Incorporating KP accounting standards

Legal assistance paper

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Date produced: 09/12/2010

How can the LCA text articulate the accounting rules so that they have the same level of legal requirements and standards as the KP accounting rules— enforceable under the LCA—while at the same time, refraining from any use of the terms “Kyoto Protocol”?

Summary:

The most straightforward method by which reference to the Kyoto Protocol can be removed is to replicate the relevant sections of the Kyoto Protocol in the LCA draft and then refer to that section/annex of the draft rather than to the KP itself.

Advice:

The most straightforward way to eliminate the words “Kyoto Protocol” from the draft text of CRP3, but retain the application of the relevant accounting rules, is to amend paragraph 45 (d) to say instead “[taking into account relevant rules contained in Annex VII] [applying the Rules contained in Annex VII]”, and inserting into the CRP3 document a new Annex VII which replicates Articles 5, 7 and 8 of the Kyoto Protocol. One would need also to copy or refer to the guidelines and methodologies agreed in Marrakesh under Articles 5.1, 5.2, 7, 8 (decisions 19/CP7, 20/CP7, 21/CP7, 22/CP7 and 23/CP7) and amend the references thereto in your new Annex VII. There are also references to Article 3 of the Kyoto protocol contained in Article 5, which would need to be amended.

Article 8.2 calls for the setting up of “Expert Review Teams”. If this element of Article 8 of the Protocol is to be included, then either a separate set of teams would need to be set up, effectively duplicating the work of those already operating under KP, or reference made to the specific names of those existing teams if they are to carry out the same work rather than referring back to them under the KP.

The following decisions were adopted in Montreal and will also need to be referenced or copied into the new Annex:

(a) 13/CMP.1 Modalities for the accounting of assigned amounts under Article 7, paragraph 4 of the Protocol;

(b) 14/CMP.1 Standard electronic format for reporting Protocol units;

(c) 15/CMP.1 Guidelines for the preparation of the information required under Article 7 of the Protocol;

(d) 19/CMP.1 Guidelines for national systems under Article 5, paragraph 1 of the Protocol;

(e) 20/CMP.1 Good practice guidance and adjustments under Article 5, paragraph 2 of the Protocol;

(f) 21/CMP.1 Issues relating to adjustments under Article 5, paragraph 2 of the Protocol;

(g) 22/CMP.1 Guidelines for review under Article 8 of the Protocol;

(h) 23/CMP.1 Terms of service for lead reviewers;

(i) 24/CMP.1 Issues relating to the implementation of Article 8 of the Protocol – 1 (Training programme for members of expert review teams); and

(j) 25/CMP.1 Issues relating to the implementation of Article 8 of the Protocol – 2 (Confidential information).

Supplemental

Subsequent to this advice being issued, the client suggested alternative text as follows:

“Requests SBSTA to develop measurement, reporting and verification guidelines, building on Part I of the Guidelines for the Preparation of Annex I National Communications, to ensure that comprehensive accounting of Annex I Party commitments is consistent, complete, comparable, transparent and accurate, for consideration by the COP at its next session.”

As this refers to “developing” guidelines which “build on” Part I it was acknowledged that this would allow for the incorporation of KP text as above without reference to the KP. We therefore advised that this language could be used if the client did not want to go the route of directly incorporating KP text into LCA draft as suggested in our original advice. The only risk would be that SBSTA does not then incorporate the KP text but that would seem unlikely and, in any event, would fail the “consistent, complete, comparable” test stipulated in the suggested language.