The Paris Agreement presents an opportunity for accelerated and deeper voluntary action by the private sector to complement state action and close the ambition gap. ICROA has developed guidance which sets out pathways to achieve this, which can be supported and actioned by Parties and the private sector alike. To help inform this guidance, we have conducted targeted consultation with selected stakeholders, including the UNFCCC, Parties, independents standards and civil society.
This is part of an ICROA programme of work to secure a role for voluntary action in a post-Paris world. It builds on a first workshop we hosted in May 2017 with a broad range of stakeholders, and will serve as the basis for discussion for our second workshop, to be held at COP 23.
The guidance describes three potential models for the future framework of the voluntary carbon market, operating in parallel to each other and accommodating the variability in the Nationally Determined Contributions (NDC) and the provisions set out in the Paris Agreement:
- Non-NDC crediting model: Credits are generated from sectors which are not currently part of a host country’s NDC
- Financing Emission Reductions model: Emission reductions are financed by non-state actors and contribute to the host country’s NDC
- NDC crediting model: Emission mitigation units generated under the Paris Agreement's article 6.4 mechanism are voluntarily purchased and retired by non-state actors
ICROA is calling for an ‘open architecture’ approach to article 6.4 to allow independent standards to be accredited under the mechanism. We also propose the development of an international voluntary market account, as a central data repository to bring transparency to voluntary action across the private sector.
Whilst there is clear desire for international action on climate change, the emission reductions pledged through the NDCs are insufficient to hold the increase in the global average temperatureto below 2°C above pre-industrial levels – the primary objective of the Paris Agreement. To help close this ambition gap it is vital that voluntary action plays the fullest role possible.
To achieve this, it is important that the differences between regulated and voluntary action are recognised and addressed, notably that; voluntary action scales when the rewards to those taking action are explicit and meaningful, and that voluntary action needs to be measured, reported and verified in order to deliver environmental integrity, which is of paramount concern to those taking action. To inform and ensure alignment between the emerging arrangements under the Paris Agreement, we offer the following four guiding principles for voluntary action.
- It should be complementary to policy and regulation under the Paris Agreement focused on raising ambition
- It needs to be encouraged, recognised and rewarded to realise its full potential
- It must be reported openly & transparently to ensure the highest possible standards of integrity
- It needs sound governance, particularly because it operates outside of compliance systems
The guidance can be accessed here. It will serve as a basis for discussion in the second in our series of workshops on scaling voluntary action under the Paris Agreement. This event will be held at COP23 in Bonn on Friday 10th November 2017. For more details, please click here.