29 May 2017: During the month of May, the intersessional meeting of the subsidiary bodies of the UNFCCC met and advanced work on the transparency framework under the Paris Agreement. Various documents and events also advanced the current UNFCCC transparency regime, which may provide some useful lessons for the future transparency regime under the Paris Agreement, and perhaps other efforts to track countries’ climate efforts, in line with SDG 13 (climate action).

The UNFCCC is in a transition period, from the current system under the UNFCCC and its Kyoto Protocol to the system being developed under the Paris Agreement. For transparency, this means continuing to meet the reporting obligations of the Kyoto Protocol and work within the measuring, reporting and verification (MRV) system established in Cancun, while negotiating new modalities, procedures and guidelines (MPGs) for the transparency framework set out in the Paris Agreement. This new system will, unlike the current system, be applicable to all parties and be based on countries’ nationally determined contributions (NDCs).

The month of May brought news both under the current transparency system under the Convention, as well as in the development of the new transparency regime under the Paris Agreement.

Advancing the Modalities of Transparency in the Paris Agreement ‘Rulebook’

In May, during the Bonn climate talks, the Ad Hoc Working Group on the Paris Agreement (APA) discussed the MPGs of the transparency framework for action and support under the Paris Agreement. Discussions, which were initiated by and captured in a Co-Facilitators’ tool, focused on: overarching considerations of the MPGs; national inventory report on anthropogenic emissions by sources and removals by sinks of greenhouse gas (GHGs); information necessary to track progress made in implementing and achieving NDCs under Agreement Article 4 (mitigation); information related to climate change impacts and adaptation under Agreement Article 7 (adaptation), as appropriate; information on financial, technology transfer and capacity-building support provided under Agreement Articles 9-11 (means of implementation, or MOI); technical expert review; and facilitative, multilateral consideration of progress.

In its conclusions adopted at the end of the session, the APA invites parties to make, by 30 September 2017, focused submissions taking into account the possible “headings and subheadings” contained in the Co-Facilitators’ informal note. The APA also requests the Secretariat to organize a pre-sessional roundtable on transparency, to be held on 4-5 November, with: one day focusing on transparency of support provided and received, technical expert review, and facilitative, multilateral consideration of progress; and another day focusing on transparency of action in relation to mitigation and adaptation. [IISD Summary of the Bonn Talks]

Developments Related to the Transparency Framework under the Convention and the Kyoto Protocol

The transparency framework under the Convention takes the form of national reporting through National Communications (NCs) from all Parties, as well as Biennial Update Reports (BURs) from non-Annex I or developing Parties and Biennial Reports (BRs), and annual GHG inventory submissions from Annex I Parties (developed countries).

In May, the UNFCCC Secretariat issued several of these reports.

The recent reviews of countries’ GHG inventories could be useful as countries seek to develop a common system for Parties. Several countries had their inventory reports for 2015 and 2016 reviewed: Croatia; Estonia; Finland; Germany; Iceland; Japan; Norway; Switzerland; Turkey; and Ukraine. These inventory reports fulfill Annex I countries’ obligations to submit an annual GHG inventory that includes all emissions and removals by sinks. These inventories are then reviewed by a team of experts, which applies the UNFCCC review guidelines, provides recommendations, and reviews a country’s actions to follow-up on previous recommendations. For all the countries reviewed, most of the issues raised by previous recommendations were resolved or are in the process of being resolved. This review process helps improve the completeness, accuracy and transparency of these reports over time. These inventory reports are one part of developed countries’ reporting obligations, which could help identify common practices and challenges for countries developing and maintaining their GHG inventories. [Croatia 2015 Inventory] [Croatia 2016 Inventory] [Finland 2015 Inventory] [Finland 2016 Inventory] [Estonia 2015 Inventory] [Estonia 2016 Inventory] [Germany 2015 Inventory] [Germany 2016 Inventory] [Iceland 2015 Inventory] [Iceland 2016 Inventory] [Japan 2016 Inventory] [Norway 2015 Inventory] [Norway 2016 Inventory] [Switzerland 2015 Inventory] [Switzerland 2016 Inventory] [Turkey 2015 Inventory] [Turkey 2016 Inventory] [Ukraine 2016 Inventory]

Another reporting obligation is less applicable to the Paris Agreement transparency framework. Developed countries submit reports of how they intend to apportion their allowed emissions, or, those emissions that would keep them under their target, into units that can be traded internationally. These assigned amount units (AAUs) for the second commitment period of the Kyoto Protocol are starting to be reported. Developed countries submit these reports, which are also reviewed by a team of experts, in order to calculate the AAUs that could be sold on a carbon market. Recently, the reports to facilitate calculating the AAUs were reviewed for: Croatia; Estonia; Finland; Germany; Iceland; Norway; Switzerland; and Ukraine.

While the Paris Agreement establishes a market mechanism, the Agreement also allows countries to choose their own policies or targets in a “bottom up” system. This could complicate the relatively more straightforward task of divvying up a country’s allowed emissions into AAUs. The calculation of tradable units from a top-down target may not hold as many lessons for the Paris Agreement, but these reviews of countries’ reports can help built trust and signal demand that can bolster flagging carbon markets. [Review Report for Croatia] [Review Report of Estonia] [Review Report of Finland] [Review Report of Germany] [Review Report of Iceland] [Review Report of Norway] [Review Report of Switzerland] [Review Report of Ukraine]

For developing countries that will be part of the transparency framework under the Paris Agreement, albeit with flexibilities, the technical analyses of their BURs can provide lessons on the various reporting capabilities and challenges of developing countries. The technical analyses of Colombia’s and Serbia’s BURs provide such lessons. For example, the technical review found that Serbia’s first BUR was submitted late, due to elections that led to restructuring the government and reallocating responsibility for environmental reporting to a new ministry. Internal governance can be as important as technical methodologies for effective reporting. [Technical Analysis of Serbia’s BUR]

For Colombia, the technical analysis assesses an annex in Colombia’s BUR related to emissions from the forest sector. This annex is part of Colombia’s efforts to participate in results-based payments as part of the mechanism for reducing emissions from deforestation and forest degradation in developing countries, and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks (REDD+). The review found, and even commended, Colombia on its efforts to ensure consistency between the methodologies used to measure the impacts of REDD+ implementation and used to calculate its forest reference emissions level (FREL). Costa Rica will aspire to this step, now that it has submitted its FREL. The review team found that the information used to construct its FREL was complete and transparent, providing further trust in future REDD+ results achieved in the country. Given the complexities of MRV in the forest sector, these analyses illustrate the ability of developing countries to undertake transparency efforts. [Technical Analysis of Colombia’s BUR] [Technical Assessment of the Proposed FREL of Costa Rica]

Multilateral Assessment and Facilitative Sharing of Views in Bonn

Other key elements of the current transparency regime are the International Consultation and Analysis (ICA) process for non-Annex I Parties that examines BURs through a technical analysis by a team of technical experts (TTE) and a facilitative sharing of views (FSV); and the international assessment and review (IAR) process that examines Annex I Party efforts through a technical review of each Annex I Party’s national reporting and a Multilateral Assessment (MA) of their progress towards achieving their economy-wide target. The FSV and MA are convened under the auspices of the Subsidiary Body for Implementation (SBI).

In Bonn, the SBI conducted the IAR process for 18 developed countries. The IAR process aims to promote the comparability of efforts among all developed Parties with regard to their quantified economy-wide emission limitation and reduction targets. [IAR May 2017 Webpage]

The SBI also organized the third workshop of the FSV, which is part of the ICA process for non-Annex I (developing) Parties. During the workshop, ten developing countries presented their BURs and engaged in a question and answer session. [Third Workshop of the FSV Webpage]

Capacity Building for Transparency

There is a recognized need written into the Paris Agreement for capacity building and other support for developing countries to participate in the future transparency framework. As part of this effort, the Global Environment Facility (GEF) approved several projects aimed at supporting countries’ development of BURs and national communications. The GEF is supporting the Dominican Republic’s first BUR, Costa Rica’s fourth national communication and second BUR, and Turkey’s seventh national communication and third BUR. [GEF Dominican Republic] [GEF Costa Rica] [GEF Turkey]

In related news, the Partnership on Transparency in the Paris Agreement has reported on the International BUR Champions Workshop that was held in Berlin, Germany, from 5-7 April 2017. The event focused on specific challenges and lessons learned along the various steps and aspects in the BUR and the ICA process, as well as approaches for overcoming them in order to improve transparency. The workshop brought together participants from various developed and developing countries to discuss concrete solutions with the view of replicate successes in the next round of BURs. [Partnership on Transparency Webpage on the BUR Champions Workshop]

This issue of the Transparency and Compliance Update is the 13th in a series produced by the SDG Knowledge Hub. It aims to provide an overview of reporting activities by UNFCCC Parties, as well as the related monitoring and assessment work carried out by the UNFCCC Secretariat and other organizations.