The UN's climate arm the UNFCCC has further refined rules relating to greenhouse gas (GHG) leakage and emissions reduction baselines for generating credits under the Paris Agreement Crediting Mechanism (Pacm).
The mechanism's methodological expert panel drew up a draft standard on addressing GHG leakage at its fifth meeting last week, clarifying definitions such as "positive" and "negative" leakage, the "activity boundary" and "controlled" sources of GHG. The standard clarifies that the avoidance or minimisation of leakage only applies to negative leakage, even while avoidance of leakage is not possible in all instances. The standard will apply to both emission reductions and removals, and will focus on project-level activities, with a future version to address larger-scale activities such as national crediting programmes.
And a draft standard on setting the baseline against which emissions reductions are measured, to prevent over-crediting, outlined the importance of ensuring that the downward adjusted historical baseline of emissions is at least as low as the conservative business-as-usual scenario. The panel proposed future regular revisions of the standard to allow for advances in best available technology, or for mitigation actions implemented at larger and therefore more cost-efficient scales.
The panel also suggested some guidance may be needed to determine the scenario for certain types of carbon removal activities.
The two draft standards will be put to the Pacm regulator — the supervisory body of the mechanism's governing Article 6.4 of the Paris climate agreement — for adoption. The panel was set up in early 2024 after countries at the UN Cop 28 climate summit in December 2023 threw out the supervisory body's proposals for the mechanism.
The panel at its meeting also made progress on the concept of "suppressed demand", which must be taken into account by the Pacm to allow some increase in emissions to enable a host country's socio-economic development.
It agreed on the conservative level of 1,000kWh/per capita to "minimise" over-crediting.
The panel also progressed on addressing the non-permanence of emissions reductions, with a focus on instances of late, incomplete or missing monitoring reports, deciding on appropriate notification timing and relevant consequences.
And it continued work on revising methodologies from the Pacm's predecessor, the clean development mechanism (CDM). The Pacm's first credits will be from transitioned CDM projects. But from next year, all Pacm credits must adhere to their own methodologies.
The panel will next meet at the end of May. Stakeholders planning to propose new methodologies and methodological tools for consideration at that meeting must submit them by 21 April.
