 million units across all nations’ accounts, which included those in the EU’s Community Registry.

These units were likely transferred to company or other government holding accounts, and were not accounted for in the latest data update.

NON-COMPLIANT

The 16 non-compliant countries, which include Australia, Belgium, Japan, Russia, Ukraine and Sweden, have simply to transfer an ample number of AAUs from their holding accounts to their retirement accounts before 2400 UTC on Nov. 18.

Failure to do this can result in repercussions ranging from a review by Kyoto’s Compliance Committee to, in severe cases, the suspension of carbon-unit trading under Kyoto, or the AAU shortfall being inflated by 30% and that figure being deducted from a country’s balance during the protocol’s second commitment period (2013-2020).

Wednesday’s updated data showed that compared to their cumulative emissions, the 36 countries were sitting on an AAU surplus of more than 13 billion units, with Russia and the Ukraine holding the bulk of that at 5.8 billion and 2 billion respectively.

The leftover emissions rights are likely to be used by the countries that remain in Kyoto to help meet their obligations under the treaty’s second commitment period (CP2), which runs from 2013 to 2020.

AAUs have been dubbed “hot air” by some green groups because they did not come about as the result of climate policy.

The units have emerged as a divisive issue at UN talks, with western nations seeking their cancellation and eastern countries arguing that the credits’ method of creation was irrelevant compared to the fact that they represent genuine reductions.

Eventually, negotiators at the 2012 UN climate summit in Doha agreed to allow nations holding surplus AAUs from CP1 to carry them forward to CP2. However, strict limits were imposed on buyers, allowing them to only procure AAUs up to a maximum of 2.5% of their own CP2 allocations.

In addition, Australia, the EU, Japan, New Zealand, Switzerland and Norway made a political declaration vowing that they would not buy any.

CANCELLED

Wednesday’s updated UN data also showed that Annex I countries had cancelled around 701.4 million AAUs as of Oct. 27, an increase of 6 million compared to last month.

Cancelled units cannot be counted against a country’s emissions. Governments must cancel an AAU for every EU Allowance or Kyoto project-based credit (CER or ERU) that is used to voluntarily offset an organisation’s or individual’s emissions.

Annex I countries must also cancel AAUs to account for deforestation that has occurred since 1990, Kyoto’s base year, as the trees in question are no longer able to absorb CO2.

By Mike Szabo – mike@carbon-pulse.com

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