Synthesis

This chapter brings together all the previous ones. Based on the detailed presentation and analysis of the MRV requirements of so many different carbon pricing and management mechanisms – hereafter “carbon pricing mechanisms,” it synthesizes and compares how they answered to the five cross-cutting questions identified in the general introduction to the book:• What are the MRV requirements? • What are the costs for entities to meet these requirements? • Is a flexible trade-off between requirements and costs allowed? • Is requirements stringency adapted to the amount of emissions at stake (materiality)? • What is the balance between comparability and information relevance? MRV requirements across schemes The first cross-cutting question – what are the MRV requirements? – is too large to be answered in a synthetic way. This section thus focuses on two components of this question that have a major impact on MRV costs: requirements pertaining to third-party verification and those pertaining to monitoring uncertainty. Verification requirements are broadly similar across the board Most carbon pricing mechanisms impose a verification of the reports by an independent third party. Verification requirements are broadly similar across carbon pricing mechanisms:• the third party must be accredited by a regulator for GHG emissions audits and this accreditation tends to be sector-specific; • the third party must assess whether the methods used and the reporting format comply with the relevant guidelines; • the third party must assess the accuracy, i.e., the absence of bias, of the reported figures; • the regulator is allowed to question the opinion of the auditor, but seldom does so;• the third party tends to be paid directly by the verified entity. Although this creates a potential conflict of interest, the risk of losing the accreditation is a much stronger incentive and keeps auditors from being complacent with their client (Cormier and Bellassen, 2013).