Discussion on the Treatment of Reversals under Paris Agreement Article 6.4

This article is an automatically translated version of the original Japanese article. Please refer to the Japanese version for the most accurate information.

This is a newsletter from sustainacraft Inc.

Methodology Updates is a series that covers methodologies for carbon and biodiversity credits. This time, we will explain the draft standard for addressing "non-permanence / Reversal" being discussed under the Paris Agreement Article 6.4 mechanism, and the public comments received regarding it.

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Introduction: Balancing Rigor and Feasibility

As the development of operational rules for the Paris Agreement Article 6.4 mechanism progresses, how to strike a balance between the rigor of the standards and project feasibility has become a major topic of debate. In particular, the approach to addressing "Reversal" (the re-release of carbon that was once sequestered) in Carbon Dioxide Removal (CDR) projects is a critical issue directly impacting practical project costs and financing feasibility.

Last month, the draft standard for addressing reversals under the Article 6.4 mechanism was published, and public comments (hereinafter, PubComs) were solicited. In response to this, many concerns were expressed, particularly by Project Developers and research institutions involved in NbS (Nature-based Solutions) such as forest conservation. The fact that over 100 comments were submitted this time highlights the significant impact, especially compared to the few comments received on the baseline standard draft introduced in a previous newsletter.

Among the various opinions received, this article focuses on the views of Ms. Streck, CEO of Climate Focus, and her colleagues. Ms. Streck is a researcher who has long studied REDD+ and Voluntary Carbon Markets. Climate Focus is also one of the organizations involved in creating Verra's latest REDD+ Methodology, VM0048.

As will be explained later, the current draft presents two approaches with differing levels of rigor, and the majority of the MEP (Methodology Expert Panel, the group of experts responsible for the draft) supports the more stringent approach. In contrast, Ms. Streck stated the following in her SNS post and expressed strong concerns about the proposal supported by the MEP majority.

"The 'majority' draft exhibits significant sector bias and, as a result, represents a blatant attempt to effectively exclude traditional Nature-based Carbon Dioxide Removal (CDR) projects from Article 6.4. This is extremely problematic because Nature-based CDR is: (A) indispensable for achieving the Paris Agreement's goals, and thus for ensuring alignment with the Agreement's long-term temperature goal; and (B) chronically underfunded. Furthermore, (C) equity considerations are also crucial. Effectively excluding Nature-based approaches and NbS (Nature-based Solutions) from Article 6.4 will virtually eliminate opportunities for Indigenous Peoples and Local Communities (IP&LCs) to benefit from Article 6.4 and significantly impair the ability of Least Developed Countries to benefit from cooperative approaches."

This argument is thought to be highly insightful. Since Climate Focus has also formally submitted its comments to the PubComs, this article will introduce the key issues of the new draft, referencing the PubComs submitted by Climate Focus (hereinafter, CF Comments).

Note: Please note that sections below referring to the overall trend of PubComs are based on automated analysis by a large language model and may contain errors or omissions.

Main Issues of the Draft and Content of PubComs

Breakdown of PubCom Participants

Before delving into the specific content, let's briefly look at the breakdown of organizations that submitted comments. A total of 109 comments were received this time. In a rough classification, they are as follows in descending order:

• Project Developer: 33 submissions
• International organizations / NGOs: 32 submissions
• Universities / Research institutions: 12 submissions
• Finance: 10 submissions
• Environmental consulting: 8 submissions
• Government agencies: 7 submissions
• Others: 7 submissions

Regarding Project Developers, the majority appeared to be developers of NbS projects. Many government agencies were ministries corresponding to national environmental ministries or forestry agencies and are likely entities promoting NbS, such as REDD+. For finance, many organizations involved in carbon finance were observed.

Overall Picture: Two Conflicting Approaches

Draft

First, a characteristic feature of this draft is that opinions within the MEP were not unified, and two alternative proposals were published side-by-side. Specifically, it describes the following two approaches and addresses the issues for each in the cover note at the beginning of the document.

• Approach 1 (Annexes 1 & 2, MEP Majority Proposal): A more detailed and stringent proposal, consisting of standards for Methodology Developers (Annex 1) and standards for Project Participants (Annex 2).
• Approach 2 (Annex 3, MEP Minority Proposal): A relatively simpler proposal, consolidated into standards for Project Participants. It does not include procedures for Methodology development.

PubComs

The MEP adopted a policy of soliciting opinions through PubComs on which approach was preferable. In response, CF Comments pointed out that it is undesirable for the MEP to delegate judgments on such major policy matters to PubComs in the first place. Furthermore, from CF's perspective, which promotes NbS, Annexes 1 & 2 are fundamentally unacceptable from the standpoint of promoting NbS projects, and that Annex 3 should be used as the basis. However, it also noted that Annex 3 has many areas for improvement and partially recommended approaches from Annexes 1 & 2.

Analyzing the overall trend of PubComs, Approach 2 has received overwhelming support. Organizations that supported Approach 1 were mainly universities and some NGOs, citing scientific rigor and robustness as reasons. Organizations that supported Approach 2 included a wide range of stakeholders such as Project Developers (NbS), financial institutions, many NGOs, and several government agencies. These organizations strongly expressed concern that requirements in Approach 1, such as indefinite monitoring (to be explained in a later section), are unrealistic and could effectively exclude Nature-based projects from the market. They evaluate Approach 2 as a more practical and balanced starting point.

Hereafter, we will specifically examine three points within the draft that are considered significant barriers to project implementation (especially for NbS).