Carbon markets are a policy instrument than can be utilised to support climate action. As with every other instrument, it depends on the correct use case and effective implementation whether the instrument leads to the desired effect of greenhouse gas emissions reductions, or not. National market instruments require different parameter settings than internationally applied instruments. Carbon markets for cooperative emission reductions between countries are anchored in the Paris Agreement through Article 6 and shall lead to an increase in ambition. Additionally, so called voluntary carbon markets (VCM) operate in an unregulated environment and offer an alternative for other actors to pay for a quantified amount of emissions reductions elsewhere (offsets). The boundaries between these systems are becoming increasingly blurred. ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) also accepts offsets from unregulated programs. Offsets are also a central element of many companies’ net-zero claims. This is almost always counterproductive since the applied approaches lack transparency and integrity and allow to delay or avoid the decarbonisation of their own activities, while still claiming neutrality to the public.
Our carbon market work focusses on:
- Carbon market instrument integration as part of national climate policy
- High integrity implementation of Article 6 in line with overall Paris Agreement objectives
- Quantitative and qualitative assessment of Kyoto mechanisms current impact
- Credible use cases of voluntary carbon markets (VCM) with integrity
- Impact and reform needs of CORSIA to address international aviation’s climate impact
- Methods for evaluating net-zero or climate neutrality claims of governments and companies
- Alternative approaches to address corporate or individual climate responsibility
