The role of international carbon markets in a decarbonising world

The goals of the Paris Agreement require countries to develop and implement long term strategies which chart out the fastest decarbonisation pathway technically feasible. The role of offsets in such a decarbonising world must shift from current practice to avoid undermining the ambition and meaning of net-zero targets. Read More

Offset credit supply potential for CORSIA

In this discussion paper we estimate the potential supply of carbon offset credits to meet demand from international aviation under CORSIA under a number of different scenarios which include different types of restrictions imposed on the eligibility of offset credits. Read More

Serious issues in the negotiations on international carbon markets (Article 6) must be addressed to avoid undermining the Paris Agreement

In this blogpost, the NewClimate markets team provides recommendations for the imminent SB50 negotiations to guarantee that Article 6 ensures its mandate to promote ambition and avoid undermining global climate efforts. Read More

Analysing the interactions between new market mechanisms and emissions trading schemes: Opportunities and prospects for countries to use Article 6 of the Paris Agreement

This report conducts a detailed analysis of the provisions related to market mechanisms of the Paris Agreement (Article 6), identifies issues that should be taken into account when elaborating the rulebook for the Paris Agreement, and answers the question whether different countries are ready for engaging with market mechanisms under the Paris Agreement. Read More

Carbon pricing options for international maritime emissions

In this paper we explore three different options for a market-based measure to address the climate impact of shipping: an offsetting scheme, a maritime emissions trading scheme, and a climate levy. We conclude that a climate levy would be the most appropriate measure to reduce emissions in the maritime sector. Read More

Robust eligibility restrictions for offset credits are needed for CORSIA to truly compensate for the growth in aviation’s carbon emissions

If airlines are allowed to use all available offset credits certified by programmes such as the UN’s Clean Development Mechanism and other voluntary standard bodies under a new global scheme to address international aviation emissions, the scheme will not truly compensate the sector’s growing CO2 emissions. To achieve the aviation scheme’s objective of carbon neutral growth, policy-makers must adopt robust criteria on the types of offset credits that are accepted. The rules should be designed to ensure that the scheme supports the development of new emission reduction projects or targets existing projects that would stop reducing emissions without further financial support. New research outlines the climate implications of various eligibility scenarios for offset credits. Read More

The future role of the Adaptation Fund in the international climate finance architecture

Parties will take important decisions about the future of the Adaptation Fund at COP 24 in Katowice, Poland. This paper provides recommendations for those negotiations specifically regarding the Fund’s operating modalities including future mobilization of sources of finance; safeguards; and governance. Read More

Crediting Forest-related Mitigation under International Carbon Market Mechanisms

This discussion paper explores environmental risks from the inclusion of forest offset credits in the Paris Agreement’s Article 6 and CORSIA, and examines approaches to address such risks. A number of challenges surrounding environmental integrity notably baseline determination, additionality, permanence, and leakage are discussed as well as environmental and social safeguards in forest mitigation initiatives. Read More

Opportunities and safeguards for ambition raising through Article 6

In this paper, we discuss the ambition raising implications to engage in voluntary cooperation under Article 6 for the originating Parties. The paper shows why Article 6 should focus on driving mitigation in otherwise inaccessible abatement options and why it is critical that support should only last for a limited time period, after which own action must kick-in. Read More

Discussion paper: Marginal cost of CER supply and implications of demand sources

In this discussion paper we estimate the marginal cost of supplying certified emissions reduction units (CERs) from projects that are currently registered under the Clean Development Mechanism (CDM). We develop a supply curve using data on the individual ability of projects to potentially supply CERs over the period up to 2020. We analyse changes to the supply curve based on a number of scenarios which restrict the eligibility of CERs based on the timing of emission reductions, the timing of project investment decisions and registration under the CDM, as well as an assessment of the extent to which projects are vulnerable to the risk of discontinuing abatement activities without CER revenues. Read More

Germany’s international cooperation on carbon markets: Status and prospects in select partner countries

This suite of four publications try to unpack the black box of where countries stand on their readiness to engage in Article 6 of the Paris Agreement. Article 6 lays down the vision for carbon markets under the Paris Agreement. The three standalone case studies on Ethiopia, Viet Nam and Ukraine discuss country-contexts on Article 6 readiness in an objective manner, looking at the enabling conditions in these countries, the feasibility to maintain robust accounting and MRV, and compatibility of their NDCs. Potential entry-points for international support to facilitate readiness are also discussed. NewClimate institute conducted this work along with partners Oeko Institute and adelphi through the generous support of the German Environment Agency (UBA). Read More

Discussion Paper: CDM Supply Potential up to 2020

Authored by NewClimate Institute, Lambert Schneider and Stephanie La Hoz Theuer, this publication forms part of a broader project, commissioned by the German Emissions Trading Authority (DEHSt) at the German Environment Agency (Umweltbundesamt, UBA), with the primary objective to analyse the current situation and development of the international carbon markets. Read More

Vulnerability of CDM Projects for Discontinuation of Mitigation Activities

Authored by NewClimate Institute and the Öko-Institut, this publication forms part of a broader project, commissioned by the German Emissions Trading Authority (DEHSt) at the German Environment Agency (Umweltbundesamt, UBA), with the primary objective to analyse the current situation and development of the international carbon markets. Read More