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Overview
Voluntary efforts to reduce emissions of greenhouse gases prior to the commencement of
a mandatory commitment period can slow the rate of growth of emissions and contribute
to the longer-term goal of achieving appropriate greenhouse gas concentration levels. In
circumstances where there is marginal value in an emission reduction investment,
granting credit may provide the incentive for such investments.
Companies that have already taken action or are contemplating doing so want to ensure
that these contributions are not ignored when a mandatory phase of emission reductions
begins. Failure to recognize these contributions could unfairly force companies to make
reductions through increasingly more costly options. This would have the perverse effect
of penalizing those companies who act early, while potentially benefitting competitors
who save their least costly reductions to respond to regulatory mandates.
Industry's aim is to ensure that these early investments that result in emission reductions
are recognized and "credited." Such credit could be used to offset future obligations that
may arise from any domestic allocation, cap, tax or permit program or sold to parties
unable to meet their obligations in a cost-effective manner.
It should be noted that credit for early action programs could have important linkages to
potential domestic or international emissions trading systems and international flexibility
mechanisms such as Joint Implementation and the Clean Development Mechanism. For
example, a company might earn credits through the Clean Development Mechanism prior
to 2008 and want to apply them against domestic obligations. Or a "downstream"
company may accrue early credits and not be allocated a budget. It would therefore want
the right to trade such credits either domestically or internationally.
ICCP Credit for Early Action Principles
Credit for early action programs will require new statutory authority. Failure to enact a
credit program at the Federal level may stop companies from making commitments now
and encourages a patchwork of inconsistent Federal, state, and local initiatives.
No limit should be placed on the amount of emissions reductions or enhancement of sinks
for which early action credit can be earned.
Credit should be granted for actions resulting in verified emissions reductions or
enhancement of sinks that occur between 1990 and the beginning of any official budget
commitment period, whether or not such actions were part of a government-sponsored
voluntary initiative.
A process should be established to determine and "lock-in" appropriate baselines for
emission reduction activities including facility operations, product-based initiatives, and
enhancement of sinks. Such a process should be flexible enough to reflect special
circumstances, including unique considerations related to reductions already achieved.
Credits granted prior to a first budget commitment period should be available without
discount as offsets against any greenhouse gas emission allocation, cap, tax, permit, or
other requirement to limit or reduce greenhouse gas emissions that subsequently may be
imposed.
Credits granted prior to a first budget commitment period should be usable in any
national emission budget that may be subsequently imposed. Credits should remain with
the earning entity for use at their discretion.
Emissions reductions or enhancement of sinks produced from participation in the Clean
Development Mechanism, Joint Implementation, or a domestic emissions trading program should
be eligible for early action credit if they occur prior to a first budget commitment period.
Credits generated from credit for early action programs should be eligible for emissions
trading.
Credit accounts should be updated on an annual basis.
Credit programs should be integrated to ensure consistency and to avoid "double counting".
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Copyright © 2001-2005 The International Climate Change Partnership
E-mail info@iccp.net.
Maintained by webmaster@iccp.net.
Jul 2, 2005.
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