Climate Change (Management) (Carbon Market) Regulation 2023 National Stakeholders Validation Workshop – 18th August, 2023

Under the support of the United Nations Climate Change Secretariat, members of its Conference of Parties (COP) agreed that nations would take actions to limit emissions of greenhouse gases (carbon dioxide, methane, nitrous oxide, and various fluorinated gases, often conveniently lumped together as “carbon”) to keep global temperatures from rising, ideally by no more than 1.5 degrees. Meeting this goal requires global annual carbon emissions to be cut by 50 percent by 2030 and reduced to net-zero by 2050.

Article 6 of the Paris Agreement recognizes that some Parties may choose to pursue voluntary cooperation in the implementation of their Nationally Determined Contributions to allow for higher ambition in their mitigation and adaptation actions and to promote sustainable development and environmental integrity. Article 6 of the Paris Agreement contemplates three broad mechanisms: (I) cooperative approaches on a voluntary basis (Article 6(1)–(3)); (II) a mechanism to contribute to the mitigation of greenhouse gases and support sustainable development (Article 6(4)–(7)); and (III) a framework for non-market approaches (Article 6(8) and (9).

Cooperative Measures is a decentralised mechanism that allows voluntary bilateral and multilateral linkages of markets, for example, into a “carbon club.” These linked markets may be able to trade internationally transferred mitigation outcomes (“ITMOs”) in a manner supported by robust accounting to avoid double counting.

ITMOs are wider than the Kyoto Protocol concept of assigned amount units. We assume the generic nature of an ITMO is aimed at capturing multiple types of emission rights that may be the basis of the linkages established by two or more participating countries. Japan’s current approach of signing bilateral offset agreements with certain countries may fit within this cooperative approach Compiled by the Climate Change and Development Authority – Carbon Markets Regulation Team 2022 framework. Albeit stating the obvious, Cooperative Measures, like ‘networking’, has no relevance to domestic mitigation actions or their outcomes until such time as a decision is made for the ITMOs (that the action or outcome in question represents to be transferred internationally). It is worth noting that there is nothing in the short description of an ITMO that would preclude the use of Cooperative Measures to apply to units/outcomes emanating from mechanisms or markets that are both within the authority of the COP (e.g., REDD+)/Compliance as well as outside the authority of the COP (e.g., EUAs under the EU ETS via its link with Switzerland2)/ Voluntary.

Furthermore, there is no qualitative requirement (e.g., additionality) in this mechanism which, conceptually, does not create a limitation on the type of ITMO available for international transfer. While PNG plans on implementing the compliance carbon markets under Article 6 of the Paris Agreement, it is also faced with the challenge of the influx of projects that intend to pursue voluntary carbon markets (VCM). PNG, through the Climate Change and Development Authority (CCDA) therefore is tasked to address the authorization approval process hence the development of the Climate Change (Management) (Carbon Market) Regulation 2022.

The objective of the National Stakeholders Validation Workshop is to:
• Present the final draft of the Climate Change (Management) (Carbon Markets) Regulation 2023
• Validate the Climate Change (Management) (Carbon Markets) Regulation 2023

The expected outcome of the National Stakeholders Validation Workshop is to;
• Have the Climate Change (Management) (Carbon Markets) Regulation 2023 validated by the esteemed stakeholders;