MRV and the KP time gap

Legal assistance paper

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Date produced: 11/06/2010

1. What are the legal and practical ramifications of the potential “time gap” after the Kyoto Protocol (“KP”) first commitment period on the MRV process? If there is a ‘time gap’ will Parties implementing MRV be legally obliged/bound to continue with MRV after 1 January 2013?

2. If Parties do not continue with MRV processes after KP commitment period I, once commitment period II is ratified and enters into force, will the emissions (increase or decrease) from the ‘gap period’ be counted towards either of commitment I or II achievements (rather than not being counted towards achievements at all)? 

3. If the answer to the above is ‘no’, is there a way to incorporate a mechanism (for example, an amendment or new provision) that will ensure States continue with MRV processes after the KP commitment I phase?   

4. What (if any) advantages in legal terms will there be to the MRV process continuing during the ‘time gap’?

If there is a “time gap” after the first commitment period of the KP, there will be no MRV requirements on Parties’ emissions reductions for so long as the gap exists.

It is not possible at this stage to say whether MRV of emissions reductions which occur within the “gap” will count towards either commitment I or II achievements.  The post-2012 agreement would have to address how emissions from the ‘gap period’ are treated.  The failure to agree a second commitment period does not cause the KP to terminate and some of its provisions (largely comprised of machinery provisions i.e. those that are necessary for the operation of the Protocol) will still be binding on the Parties.

There is no purely legal advantage for MRV continuing during the time gap. An agreement to continue MRV would not make it any easier, legally speaking, for the Parties to establish or enforce emission reduction targets. Strategically, though, it is our opinion that having MRV continue helps to provide the information necessary to make informed decisions on targets for a second commitment period as Parties remain engaged with the process.

1. The short answer is that if a “time gap” exists, there will be no MRV requirements of Parties’ emissions reductions for so long as the gap exists. As is noted in the query, MRV forms the “trust” element of the KP, and presumably will form a similar function in any successor treaty, particularly if any successor flows out of the Bali Action Plan, which specifically calls for the consideration of MRV in any post-2012 agreement.

That said, the Bali Action Plan is not legally binding. As soon as KP expires, the requirement that ratifying Parties reduce their emissions to a certain level will be lifted. As such, there would be no need for MRV of reductions because there would be no requirement that such reductions take place. In other words, there will be nothing to measure, report or verify.   There may very well be internal or external political pressures that would persuade a nation to continue to seek emissions reductions and to measure those in a manner consistent with KP, but there would be no international requirement or treating obligation requiring them to do so. Conceivably, there could be domestic MRV requirements that would at least include measurement and reporting elements similar to those recently promulgated by the Environmental Protection Agency in the United States. In that instance, the United States government has the responsibility for verifying the measurement and reporting by private GHG emitters. Another nation or international body, however, would not have the ability to verify data reported by EPA regarding the United States’ GHG emissions.

2. At this point, it is impossible to say since so much rests on a political will. The post-2012 agreement would have to address how emissions from the ‘gap period’ are treated. It is likely that Parties who achieve GHG emission reductions during the gap period will push for those to count towards commitment period II, while those Parties with GHG emissions increases will fight to have those increases ignored. Which side will win likely depends on how long the gap exists – the shorter the gap, the stronger the argument that any changes that occurred during the gap should count in the next commitment period since any changes are likely to be insignificant and would have occurred while Parties anticipated additional new emission reduction targets.

However, it must be noted that certain mechanisms will continue after the end of the KP. The failure to agree a second commitment period does not cause the KP to terminate and some of its provisions (largely comprised of machinery provisions i.e. those that are necessary for the operation of the Protocol) will still be binding on the Parties. Some substantive provisions would also continue to have a practical effect. There is nothing in the KP which indicates that the flexible mechanisms and their respective governing bodies will terminate in the absence of agreement on a second commitment period. Without binding targets, however, there may not be the commercial incentives to participate in projects under the flexible mechanisms and the carbon market may diminish accordingly;

3. If the Parties were to agree to an amendment to the KP in order to continue MRV requirements post-2010, then such Parties would be bound by those provisions. A formal agreement outside of the KP could also implement MRV requirements post-2012. The key would be to have some enforceability. The argument would have to be that it is important to have MRV because it is important to have reliable data going forward, because without an enforceable GHG emission reduction requirement, there is not as strong a case for enforceable MRV.

4. In purely legal terms, there is no particular advantage to MRV continuing during the time gap. An agreement to continue MRV would most likely not make it any easier, legally speaking, for the Parties to establish or enforce emission reduction targets. Strategically, though, it is our opinion that having MRV continue keeps Parties honest (to a certain extent), keeps them at the table and engaged with other Parties, and helps provide the information necessary to make informed decisions on targets for a second commitment period. In addition, the obligation to report accurately and to have the information verified during this period allows a degree of certainty to be  applied to the relevant party’s progress in e.g. achieving emissions reductions and meeting financial support pledges when these become legally binding.