The German emission trading authority (DEHSt/UBA) funded this research project which was conducted by a consortium of NewClimate Institute and Ecofys to assess opportunities provided by bilateral agreements for piloting market-based approaches at sectoral levels. The main objective of the research was to explore opportunities based on the potential activation of the Article 11a (5) of the EU ETS Directive. This Article might allow bilateral agreements that further link non-LDCs with the EU ETS. Non-LDCs with role-model status and regional impact should be enabled to further use the carbon markets to finance and initiate mitigation activities.

The research work analysed concepts to define crediting thresholds based on benchmarking steps for two different sectors. The research focused on electricity generation in Chile and low-income housing in South Africa. The analysed approaches allow to ensure environmental integrity, a net mitigation effect and balanced monitoring requirements at the same time. They furthermore have potential to facilitate the development of a new market-based mechanism (NMM).

For further reading we refer to the published interim report and the final report of the research project from UBA DEHST