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ECCC Releases Inefficient Fossil Fuel Subsidies Assessment Framework and Guidelines

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The Minister of Environment and Climate Change on Monday announced the release of the Inefficient Fossil Fuel Subsidies Government of Canada Self‑Review Assessment Framework (the Assessment Framework) and the Inefficient Fossil Fuel Subsidies Government of Canada Guidelines (the Guidelines). The Assessment Framework and Guidelines were jointly developed by Environment and Climate Change Canada (ECCC) and the Department of Finance Canada and are intended to support Canada’s 2009 commitment alongside other G20 countries to phase out and rationalize inefficient fossil fuel subsidies over the medium-term while providing targeted support for the poorest. The Assessment Framework also builds on Canada’s commitment under the Statement on International Public Support for the Clean Energy Transition (the Glasgow Statement) in 2021 at COP 26 in Glasgow, to end new direct public support for international unabated fossil fuel, except in limited and clearly defined circumstances that are consistent with the 1.5°C warming limit and the goals of the Paris Agreement. This bulletin briefly summarizes key information and criteria provided in the Assessment Framework and Guidelines. Assessment Framework. ECCC noted that the Assessment Framework is the “first transparently published methodology worldwide” and that it will be used to determine which tax and non-tax measures constitute an “inefficient fossil fuel subsidy”. The Assessment Framework defines “measures” as including: (i) expenditure programs (i.e., grants, contributions, transfers); (ii) intramural research and development; (iii) tariff and duty reliefs; and (iv) tax expenditures that support fossil fuel consumption or that can be claimed by the fossil fuel sector and that represent alternatives to expenditure programs (i.e., tax credits, accelerated capital cost allowances, flow-through shares), and utilizes the World Trade Organization’s definition of “subsidy” as set out in Article 1.1 of the Agreement on Subsidies and Countervailing Measures. The international carbon markets provisions of Article 6 of the Paris Agreement will have an…

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UNFCCC Secretariat Releases Concept Note on Carbon Removals under Article 6.4

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The UNFCCC Secretariat has released a concept note on carbon dioxide removal (CDR) activities under the Article 6.4 Mechanism (the Concept Note), published as an annex to the annotated agenda of the first meeting of the Article 6.4 Supervisory Body (SB) taking place beginning today in Bonn, Germany. This bulletin provides a brief summary of the Concept Note. Alongside the Concept Note, the UNFCCC Secretariat also released draft rules of procedure for the SB and concept notes on SB work in 2022-2023, its support structure, share of proceeds, and guidelines on baselines and additionality. Overview. The Concept Note is the first step in the SB’s work to develop recommendations for CDR and includes analysis of possible CDR activities under the Article 6.4 Mechanism, including CDR monitoring, reporting, accounting, crediting periods and issues relating to addressing reversals, avoidance of leakage, and avoidance of other negative environmental and social impacts. We anticipate that CDR will be given particular attention at COP 27 set to take place in Sharm El-Sheikh, Egypt this November and note that the SB is due to make recommendations on CDR in advance of the COP. Key issues and analysis. The Concept Note provides analysis on the following key issues: Types of CDR activities. The Concept Note defines CDR as “anthropogenic activities that remove carbon dioxide (CO2) from the atmosphere and ensure its long-term storage in terrestrial, geological, or ocean reservoirs, or in long-lasting products” and acknowledges that CDR cannot serve as a substitute for deep emissions reductions, but can fulfil multiple complementary roles (including near-term reductions, addressing residual emissions from ‘hard-to-transition’ sectors, and achieving and sustaining net-negative in the long-term). The Concept Note breaks CDR out into the following categories: Afforestation and reforestation (A/R) and revegetation; Sustainable forest management;  Wetlands restoration and re-wetting;  Agroforestry; Urban forestry; Soil organic carbon enhancement in croplands…

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UNFCCC Secretariat Publishes Informal Reports on Article 6.2

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The UNFCCC Secretariat today published informal reports on the technical workshops on Article 6.2 of the Paris Agreement that were held virtually between May 16 and 19, 2022. The technical workshops were held further to the Article 6.2 Guidance on cooperative approaches agreed at COP 26 in November 2021. The technical workshops focused on Article 6.2 reporting rules and related infrastructure requirements, which are expected to influence how countries operationalize Article 6 through domestic legislation. Two informal reports and three supporting slide decks were published on the following topics:  Tables and outlines for reporting required Article 6.2 information (informal report): Outlines for the initial report and regular information annex to the biennial transparency report (slide deck); and Agreed electronic format for annual information (slide deck) Options for implementing Article 6 infrastructure requirements (informal report): Registries and the international registry; The Article 6 database; and Centralized accounting and reporting platform (slide deck). The Subsidiary Body for Scientific and Technological Advice (SBSTA) will consider the outcomes of the technical workshops at its intersessional meetings set to take place in Bonn between June 6 and 16, 2022. The SBSTA is then expected to forward its recommendations for consideration and adoption at COP 27 in Sharm el-Sheikh, now set to begin one day earlier, on November 6, and run until November 18, 2022. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

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