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Overview and comparison of existing carbon crediting schemes


Michaelowa, Axel; Shishlov, Igor; Hoch, Stephan; Bofill, Patricio; Espelage, Aglaja (2019). Overview and comparison of existing carbon crediting schemes. Helsinki: Nordic Environment Finance Corporation (NEFCO).

Abstract

At COP24 in December 2018, Parties adopted a large part of the so-called “rulebook” operationalizing the articles of the Paris Agreement and the accompanying decision 1/CP.21. Due to lack of consensus on several contentious topics surrounding accounting, integrity and ambition, the rules for the market mechanisms under Article 6 have been postponed to COP25. Even if the guidelines for transfers of international emission reduction credits in cooperative approaches (Article 6.2) and the rules, modalities and procedures for the UNFCCC-supervised crediting mechanism (Article 6.4) are adopted as planned at COP25, the full operationalization of these mechanisms is expected to take several years. In this context, the objective of this study is to provide a comprehensive overview of key design elements implemented in existing “baseline and credit” carbon crediting schemes and to draw lessons that can inform the negotiations on Article 6.
In a first step, the paper identifies the most important carbon crediting schemes at different levels of governance and of different geographical focus for analysis and subsequently compares them along six main dimensions: Governance and accounting; scope and eligibility; environmental integrity; monitoring, reporting and verification (MRV); sustainable development (SD) contributions; and linkages with other carbon pricing instruments. While international crediting schemes have suffered from a lack of demand since the early 2010s, domestic crediting schemes are spreading at national and subnational levels. At the international level, the study reviews key features of the international crediting schemes under the Kyoto Protocol, notably the Clean Development Mechanism, Joint Implementation and Green Investment Schemes for International Emissions Trading. As an example for bilaterally implemented schemes, the Joint Crediting Mechanism is included. At a (sub)national level, schemes from Australia, California, Canadian provinces, China, Spain and Switzerland were selected. Finally, the voluntary offset standards Gold Standard and Verra are discussed. The analysis is of common features and differences is completed by discussing alternative implementation approaches (see the Table below).

Abstract

At COP24 in December 2018, Parties adopted a large part of the so-called “rulebook” operationalizing the articles of the Paris Agreement and the accompanying decision 1/CP.21. Due to lack of consensus on several contentious topics surrounding accounting, integrity and ambition, the rules for the market mechanisms under Article 6 have been postponed to COP25. Even if the guidelines for transfers of international emission reduction credits in cooperative approaches (Article 6.2) and the rules, modalities and procedures for the UNFCCC-supervised crediting mechanism (Article 6.4) are adopted as planned at COP25, the full operationalization of these mechanisms is expected to take several years. In this context, the objective of this study is to provide a comprehensive overview of key design elements implemented in existing “baseline and credit” carbon crediting schemes and to draw lessons that can inform the negotiations on Article 6.
In a first step, the paper identifies the most important carbon crediting schemes at different levels of governance and of different geographical focus for analysis and subsequently compares them along six main dimensions: Governance and accounting; scope and eligibility; environmental integrity; monitoring, reporting and verification (MRV); sustainable development (SD) contributions; and linkages with other carbon pricing instruments. While international crediting schemes have suffered from a lack of demand since the early 2010s, domestic crediting schemes are spreading at national and subnational levels. At the international level, the study reviews key features of the international crediting schemes under the Kyoto Protocol, notably the Clean Development Mechanism, Joint Implementation and Green Investment Schemes for International Emissions Trading. As an example for bilaterally implemented schemes, the Joint Crediting Mechanism is included. At a (sub)national level, schemes from Australia, California, Canadian provinces, China, Spain and Switzerland were selected. Finally, the voluntary offset standards Gold Standard and Verra are discussed. The analysis is of common features and differences is completed by discussing alternative implementation approaches (see the Table below).

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Additional indexing

Item Type:Published Research Report
Communities & Collections:06 Faculty of Arts > Institute of Political Science
Dewey Decimal Classification:320 Political science
Language:English
Date:2019
Deposited On:16 Oct 2019 07:45
Last Modified:23 Oct 2019 23:58
Publisher:Nordic Environment Finance Corporation (NEFCO)
Number of Pages:53
Additional Information:This work has been commissioned by NEFCO and financed by the Nordic Initiative for Cooperative Approaches (NICA). NICA was jointly developed by Finland, Norway, Sweden and NEFCO, and established by NEFCO in 2018. NICA aims to contribute to the implementation of the Paris Climate Agreement, in particular to the operationalization of international market-based collaboration under Article 6 of the Paris Agreement. NICA strives to demonstrate how international partnerships can scale up and accelerate ambitious climate action, such as broader sectoral approaches, promote sustainable development and harness private sector finance and innovation. NICA aims to build capacity among Nordic actors and their global peers for collaboration that is compatible with the Paris Agreement framework.
OA Status:Green
Official URL:https://www.nefco.org/wp-content/uploads/2019/05/NICA-Crediting-Mechanisms-Final-February-2019.pdf
Related URLs:https://www.nefco.org/ (Organisation)

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