Acronym’s abound in the UNFCCC process, and here’s another one…
O-M-G-E stands for “overall mitigation in global emissions.” Say what?! The mechanism referred to in Article 6.4(d) of the Paris Agreement: “shall aim to deliver an overall mitigation in global emissions.” Yes, it’s wonky. So, let us try again: This is a mandate to reflect on the hard lessons learned from the Clean Development Mechanism and for the Paris Agreement to go beyond offsetting. This is just what the planet needs as it is still reeling from the conclusions of the IPCC Special Report on 1.5°C. OMGE is a major opportunity that no negotiator should stand against.
We can do one better: if paired with a levy for share of proceeds for adaptation, requiring OMGE through “automatic cancellation” or “discounting” offers a one-two punch against climate change.
Some Parties get it already: OMGE is only achieved when a fixed percentage of emissions reductions is set aside and not used by anyone towards any target. In other words, these emissions reductions are for the greater benefit of the atmosphere, not for a specific entity or country.
We have heard several proposals during the week on how to achieve this. Unfortunately, some countries have foolishly suggested that a market will miraculously in itself deliver overall mitigation in global emissions. ECO wonders what they have learned from the Kyoto Protocol experience. While in theory, this could happen, it is by no means guaranteed that countries will apply the cost savings from market mechanisms towards more mitigation. In fact, the Kyoto market mechanisms often contributed to an increase in emissions by replacing domestic climate action with credits of little or no value to the atmosphere.
Others have suggested that setting more conservative baselines would help achieve OMGE. While this would lead to fewer credits being issued, the “extra” emissions would not benefit the atmosphere! They would be counted by the host country and could simply substitute other action. To be truly OMGE nobody should be able to claim this abatement.
“What about voluntary cancelation?”we hear you say… ECO is glad that Parties are considering voluntary cancelation of credits, as this would additionally allow Parties and non- Party actors like businesses to voluntarily cancel emissions units to help support countries in meeting their NDCs. This would encourage Parties to reduce emissions domestically, but if we want to truly achieve OMGE, then all ITMOs should be subjected to deliver it. Voluntary cancellation for countries alone would not be sufficient.
ECO has seriously considered all these options and urges Parties to consider the discounting and automatic cancellation options as providing a real way of going beyond offsetting, while ensuring predictability and stability for the private sector.
There could be complications in applying OMGE using the exact same method in Article 6.2 as in 6.4, but we cheer negotiators on to find a landing zone that works for the planet. The discounting or automatic cancelation approach to OMGE would truly benefit everyone, especially developing countries issuing credits. It will result in slightly higher prices for countries buying units, but will lead to more abatement overall, and higher predictability.
So, what is there not to like about discounting/ automatic cancellation? ECO doesn’t really know. But some countries who we would expect to be leaders — yeah that’s you Australia, New Zealand, Japan, EU, Canada, and others — are saying that OMGE through automatic cancellation does not need to apply to Article 6.2. This would tilt the playing field in favor of Article 6.2 by making the carbon market less regulated and more attractive to buyers thus harming any Article 6.4 mechanism.
In sum, OMGE through automatic cancellation and discounting across Articles 6.2 and 6.4, paired with a share of proceeds for adaptation, is important for the final deal under Article 6. Dear negotiators, let’s take it above and beyond for our planet!
