Advertisement

Sustainability labelling as a tool for reporting the sustainable development impacts of climate actions relevant to Article 6 of the Paris Agreement

  • Karen Holm Olsen
  • Fatemeh BakhtiariEmail author
  • Virender Kumar Duggal
  • Jørge Villy Fenhann
Original Paper

Abstract

The architecture of global carbon markets has changed significantly since the Paris Agreement and the 2030 Agenda for Sustainable Development Goals were both agreed in 2015. Voluntary, international cooperative approaches established in Article 6 of the Paris Agreement allow Parties to work together to achieve the targets set out in their respective Nationally Determined Contributions to limit global warming to an increase below 1.5–2 °C. In Article 6.4, a sustainable mitigation mechanism is established for which rules, modalities and procedures will be developed internationally considering the experience and lessons learned from existing mechanisms, such as the Clean Development Mechanism (CDM) and its Sustainable Development (SD) Tool. Historically the issue of making integrated assessments of sustainable development and mitigation actions has been politically and methodologically controversial for many reasons: developing countries fear that an international definition of SD will interfere with their sovereignty and therefore their ability to define their own development pathways; players in the carbon market fear that markets can only handle one objective, namely mitigation outcomes; and sustainable development is regarded as too complex and costly to be measured and quantified. In an effort to address these concerns, the article proposes a new methodology for the sustainability labelling of climate mitigation actions relevant to Article 6 approaches. The article draws on an application of the CDM SD tool to analyse 2098 Component Programme Activities that had entered the CDM Pipeline by January 2017. The article demonstrates that assessment of the sustainable development benefits of climate actions can be graded and labelled based on the analysis of qualitative data, which is less costly than applying a quantitative approach.

Keywords

Sustainable development (SD) impacts Climate actions Labelling Sustainability reporting Clean Development Mechanism (CDM) Article 6 Cooperative approaches Paris Agreement 

Abbreviations

CDM

Clean Development Mechanism

SD

Sustainable Development

CPAs

Component Programme Activities

NDCs

Nationally Determined Contributions

SDGs

Sustainable Development Goals

ITMOS

International Transfer of Mitigation Outcomes

LOA

Letter of Approval

CERs

Certified Emission Reductions

POA

Programme of Activities

COP

Conference of the Parties

PDDs

Project Design Documents

FCF

Future Carbon Fund

MRV

Monitored, Verified and Reported

ICAT

Initiative for Climate Action Transparency

Notes

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest. Views expressed in the article are those of the authors and do not reflect the views and policies of the Asian Development Bank (ADB) nor the UNEP DTU Partnership, to which the authors are affiliated.

Supplementary material

10784_2018_9428_MOESM1_ESM.docx (112 kb)
Supplementary material 1 (DOCX 111 kb)

References

  1. ADB. (2017). Future carbon fund: Delivering co-benefits for sustainable development. Manilla: Asian Development Bank.Google Scholar
  2. ADB. (2018). Decoding Article 6 of the Paris Agreement. Manilla: Asian Development Bank.Google Scholar
  3. Alfares, H. K., & Duffuaa, S. O. (2008). Determining aggregate criteria weights from criteria rankings by a group of decision makers. International Journal of Information Technology & Decision Making, 7(04), 769–781.CrossRefGoogle Scholar
  4. Arens, C., Mersmann, F., Beuermann, C., Rudolph, F., Olsen, K. H., Bakhtiari, F., et al. (2015). Reforming the CDM SD Tool: Recommendations for improvement. Berlin: German Emissions Trading Authority.Google Scholar
  5. Belton, V., & Stewart, T. (2002). Multiple criteria decision analysis: An integrated approach. Berlin: Springer.CrossRefGoogle Scholar
  6. Dialogue, C. P. (2012). Climate change, carbon markets and the CDM: A call to action, report of the high-level panel on the CDM policy dialogue, September 2012. Bonn: United Nations Framework Convention on Climate Change Secretariat.Google Scholar
  7. Dransfeld, B., Wehner, S., Bagh, T., Bürgi, P., Puhl, I., Zegg, M., et al. (2017). SD-benefits in future market mechanisms under the UNFCCC. Dessau-Rosslau: G. Umweltbundesamt. Retrieved from Climate Change.Google Scholar
  8. Edwards, W., & Barron, F. H. (1994). SMARTS and SMARTER: Improved simple methods for multiattribute utility measurement. Organizational Behavior and Human Decision Processes, 60(3), 306–325.CrossRefGoogle Scholar
  9. Fenhann, J. V. (2016). UNEP DTU NAMA pipeline analysis and database. Copenhagen: UNEP DTU Partnership.Google Scholar
  10. Fenhann, J. (2017). UNEP DTU CDM/JI pipeline. Retrieved January 2017, from UNEP DTU Partnership. http://www.cdmpipeline.org/.
  11. Figueres, C. (2005). Sectoral CDM: Opening the CDM to the yet unrealized goal of sustainable development. International Journal of Sustainable Development Law and Policy, 2(1), 1–19.Google Scholar
  12. Greiner, S., & Howard, A. (2017). Where to now with the CDM? Deciding on the fate of the CDM activities, credits, rules and institutions. Carbon Mechanisms Review, 1, 10–13.Google Scholar
  13. Griggs, D., Stafford-Smith, M., Gaffney, O., Rockström, J., Öhman, M. C., Shyamsundar, P., et al. (2013). Policy: Sustainable development goals for people and planet. Nature, 495(7441), 305–307.CrossRefGoogle Scholar
  14. Hermwille, L., & Kreibich, N. (2017). Identity crisis? Voluntary carbon crediting and the Paris Agreement. Wuppertal Institute for Climate, Environment and Energy, Wuppertal, Germany. https://epub.wupperinst.org/frontdoor/deliver/index/docId/6607/file/6607_Identity_Crisis.pdf.
  15. Horstmann, B., & Hein, J. (2017). Aligning climate change mitigation and sustainable development under the UNFCCC: A critical assessment of the clean development mechanism, the green climate fund and REDD. Bonn: German Development Institute/Deutsches Institut für Entwicklungspolitik (DIE).Google Scholar
  16. ICAT. (2018). Sustainable development guidance. Guidance for assessing the environmental, social and economic impacts of policies and actions. May 2018 version. ICAT Guidance. D. Rich & K. H. Olsen, Initiative for Climate Action Transparencey (ICAT) (p. 195). World Resources Institute (WRI) and UNEP DTU Partnership (UDP). https://www.climateactiontransparency.org/wp-content/uploads/2017/07/ICAT-Sustainable-Development-Guidance-First-Draft-26-JUL-2017.pdf.
  17. Joumard, R., & Nicolas, J. P. (2010). Transport project assessment methodology within the framework of sustainable development. Ecological Indicators, 10(2), 136–142.CrossRefGoogle Scholar
  18. Koakutsu, K., Tamura, K., Kuriyama, A., Ishinabe, N., Nandakumar, J., Miyatsuka, A., Guo, J., Ninomiya, Y., Okubo, N. (2012). Green economy and domestic carbon governance in Asia (pp. 55–84). Yokohama: Greening Governance in Asia-Pacific, Sato Printing Co. Ltd.Google Scholar
  19. Marcu, A. (2016). Carbon market provisions in the Paris Agreement (Article 6). Brussels: Centre for European Policy Studies.Google Scholar
  20. Michaelowa, A., & Hoch, S. (2016). Built on experience: How to transition from the CDM to the sustainable development mechanism under the Paris Agreement. Carbon Mechanisms Review, 2016(1), 28–31.Google Scholar
  21. Olsen, K. H. (2007). The clean development mechanism’s contribution to sustainable development: A review of the literature. Climatic Change, 84(1), 59–73.CrossRefGoogle Scholar
  22. Olsen, K. H., Arens, C., & Mersmann, F. (2017). Learning from CDM SD tool experience for Article 6.4 of the Paris Agreement. Climate Policy, 18, 1–13.Google Scholar
  23. Olsen, K. H., & Fenhann, J. (2008). Sustainable development benefits of clean development mechanism projects: A new methodology for sustainability assessment based on text analysis of the project design documents submitted for validation. Energy Policy, 36(8), 2819–2830.CrossRefGoogle Scholar
  24. Olsen, K. H., & Soezer, A. (2016). The best of two worlds: Article 6 mechanisms shall contribute to sustainable development goals (SDGs). Carbon Mechanisms Review, 2, 14–16.Google Scholar
  25. Parnphumeesup, P., & Kerr, S. A. (2011). Stakeholder preferences towards the sustainable development of CDM projects: Lessons from biomass (rice husk) CDM project in Thailand. Energy Policy, 39(6), 3591–3601.CrossRefGoogle Scholar
  26. Poveda, C. A., & Young, R. (2015). Potential benefits of developing and implementing environmental and sustainability rating systems: Making the case for the need of diversification. International Journal of Sustainable Built Environment, 4(1), 1–11.CrossRefGoogle Scholar
  27. Roberts, R., & Goodwin, P. (2002). Weight approximations in multi-attribute decision models. Journal of Multi-Criteria Decision Analysis, 11(6), 291–303.CrossRefGoogle Scholar
  28. Salling, K. B., & Pryn, M. R. (2015). Sustainable transport project evaluation and decision support: Indicators and planning criteria for sustainable development. International Journal of Sustainable Development and World Ecology, 22(4), 346–357.CrossRefGoogle Scholar
  29. SDSN. (2015). Indicators and a monitoring framework for the Sustainable Development Goals: Launching a data revolution for the SDGs. A report by the Leadership Council of the Sustainable Development Solutions Network. Revised working draft (Version 6).Google Scholar
  30. Sutter, C. (2003). Sustainability check-up for CDM projects. Berlin: Wissenschaftlicher Verlag.Google Scholar
  31. Tewari, R. (2012). Mapping of criteria set by DNAs to assess sustainable development benefits of CDM projects. CDM Policy Dialogue (p. 36). P. Ghosh. New Delhi, India: The Energy and Resources Institute (TERI).Google Scholar
  32. UN General Assembly. (2015). Transforming our world: The 2030 agenda for sustainable development. 21 October 2015. A/RES/70/1. https://www.refworld.org/docid/57b6e3e44.html. Accessed 5 Feb 2019.
  33. United Nations Framework Convention on Climate Change (UNFCCC). (2012). Benefits of the clean development mechanism 2012. https://cdm.unfccc.int/about/dev_ben/ABC_2012.pdf.
  34. UNFCCC. (2014). Information note: Evaluation of the use of the voluntary online sustainable development co-benefits tool. Version 01.0. UNFCCC Secretariat, Bonn.Google Scholar
  35. UNFCCC. (2015). Paris Agreement. Paris: UNFCCC.Google Scholar
  36. United Nations World Summit. (2005). https://www.un.org/ga/documents/overview2005summit.pdf.
  37. Verles, M., Braden, S., Taibi, F.-Z., & Olsen K. H. (2018). Sustainable development and governance in context of the UNFCCC process (p. 10). Copenhagen: UNEP DTU Partnership and Gold Standard Foundation.Google Scholar
  38. WCED (World Commission on Environment and Development). (1987). Our common future. Oxford: Oxford University Press.Google Scholar
  39. Wood, R. G. (2011). Carbon finance and pro-poor co-benefits: The gold standard and climate, community and biodiversity standards (Vol. 4). London: IIED.Google Scholar

Copyright information

© Springer Nature B.V. 2019

Authors and Affiliations

  • Karen Holm Olsen
    • 1
  • Fatemeh Bakhtiari
    • 1
    Email author
  • Virender Kumar Duggal
    • 2
  • Jørge Villy Fenhann
    • 1
  1. 1.UNEP DTU Partnership, Department of Management EngineeringTechnical University of DenmarkCopenhagenDenmark
  2. 2.Sustainable Development and Climate Change DepartmentPrincipal Climate Change Specialist (Future Carbon Fund)Mandaluyong City, Metro ManilaPhilippines

Personalised recommendations