Each year, the 43 Annex I countries submit an inventory of their greenhouse gas (GHG) emissions. This inventory includes around sixty sheets of calculations and several hundred pages detailing the methods used and sources of the underlying data.
Each year as well, these accounts are also audited by accredited experts. The UNFCCC Secretariat is responsible for coordinating audits, selecting auditors and developing tools to facilitate analysis of the innumerable columns of figures contained in the inventories.
Monitoring, Reporting and Verification (MRV) of countries’ emissions is therefore operational within the framework of the UN. This system is effective: for a modest cost – less than €1 million per year per country, or €0.002/tCO2e on average – it produces recent and reliable emissions data. Undoubtedly the penalties imposed by the Kyoto Protocol have played their part: the six countries whose inventories were at some point found deficient quickly made the necessary changes to continue their involvement in Joint Implementation and international emissions trading.
The MRV aspect of the Paris agreement can therefore be summed up in a single question: can this success be extended beyond Annex I countries to cover emerging and developing countries?
In principle, the chances are good. Unlike emissions reductions, MRV is a common good with no obvious tendency to tragedy. For a modest individual cost, it provides all participants with consistent and in-depth information. In practice however, things are not so easy. Opponent interest groups and negotiating stances have had time to take root in MRV, as in all old topics in the negotiation. These groups could block the reforms required for the extension of the MRV system to emerging and developing countries. There are three key elements to these reforms: introducing the concept of materiality, securing a budget to cover the whole audit process and developing a new incentive for countries to submit high-quality inventories.
Materiality means allocating resources in proportion to the size of emissions sources and the level of uncertainty. It is absurd, for instance, to dedicate the same resources to the 19 million tonnes of CO2e released by Slovenia as to the 6.5 billion released by the United States. Although materiality has made a hesitant appearance in reporting guidelines, it has been removed from those concerning verification. In both cases, the jury is still out on post-2020 since the guidelines only cover the period from 2013 to 2020.
The current budget for reviewing inventories does not cover the cost of auditors for Annex I countries, leaving countries to meet this expense. This partial budgetary allowance presents a conundrum in terms of mobilizing auditors. Furthermore, what is the logic behind asking Greece – with GDP of $200 billion – to pay for Greek auditors when those for China – with GDP of $4,900 billion – are paid for by the UNFCCC? Granting the Secretariat full management of the budget would also allow stricter requirements in terms of auditors’ efficiency and their judicial body, the Lead Reviewers’ Meeting.
With the current abandonment of flexibility mechanisms, countries’ only remaining incentive to provide high-quality inventories is their reputation –«name and shame». It would be reasonable to reinforce this by making inventory reviews clearer and more conclusive. Other incentives could also be created. One example would be making funding conditional – as adopted by REDD+ in Warsaw in 2013 – on ensuring MRV compliance with IPCC guidelines. Adapting the level of requirements to countries’ capacities, in terms of monitoring scope or reporting frequency, would be another.
MRV details for the post-2020 period will not be decided in Paris, where the draft resolution explicitly defers the details – e.g. rules on accounting, transparency, etc. – to subsequent conferences. Neither is it a question of reinventing the wheel, but rather of reforming the system so that it remains effective as part of a broader climate agreement. To achieve this, three principles should be adopted in Paris in 2015: materiality, fully autonomous management of the review by the Secretariat and incentives to submit high-quality inventories (including both carrots and sticks).
This post has been adapted from an editorial written for Climascope.
 Bellassen, V., Stephan, N. (Eds.), 2015. Accounting for Carbon: Monitoring, Reporting and Verifying Emissions in the Climate Economy. Cambridge University Press, Cambridge, UK.