The German Emission Trading Authority (DEHSt) at the Federal Environment Agency (UBA) contracted a consortium, led by NewClimate Institute, to evaluate the situation and developments in the international carbon market over the period up to 2020. The project developed and applied a method to assess the vulnerability of existing project-based mitigation activities (e.g. CDM) to discontinuing their abatement activity. In combining this research with an extensive database created in previous research, we developed a carbon offset credit supply potential tool to provide bottom-up estimates of the volume of credits that could be issued under a range of different scenarios.

The project was able to estimate the CDM supply potential up to 2020 and its implication for e.g. CORSIA as well as the marginal cost of CER supply and implications of demand sources. Furthermore, the research analysed the implication of supporting vulnerable CDM projects through credit purchase facilities. The results of this work provide an important foundation and make a fundamental contribution to the debate on future market developments and related measures at the international level.

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