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INSIDER: 10 Reasons Why Accounting for NDCs Matters

You could say the heart of the Paris Agreement on climate change are countries’ NDCs, their commitments to mitigate and adapt to climate change. If your heart was underperforming, your doctor might recommend an EKG to monitor it and look for signs of disease. This data and information can be life-saving, and it’s critical for designing an improvement plan.

The NDCs are currently insufficient to meet the goal of limiting global temperature rise to 1.5-2 degrees C, and currently lead to 2.7-3.7 degrees C of warming. NDC accounting is like an EKG.  It is a constant check on the pulse of the Agreement to see how countries are performing.

Countries are currently developing guidance for NDC accounting of mitigation components, including an array of GHG targets, non-GHG targets, and policies and actions. With expectations to adopt this guidance by the end of the year, there is little time remaining to elaborate the technical details of how the accounting process will work.

There are many reasons countries should pursue robust accounting. Here are 10:

1. Knowing where you’re headed:  Countries need to know what emissions level they need to aim for in order to achieve their targets. This is important not only to know where individual countries’ emissions are headed, but also to inform estimates of future global emissions.

2. Tracking progress toward goals: Accounting supports consistent tracking of countries’ progress towards their target. These regularly check-ins help countries understand if they’re on track, and course-correct as needed.

3. Avoiding double-counting: Consistent, robust accounting by all countries would reduce the potential for double counting of “internationally transferred mitigation outcomes (ITMOS),” in which countries support emissions reductions in other countries (e.g. through emissions trading schemes) .  Otherwise countries could report the same emissions reductions, leading to double counting of the same emissions reduction while the reduction only occurred once.

4. Reflecting reality, not ideality: Related, accounting can ensure that countries are reporting numbers consistent with what the “atmosphere sees.” It’s possible that if there were no rules for the land sector, baselines or recalculations, for example, countries’ accounted numbers could be very far off from the actual changes in emissions in the atmosphere.

5. Preventing cooked books: Without rules, it will be easier for countries to “cook the books” and present accounting results in a way that makes it appear they are on track when they really aren’t. If the accounting guidelines are too ambiguous, or lack sufficient detail to accurately determine performance,  the public and other countries will lose confidence in countries’ action and thusly in the international process as a whole.

6. Understanding individual performance: When you build in transparent communication of accounting-related information to the NDC process, it fosters honest self-reflection and transparency about meeting national commitments. It also enables countries to hold other nations accountable for their promises.

7. Understanding global trends: Accounting information can help establish a clear understanding of the state of global climate action and progress toward gobal goals. This will be important to inform work during the global stocktake, which takes stock of countries’ progress towards the Paris Agreement’s goals.

8. Informing future policies: Accurate data and information is critical to making good policy decisions. Accounting results can show how specific mitigation efforts are performing. This can be useful as countries implement their current NDCs and consider enhacements or updates to their next NDCs, which are due in 2020.

9. Applying pressure to achieve targets: If there is temptation to undercut commitments through false representation of progress, countries will feel less pressure to actually meet their targets. However, if there is an understanding that accounting will show the actual state of progress, the pressure is on to meet targets.

10. Celebrating real successes: If there is confidence in targets, and countries achieve them, that’s cause for countries to be recognized for their achievements and ideally pursue greater action based on their success.

Writing the Rules of the Game

Accounting for mitigation will be critical to national MRV systems and to the transparency framework and NDC cycles under the Paris Agreement. As described in a new research paper, WRI proposes that countries apply robust accounting approaches that minimize opportunities to distort the truth.  This means having clear mitigation targets that can be understood in comparable terms, following transparent methodologies and calculations. It means basing accounting on the greenhouse gas inventories prepared using the latest IPCC guidance. It also includes applying a robust and transparent treatment of the land sector and the exchange of internationally transferred mitigation outcomes (ITMOs), all of which should be captured in a balance sheet to clearly explain the results and process of accounting. For more technical details, see the full recommendations in the paper.

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