Compliance and Enforcement

Compliance and Enforcement

INECE adds value to compliance programs in developed and developing countries by identifying and sharing efficiencies in the national implementation of measurement, reporting, and verification (MRV) of GHG emissions, carbon markets and trading schemes, flows of financial support, and social and environmental impacts of climate-related activities.

Climate-related compliance and enforcement issues encompass four important areas:

1. Emission reductions – This involves assessment of the integrity of carbon and non-carbon emission reductions (ERs) undertaken in connection with the regulation of power-generating and industrial sources, transportation systems, and buildings, as well as from activities undertaken to create offsets to be used for compliance with regulatory systems. In order to have integrity, information on ERs must transparently and accurately include indirect greenhouse gas emissions resulting from shifting emissions elsewhere in time or place.

2. Mitigation support – The MRV of support requires compliance professionals to independently verify that loans and grant funds that have been formally committed for the financing of emission reduction efforts have been disbursed to the appropriate parties and have been used for the proper purpose.  It also requires verification that donor parties have followed through with commitments of technological and capacity building support and that those contributions have been properly used.

3. Carbon markets and carbon accounting – Compliance issues relating to carbon markets primarily concern scrutiny of actions and the transparency of information that impact price discovery in auctions and over the counter trades.  INECE monitors and analyzes instances of non-compliance and evaluates how those actions affect the market’s environmental and financial integrity.  When information is opaque, markets can be manipulated so that prevailing auction and spot prices do not reflect their proper value.

4. Social impacts – In order to be compliant with regulatory frameworks and international treaties, actions for mitigating climate change must occur in the context of sustainable development.  Sustainability includes both environmental and social dimensions.  Activities that reduce carbon emissions but cause social harms to local stakeholders, such as wrongful dispossession of property rights, cannot be legitimately recognized.

Key Activities & Publications