Optimising markets: Sustainable Development Initiative (SDI)
Gold Standard is part of the Sustainable Development Initiative, advocating for strong sustainable development provisions in Article 6 of the Paris Agreement
The SDI works with Parties and other stakeholders to advocate for and raise awareness on the opportunities associated with strong sustainable development provisions in Article 6. It does this through a combination of Party driven policy dialogue, piloting of approaches, and outreach activities to relevant carbon market players.
1. Background
Global goals for climate change and sustainable development (SD) were reached in two historical agreements in 2015; the Paris Agreement to limit global warming to well below 2°C and the United Nations 2030 Agenda to achieve 17 Sustainable Development Goals (SDGs). The political aspiration for a transformational change to low carbon and sustainable development is recognised in both agreements.
The Paris Agreement indicates a political change towards an enhanced focus on sustainable development as a means to raise ambition for climate mitigation. This is a change away from the Kyoto Protocol era, where sustainable development was mentioned to reassure Parties that climate mitigation should not conflict with development aspirations.
“Provisions for sustainable development in Article 6 of the Paris Agreement are essential if we are to keep global temperature rises well below 2°C and meet the ambitions set out in the SDGs.”
2. Why operational SD Provisions in Article 6 are important
There are four reasons why operational sustainable development provisions in post-2020 mechanisms are important:
- Public acceptance of market mechanisms depends on strong safeguards and real sustainable development benefits;
- Sustainable development is a primary lever for raising climate ambition. The assessment and the recognition of sustainable development benefits of mitigation actions is very often a prerequisite to unlock host country ownership and ensure, these actions receive long-term support;
- Quantifying and valuing sustainable development impacts can unlock much needed private sector funding and can lead to higher market value of units;
- International guidance on sustainable development is already available (Agenda 2030) and endorsed by 193 countries; synergies can be derived from aligning sustainable development approaches in Article 6 of the Paris Agreement with global and national level Agendas 2030.
3. Advocating for sustainable development provisions in Article 6
3.1 SDI Recommendations for SD Provisions in Article 6
September 2021 - POSITION PAPER TO INFORM COP26 NEGOTIATIONS ON ARTICLE 6 OF THE PARIS AGREEMENT
Read full position paper and text recommendation
While the references included to date in adopted and draft CMA Decisions are welcome and should be preserved, the SDI recommends that final decisions go further, in particular by committing to undertake further work to develop tools and approaches to ensure the promotion of sustainable development can be rigorously and consistently monitored and reported. Doing so can help to ensure that the promotion of sustainable development is genuinely integrated into the design of activities and information is available for host countries and other stakeholders.
October 2019 - COP25 POSITION PAPER
Read the full position paper for COP25
The negotiations at COP25 aim to conclude the rulebook on Article 6. The rulebook is an important opportunity to establish a framework for the required knowledge sharing on tools and approaches to promote SD in Article 6. The SDI is recommending the launch of a work programme to develop a voluntary tool or approach that addresses SD assessment.
June 2019 - commentary on the current state of sustainable development provisions in the Article 6 'rulebook' negotiations following the 50th Meeting of the Subsidiary Bodies to the UN Climate Convention in Bonn, Germany see Commentary - current state of SD provisions in Article 6.
December 2018 - COP24 POSITION + RECOMMENDATIONS
View COP24 Text Recommendations for SD provisions in Article 6
For the text recommendations presented to Parties and stakeholders during workshops and a series of roundtable discussions held at COP24 in Katowice. For previous text proposals developed by the Dialogue see SD Dialogue_Text Proposals_COP 24. For more information on the rationale for the recommendations proposed for COP24, see the full position paper published in the Carbon Mechanisms Review #3 October 2018.
3.2 Implementing sustainable development under Article 6
As well as informing UNFCCC negotiations, the SDI publishes knowledge products to support the implementation of Article 6 activities in a way that promotes sustainable development.
Co-operating for the SDGs: Article 6 through a Sustainable Development Lens
Following the adoption of Article 6 guidance at COP26, the SDI has published Cooperating for the SDGs: Article 6 Through a Sustainable Development Lens. This guide outlines how countries hosting Article 6 activities can maximise the sustainable development benefits of activities for their local citizens, communities and natural environment.
Promoting Sustainable Development through Article 6 – The Role of Bilateral Agreements
Cooperation under Article 6 of the Paris Agreement is expected to be based not only on guidance adopted at the UN-level, but also bilateral agreements between governments. As well as providing a legal framework for cooperation, these bilateral agreements provide an opportunity for governments to set a higher bar for activities generating mitigation outcomes. The SDI has published recommended provisions for governments to include in future bilateral agreements, to underpin the promotion of sustainable development and ensure robust safeguards.
This paper assesses the incorporation of sustainable development provisions into the design of two pilot activities to inform early development of activities under Article 6. It also tests the applicability of tools + guidance, such as the SDI Good Practice Guidance.
Building on work to date SDI has published Good Practice Guidance for the Preliminary Assessment of Sustainable Development in Article 6 actions. These include the key areas to consider in robust activity design, implementation and Monitoring, Reporting and Verification (MRV), helping ensure climate action delivers real progress to the Sustainable Development Goals (SDGs).
SDI Assessment of Sustainable Development Approaches for use in Article 6
In 2019 the SDI examined existing sustainable development impact assessment tools and approaches for use in Article 6. The results are published in the report “Assessment of Sustainable Development Approaches for use in Article 6”. The report concludes that further research and testing of approaches is needed to drive the use of best practice tools and approaches and build knowledge and experience on benefits associated with credible SD impact assessment.
Policy Briefs
The following series of Policy Briefs were published in fall of 2018, summarising outcomes of a series of sustainable development dialog workshops with Parties and other stakeholders held under Chatham House rules since July 2017.Please note, views stated in these documents are those of the authors and do not represent any consensus among the Parties involved.
1. SUSTAINABLE DEVELOPMENT AND GOVERNANCE IN CONTEXT OF THE UNFCCC PROCESS
Rationale and recommendations for sustainable development provisions compatible with the national prerogative in Article 6 of the Paris Agreement.
2. SAFEGUARDING PRINCIPLES AND DO-NO-HARM APPROACHES FOR CLIMATE ACTION
Best practice, tools and guidance for safeguarding principles and do-no-harm assessments of climate actions and relevant considerations for negotiations under Article 6 of the Paris Agreement.
3. SUSTAINABLE DEVELOPMENT IMPACT ASSESSMENT OF CLIMATE ACTIONS
Best practice, tools and guidance for sustainable development assessment of climate actions and relevant considerations for Article 6 of the Paris Agreement.
4. CRITERIA FOR SUSTAINABLE DEVELOPMENT AND HOW TO USE THE SUSTAINABLE DEVELOPMENT GOAL (SDG) FRAMEWORK
Defining criteria for sustainable development nationally and using the SDG framework for implementation of Article 6 of the Paris Agreement.
5. SUSTAINABLE DEVELOPMENT STAKEHOLDER CONSULTATION
Ensuring the consultation of relevant stakeholders when implementing activities under Article 6 of the Paris Agreement.
6. TRANSPARENCY AND REPORTING FOR SUSTAINABLE DEVELOPMENT
Transparent reporting of sustainable development elements within voluntary cooperation of Article 6 of the Paris Agreement.
4. Related resources
Mainstreaming sustainable development in carbon markets
Sustainable Development Provisions in the Rulebook Drafts of the Art. 6 Paris Agreement
SDI Assessment of Sustainable Development Approaches for use in Article 6
5. About the SDI
The Sustainable Development Initiative (SDI) for Article 6 aims at promoting strong provisions on sustainable development for the rulebook and implementation of Article 6. The initiative is a collaboration of UNEP Copenhagen Climate Centre and the Gold Standard Foundation supported by Finland, Germany, Norway and Sweden in 2021-22.
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