Use of Kyoto Protocol Units post-2020

Legal assistance paper

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Date produced: 05/06/2019

What does the failure to ratify the Doha amendment to the Kyoto Protocol mean for the future of KP units (Assigned Amount Units in particular) and whether Parties may use those units for post-2020 emissions targets?



Carried-over (surplus) Assigned Amount Units (AAUs) could be used by KP Annex B states in the following cases: a) either by means of accounting emissions to demonstrate the implementation of an NDC; and b) depending on future CMA decisions, under future voluntary ITMOs, whose ‘transferred outcomes’, including surplus AAUs, could be used to prove the implementation of a country’s NDC. There are four legal implications which could emerge from such practice: it could compromise the required increased ambition of individual NDCs (Art. 4(3)); it could be interpreted to go against the very purposes of the enhanced transparency framework (Art.13(1)); it could lead to environmental integrity and double-accounting issues under the ITMOs framework; and it goes against previous indications of the COP.


As the Doha Amendment to the Kyoto Protocol (KP) for the 2012-2020 commitment period is unlikely to enter into force, two issues regarding the use of KP emission units under the Paris Agreement (PA) have emerged. First, some state parties to the PA are intending to use surplus Assigned Amount Units (AAUs) under the first commitment period of the KP for demonstrating the implementation of Nationally Determined Contributions (NDCs).  Second, there are calls for allowing the transfer and recognition of KP’s Certified Emission Reductions (CERs) under the NDC implementation framework and the marked-based mechanisms of Article 6 PA.

This advice will focus on the extent to which a state party to the PA, and Annex B party to the KP, can use its surplus AAUs to prove the implementation of its NDC. It will also outline relevant ‘legal implications’ to consider for future negotiations.

Using AAUs under the NDC implementation framework

AAUs are the base units of emission which Annex B parties to the Kyoto Protocol can use to demonstrate compliance with the assigned emission target during commitment periods (2008-2012, and 2012-2020 under the Doha Amendment, respectively). In essence: a) an AAU, like other units of emission, consists of an entitlement by the bearer state to release in the atmosphere a certain quantity of GHGs; b) AAUs are used to prove compliance against the individual targets under the KP and can be transferred between Annex B parties under the International Emission Trading scheme (KP, Art. 17); c) Annex B parties can voluntary link the accounting and transferability of their AAUs with emission allowances of regional emissions trading schemes, such as the European Union Emission Trading Scheme.

At start, the rules on transferability, use and carry-over of AAUs (‘surplus AAUs) have only legal validity under the treaty law framework of the KP. Therefore, the legal entitlement to AAUs and their uses can only be exercised by KP Annex B state parties, under the conditions established by the KP and relevant decisions of the CMP. Despite the fact that the Doha Amendment will likely not enter into force, state parties to the KP can nonetheless opt to provisionally apply it pending its entry into force, or are in any case “implement[ing] their commitments and other responsibilities in relation to the second commitment period, in a manner consistent with their national legislation or domestic processes”.[1] This provisional application could have the effect of creating additional AAUs for each year of the Doha’s commitment period, with the risk of generating further surplus AAUs, should an Annex B party perform below its assigned target by 2020.[2]

The question as to whether Annex B state parties can use surplus AAUs under the PA’s NDC framework [3] is a matter of interpretation of the PA and related CMA decisions only. Under international law the PA is a separate treaty from the Kyoto Protocol. While many provisions of the PA make direct reference to or create linkages with the UNFCCC, the same treaty does not refer to the Kyoto Protocol in any manner. The PA also lacks provisions related to conflict of rules and other relationships with other treaties. As a result, the rights and obligations which an Annex B state has assumed under the KP are not directly actionable under the PA.[4]

With reference to the PA NDC framework, two sets of obligations and processes are key to understand whether an Annex B party is prohibited from including surplus AAUs to prove the implementation of the NDC under the PA.

a)     Using carried-over AAUs in communicating and accounting for NDCs

Firstly, the potential use of AAUs is relevant under the emerging accounting modalities and practices which states can use to provide information on the implementation of NDCs under the PA’s enhanced transparency framework.[5] Historically, the UNFCCC regime has offered flexibility to state parties on the modalities to account for their GHGs emissions.[6] However the most recent decision of the CMA1-3 has adopted a Guidance on accounting for GHGs emissions and removals related to NDCs.[7] All state parties are expected to use this Guidance in their accounting and reporting of emissions, apart from their first NDC.[8] The Guidance asserts that parties account for their emissions according to the IPCC guidelines[9] and in line with the rules on the enhanced transparency framework contained in Decision 18/CMA.1.[10]

With reference to the use of AAUs as accounting units in the Guidance, the following provisions are determinant:

“(b) Parties whose nationally determined contribution cannot be accounted for using methodologies covered by IPCC guidelines provide information on their own methodology used, including for nationally determined contributions pursuant to Article 4, paragraph 6, of the Paris Agreement, if applicable;

(c) Parties that draw on existing methods and guidance established under the Convention and its related legal instruments, as appropriate, provide information on how they have done so.”[11]

According to the first provision, it appears that a state could adopt a different methodology from that used under the 2006 IPCC Guidelines, should there be reasons that practically bar its applicability in the context of an NDC. A state willing to use carried-over AAUs for its accounting and reporting could offer the following argument: given its current use of KP accounting and reporting,[12] and the possible existence of an internal emissions trading scheme or future Internationally Transferred Mitigation Outcomes (ITMOs) cooperation,[13] it would not be practical to use the 2006 IPCC Guidelines alone, but to integrate them with KP units accounting, including AAUs transfers.[14]

A similar, and perhaps stronger, argument could be based under the second provision of the quote above. A state could justify the same accounting and use of carried-over AAUs by claiming that it is drawing “on existing methods and guidance under the Convention and its related legal instrument”, in this case the Kyoto Protocol and related accounting guidance.[15]

b)     Using carried-over AAUs under Internationally Transferred Mitigation Outcomes (ITMOs)

Under Art.6(2-3) of the PA, all states can use ITMOs to achieve NDCs.[16] Although the latest CMA has not yet come with a decision on their specific modalities, it appears that ITMOs might also consist of voluntary marked-based schemes between states, either carbon markets (e.g.  the EU ETS) or voluntary carbon crediting mechanisms (e.g. the CDM).[17] With this assumption, two or more Annex B parties of the KP could potentially set up a voluntary ITMO mechanism where AAUs could be recognised as valid units to prove the implementation of their respective NDC targets. An example is the EU ETS, whose registry is linked with the one established under the KP, allowing states to simultaneously transfer EU ETS allowances and AAUs.[18] Under such instance, states could also allow under their voluntary ITMOs to use and transfer carried-over (surplus) AAUs from previous commitment periods under the KP. However, in the absence of a CMA decision on Art.6 mechanism, it is still uncertain whether this will be allowed.

In essence, therefore, carried-over (surplus) AAUs could be used by KP Annex B states in the following cases: a) either by means of accounting emissions to demonstrate the implementation of an NDC; and b) depending on future CMA decisions, under future voluntary ITMOs, whose ‘transferred outcomes’, including surplus AAUs, could be used to prove the implementation of a country’s NDC.

Legal implications of using AAUs under the PA

The use of surplus AAUs under the framework of accounting and implementing NDCs is problematic, because it allows to bank avoided emissions of the past for the future compliance. In terms of its ‘legal implications’, the following points could be offered against such practice:

a)     First, the practice could affect the required increased ambition of future NDCs [19] because it would artificially lower the contingent target of future progress.

b)     Consequentially, this could go against the purpose of the enhanced transparency framework, whose scope is to provide “clarity and tracking of progress towards achieving Parties’ [NDCs]…”[20]; and eventually “build mutual trust and confidence for the effective implementation” of the PA.[21]

c)     Furthermore, if surplus AAUs are to be used under future ITMOs, this could raise issues of environmental integrity and double accounting,[22] since these units would represent avoided emissions in the past by one country, which would then be used in the future by another country to account for emissions and prove the implementation of its NDC.

d)     Finally, the COP has already promoted “the voluntary cancellation by Party and non-Party stakeholders, without double counting of units issued under the Kyoto Protocol, including certified emission reductions that are valid for the second commitment period.”[23] Therefore, the practice of using surplus AAUs for NDCs’ implementation would go against the political aspiration already indicated by the COP.


[1] Dec 1/CMP.8, paras 5-6
[2] See for instance Australia’s Climate Change Authority website confirming the use of AAUs during the KP second commitment period:
[3] Referring here to accounting under Art.4(13) and reporting 13(7)(b).
[4] In accordance with the 1969 Vienna Convention on Law of Treaties, Art. 26 and 30.
[5] PA, Art.4(13); and art. 13(7)(b).
[6] Apart from the Kyoto Protocol rules and guidelines for Annex B parties. Yamide Dagnet and Kelly Levin, ‘Transparency (Article 13)’ in Daniel Klein et al (eds), The Paris Agreement on Climate Change: Analysis and Commentary (OUP, 2017) 301, 314.
[7] Decision 4/CMA.1, Annex II,
[8] See Decision 4/CMA.1, para 13; and Decision 1/CP.21, para 98. Dagnet and Levin, however, claim that state parties ‘may choose’ to use the accounting guidance: (n 5) 314.
[10] Decision 4/CMA.1, Annex II, para 1(a).
[11] Ibid.
[12] See UNFCCC, Kyoto Protocol Reference Manual, 2008,
[13] PA, Art.6.
[14] This would feature in the ‘Information to facilitate clarity’ under Decision 4/CMA.1, Annex I, para5.
[15] n(12).
[16] Dec 18 CMA.1, Annex, para 64(f), confirms that states must declare if they intend using ITMOs to achieve their NDC.
[17] Andrew Howard, ‘Voluntary Cooperation (Article 6)’ in Daniel Klein et al (eds), The Paris Agreement on Climate Change: Analysis and Commentary (OUP, 2017) 178, at 185. A crediting mechanism under ITMOs will be different from the Sustainable Development Mechanism under PA Art 6.4, as the latter is centrally established under the treaty, while the former are voluntary schemes, likely to be established under other treaties or agreements.
[18] EU Directive/87/2003, Consolidated version, Art.19,
[19] PA, Art. 4(3)
[20] Decision 18/CMA.1, para 1
[21] PA, Art.13(1).
[22] PA, Art.6(2).
[23] Decision 1/CP.21, para 107.