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INSIGHTS | POLICY FORUM

ance entities, one in each of the linked juris- Our analysis, based on case studies of vari- tiating tracks—such as the Talanoa dialogue,
dictions, engage in an exchange, for example, ous types of heterogeneous linked systems, to take stock of collective efforts of parties—
permitting allowances to move between cap- reveals common themes (3). What emerges or the enhanced transparency framework un-
and-trade systems. is the importance of guidance on Article 6.2 der Article 13 of the Paris Agreement.
Linkage is relatively straightforward when that sets out a robust accounting framework Clear and consistent guidance for ac-
policies involved are similar. But there are to prevent double counting of GHG reduc- counting of emissions transfers under Ar-
several potential sources of heterogeneity: tions, to ensure that the timing (vintage) of ticle 6.2 can contribute to greater certainty
type of policy instrument (e.g., taxes, cap- claimed reductions and respective ITMO and predictability for parties engaged in
and-trade, performance or technol- voluntary cooperation, facilitating
ogy standards); level of government expanded use of linkage. Too much
jurisdiction involved (e.g., regional, Transferring mitigation outcomes guidance, however, particularly if it
national, subnational); status un- Rather than reduce its greenhouse gas (GHG) emissions to meet its includes restrictive quality or am-
der the Paris Agreement (that is, original target, country A cooperates with country B, which can reduce bition requirements, might impede
whether or not the jurisdiction is emissions at lower cost. Incentivized to reduce emissions, country B sells linkage and dampen incentives
a party to the agreement or within part of its mitigation outcome to country A. Both targets are adjusted to for cooperation. Such a combina-
a party); nature of the policy target reflect the transfer, and country A meets its adjusted target at lower cost than tion of common accounting rules
(e.g., absolute mass-based emis- if it had reduced its own emissions. and an absence of restrictive crite-
sions, emissions intensity, change ria and conditions may accelerate
Financial transfer
relative to business-as-usual); and Country A Country B linkage and allow for broader and
operational details of the country’s more ambitious policy cooperation,
Mitigation outcomes
NDC (e.g., type of mitigation target, which can increase the potential
transfer
choice of target and reference years, for parties to scale up the ambi-
sectors and GHGs covered). Most tion of their NDCs. That may ulti-
forms of heterogeneity, however, Adjustment mately foster stronger engagement Downloaded from
do not present insurmountable ob- between parties (and non-parties),
stacles to linkage. Adjustment as well as with regional and subna-
In principle, the most straight- tional jurisdictions.
forward case of international cli- GHG emissions GHG emissions The parties to the Paris Agree-
mate policy linkage would be a ment will continue negotiations in
pair of national cap-and-trade sys- May, toward a goal of agreeing to a
tems in parties to the agreement, finalized rule book for Article 6 at
with each using an absolute (mass- Pretransfer Posttransfer Pretransfer Posttransfer the annual UNFCCC summit in Ka- http://science.sciencemag.org/
based) target in its NDC (for exam- towice, Poland, in December 2018.
ple, cap-and-trade systems in New Original target New target Decisions that the negotiators reach
Zealand and Switzerland). A less this year could greatly advance, or
obvious case would be a pair of subnational transfers is correctly accounted for, and to impede, international climate policy linkage
policies—one a carbon tax and one a cap- ensure that participating countries make and thereby play a key role in determining
and-trade system (for example, carbon tax appropriate adjustments for emissions or the fate of the Paris Agreement. j
in British Columbia, Canada, and cap-and- reductions covered by their NDCs when us-
REFERENCES AND NOTES
trade in Tokyo, Japan). Both policies can be ing ITMOs. Suggested approaches for ITMO
1. UNFCCC, “Paris Agreement—Status of Ratification”; http:// on March 1, 2018
designed to facilitate heterogeneous linkage accounting under Article 6.2 (3) include, unfccc.int/paris_agreement/items/9444.php [accessed 3
(6). Another case of heterogeneous linkage in particular, how to make adjustments to January 2018].
2. UNFCCC, “Kyoto Protocol”; http://unfccc.int/kyoto_proto-
might be between the EU emissions trad- national emission budgets to account for
col/items/2830.php [accessed 20 November 2017].
ing system and California’s cap-and-trade ITMOs and how to account for heteroge- 3. M. A. Mehling, G. E. Metcalf, R. N. Stavins, “Linking
program. All of these would be conceptually neous base years, different vintages of targets Heterogeneous Climate Policies (Consistent with the Paris
Agreement),” Discussion paper ES 17-6, Harvard Project on
feasible and merit consideration, although and outcomes, and transfers between parties Climate Agreements, October 2017.
each raises issues that require attention and and non-parties to the agreement. These is- 4. World Bank, Ecofys, and Vivid Economics, State and Trends of
Carbon Pricing 2016 (World Bank, Washington, DC, 2016).
call for specific accounting guidance, if link- sues were identified, if not yet resolved, dur-
5. UNFCCC, “Paris Agreement, Article 6” (UN, Paris, France,
age is to include the use of ITMOs under the ing the negotiations on Article 6.2 in Bonn. 2015), pp. 7–8.
Paris Agreement. As negotiators proceed to address them, they 6. G. E. Metcalf, D. Weisbach, Rev. Environ. Econ. Policy 6, 110
(2012).
can draw on a wealth of experience and ex- 7. W. Obergassel, F. Asche, “Shaping the Paris Mechanisms
A PATH FORWARD isting research (8–11). Future study should Part III: An Update on Submissions on Article 6 of the Paris
Agreement” (Wuppertal Institute for Climate, Environment,
Parties to the Paris Agreement are working expand on the specific conditions of account-
and Energy, JIKO Policy Paper 05/2017, 2017).
to elaborate guidance on Article 6.2 but have ing and ITMO transfers under the evolving 8. J. Jaffe et al., Ecol. Law Q. 36, 789 (2009).
expressed widely differing views on what is- architecture of the Paris Agreement. 9. M. Ranson, R. N. Stavins, Clim. Policy 16, 284 (2016).
10. D. M. Bodansky et al. Clim. Policy 16, 956 (2016).
sues to include (7). In Bonn, parties signaled An important insight from our analysis, 11. M. A. Mehling, “Legal Frameworks for Linking National
agreement on the need to offer at least mini- however, is that parties should exercise cau- Emissions Trading Systems,” in The Oxford Handbook of
International Climate Change Law, C. P. Carlarne, K. R.
mal guidance on how to account for transfers tion when developing guidance that goes be-
Gray, R. G. Tarasofsky, Eds. (Oxford Univ. Press, 2016), pp.
of ITMOs. Beyond that, however, positions yond accounting issues. Onerous conditions 261–288.
diverge on whether to address broader ques- related to the ambition or integrity of do-
ACKNOWLEDGMENTS
tions that bear on linkage under Article 6.2. mestic action, for instance, could deter link- GRAPHIC: K. SUTLIFF/SCIENCE
The authors acknowledge comments from S. Biniaz, D. Bodansky,
Particular divisions center around issues of age. This does not mean that such concerns C. Haug, C. Hood, and A. Marcu and financial support from the
environmental integrity, governance, and should be neglected; rather, they are best ad- Enel Foundation.
sustainable development. dressed under separate corresponding nego- 10.1126/science.aar5988
998 2 MARCH 2018 • VOL 359 ISSUE 6379 sciencemag.org SCIENCE
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