Challenge: Offshore Cooperation

For BC Net-0 LNG and other gas products to maximize their contribution to global GHG reductions, it needs to displace thermal coal or other more GHG intensive fuels.

Most of Asia has gas infrastructure, burns the most coal and emits the most GHGs. We are working with BC and Canada and proponents, some of whom are government agencies from Asia, to explore options for ensuring that BC LNG maximizes the reduction in GHGs by switching fuels in those jurisdictions from thermal coal and other more GHG-intensive fuels to clean BC LNG. Effective monitoring tools need to be developed and implemented to ensure that the gas-switching takes place.

We also need to secure international agreements to ensure that Internationally Tradeable Mitigation Outcomes (ITMO) credits are shared between BC and those who displace coal and other dirty fuels with BC LNG.

Article 6 of the Paris Agreement provides an international platform for emissions trading regimes. These emissions trading regimes will provide countries the flexibility to maximize their global GHG reductions through international cooperation. The rules that will support implementation of Article 6 have not been agreed to yet and there are many unresolved issues. Creating an effective approach to implementing and meeting the intent of Article 6 is very important to fully implementing the Paris Agreement and the 1.5ºC cap (click here for more on ITMOs).

A carbon trading agreement between Quebec and California is already in place - effectively, a pilot ITMO arrangement. Similar bilateral agreements are needed between BC and other jurisdictions. Federal ITMO arrangements between Canada and China, Japan, Korea and others are also needed.

The UN is managing the process for defining the rules for implementing Article 6, but signatories are not prevented from negotiating bilateral agreements now (through Section 6.2). The FNCI is working with BC and Canada to support negotiation of these arrangements.

The International Emissions Trading Association (IETA) has identified the Economic Potential of Article 6 of the Paris Agreement and Implementation Challenges. For a presentation on the recent COP25 conference and Article 6 progress (made to the FNCI by ITEA in December 2019) please click here.

For a general overview of carbon offsetting, click here.