Loopholes (Newsletter #18)
Our recent CDM Watch briefing paper looked at the cumulative impact of loopholes on emission reduction pledges countries have made. Our calculations show that pledges are small enough to fall right through current loopholes. Without swift action, we’re heading off the path of 2 degrees warming and hurtling towards 4 degrees of warming.
We like this cartoon so much that we thought we’d write an article to go with it! While in Durban, we followed the ‘numbers’ negotiations where countries discussed the rules on how much they’ll actually have to reduce their emissions, given what they pledged to do. Not to put too fine a point on it – the pledges aren’t for very much and we are heading straight towards 4°C warming by the end of the century if we don’t change this fast. Here is a slightly more technical explanation:
To date, 42 developed countries (Annex 1) have submitted pledges. Fulfilment of the developed country pledges is projected to reduce emissions by up to 4 billion tons (Gt) CO2e in 2020 from ‘business as usual’. This is about one third of the estimated 12 GtCO2e of emissions reductions needed to remain on a path consistent with keeping warming below 2°C (UNEP 2011). Unfortunately, weaknesses in international emissions accounting could substantially weaken these already insufficient pledges, negating much (if not all) of their intended emissions benefits.
According to our calculations, based on several sources including the UNEP reports, these loopholes could be between 14.5 and 27.2 Gt of CO2e (see figure). If all of these credits are used they could more than negate the current A1 pledges. The worst case scenario is that these loopholes could provide significantly more permits than Annex 1 countries would need to technically fulfil the current pledges. This means that current loopholes could leave A1 countries with sufficient allowances and credits to continue along a business-as-usual trajectory. It could even enable the carry over of surplus allowances beyond 2020, continuing to undermine the environmental integrity of the climate regime.
Table 1: Loopholes and their estimated sizes (low to high)
Total estimated size of loopholes 2013- 2020 in Gt CO2e
|Hot Air – surplus allowances (AAUs) from the first commitment period||
9 – 13
|LULUCF weak accounting rules||
0 – 6.4
|CDM credits that do not represent real emissions reductions.||
0.7 – 3.3
|Double counting of emissions reductions||
0.6 – 1.6*
|Bunker fuels: emissions from International aviation and shipping||
4.2 – 4.5
|Combined effect of these loopholes||
14.5 – 27.2
*Only for 2020
Our analysis offers a slightly new way of looking at a problem that others have analysed for a long time.  A cumulative approach is a simple way to visualise and comprehend the size of the current loopholes compared to the pledges that have been made by A1 countries. More importantly, scientists have calculated that cumulative carbon emissions by 2050 cannot be more than 890 billion tones of CO2 if we want to have an 80% chance of staying below 2°C warming (Meinshausen et al 2009). Over 400 billion tons have already been emitted between 2000 and 2011 – leaving a remaining budget of approximately 490 billion tons. It is important to set the reduction pledges and the loopholes in context with the overall carbon budget. The estimated increase in cumulative emissions that the loopholes could enable represents 3-6% of the remaining carbon budget.
Strong action is required now to quickly close these loopholes if we want to have a chance of staying below 2°C warming.
 See for example: Kartha, S. and Erickson, P. (2011). Comparison of Annex 1 and non-Annex 1 pledges under the Cancun Agreements
UNEP (2011). Bridging the Emissions Gap
WWF International (2010). Plugging the Gap. An Easy Guide To A Safe Climate Future
15 Nov 2017
Response to impact assessment of the carbon leakage list for the period 2021-2030
9 Nov 2017
Failure to align Europe’s carbon market with Paris goals adds pressure on governments to price pollution
3 Nov 2017