Visibility of carbon market approaches in greenhouse gas inventories

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Under the Paris Agreement, Parties must track the implementation and achievement of their nationally determined contributions (NDCs). In many cases, NDC targets are expressed as a greenhouse gas (GHG) emissions level and their implementation and achievement is tracked through national GHG inventories. To achieve their targets, it is thus essential for countries that the effects of mitigation measures are visible in their inventories. Inventory visibility is understood as the degree to which a change in GHG emissions or removals resulting from mitigation actions is reflected in GHG inventories. Inventory visibility can be assessed by identifying which emission sources and gases are affected by a mitigation action, determining the minimum inventory methods required for reflecting the related emission reduction, and identifying the completeness of and methods used by the current GHG inventory. In addition, it is useful to identify potential differences with the quantification approaches used under carbon market mechanisms. Inventory visibility is found to be generally high for measures that reduce CO2 emissions from fossil fuel combustion, while in parts of the industrial processes sector and in the forestry sector there is a higher risk that emission reductions are not visible. An analysis of the portfolio of Clean Development Mechanism projects shows that for most projects this risk is low; only 8% of the carbon credit supply potential is assessed to have a medium risk and 5% is assessed to have a high risk. However, as future carbon market mechanisms under Article 6 of the Paris Agreement may need to tap more into project types with medium to higher risk of non-visibility, national GHG inventory systems may need to be strengthened to assure visibility of mitigation projects.