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Research and Dialogue

Analysis and Evaluation of the CORSIA Offsetting Mechanism for use in International Aviation

In 2016, the International Civil Aviation Organisation (ICAO) agreed on the introduction of a global market-based mechanism: the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is an integral component of the ICAO package of measures to reduce the climate impact from international aviation. To integrate CORSIA into the international climate regime and enable the use of UNFCCC-based market mechanisms after 2020, both processes must be coordinated and linked, paying particular attention to the provisions of the Paris Agreement. more

Designing the New Global Market Mechanism

With the adoption of the Paris Agreement, the creation of a new, global climate change mitigation mechanism was agreed. Embedded in the Agreement’s Article 6.4, the mechanism is designed to raise climate action ambition and lead to an overall reduction in global emissions. In implementing this and other requirements, a range of design-related issues need to be addressed. Wanting to support the Federal German Government and the Federal Environmental Agency (UBA) in addressing these issues during the UNFCCC negotiations, the UBA commissioned a research project headed by the Wuppertal Institute. The project will be used to evaluate the options available in implementing the new market mechanism and develop a set of recommendations for its regulation. more

Updating a Standardized Baseline

Standardized baselines allow emission reductions to be determined in an objective and sensible way. They were developed under the CDM to reduce project transaction costs and simplify the processes. In future, use of standardized baselines may also play a role outside the CDM framework, for example for international climate financing activities and in using the new market mechanisms. Against this backdrop, the BMUB commissioned GFA Consulting Group to conduct a research project in which an existing standardized baseline is to be updated with new data. Once the update has been completed, a mechanism will be developed in close cooperation with the African Development Bank which allows funds from international climate financing to be used for renewable energy projects in southern Africa. more

Interaction between New Market Mechanisms and Emissions Trading Schemes

With Article 6 of the Paris Agreement, market mechanisms were made an integral component of the new climate change regime. But it remains to be seen just how these mechanisms will be used, how they interact with one another and the extent to which they serve the vast number of nationally determined contributions (NDCs). Also, in recent years many and varied initiatives have been launched to promote emissions trading schemes and other carbon pricing instruments, and to support the UNFCCC negotiations by promoting further dialogue. Given these diverse developments and the issues that remain unclear, the Federal Environmental Agency (UBA) commissioned a research project conducted by a consortium led by adelphi. The project team analyses the dynamic developments in the global carbon market, evaluates the results and provides input for use in fleshing out and refining the Federal German Government’s position in the UNFCCC negotiations and in the various carbon market initiatives. more

Further Development of the CDM and New Market Mechanisms

As part of this project, the Wuppertal Institute conducts analyses on a range of research papers covering current issues and holds regular expert workshops at which negotiation leaders from the international climate regime meet with scientists and carbon market players. The project also supports the BMUB in disseminating information and connecting the specialist public via networks. As part this part of the project, the Wuppertal Institute publishes, among other things, a specialist magazine – “Carbon Mechanisms Review” – and operates the online portal carbon-mechanisms.de, providing basic information along with specialised content and the latest news from the field of market-based climate change policy. more

Models to Implement New or Transform Existing Market Mechanisms

The Paris Agreement gives Parties considerable scope in defining their nationally determined contributions. This open structure poses numerous challenges, especially concerning the use of market-based climate change mitigation mechanisms. How, for example, can internationally transferred emission reductions be correctly determined, calculated and counted towards the nationally determined contributions (NDCs) of the countries concerned. Given these and other open issues, the Federal Environmental Agency (UBA) commissioned a research project conducted by a consortium headed by Öko-Institut. The project team is analysing the new challenges involved in using global market mechanisms, focusing in particular on the environmental integrity of future climate change mitigation instruments. more

Strengthening the African CDM Pipeline

Given the current crisis in the global carbon market, Africa’s carefully developed technical and administrative capacities are at risk of demise. To counter this trend, the Federal German Environment Ministry (BMUB) supported an initiative (lifecycle 2015 to 2017) headed by Climate Focus. The aim of the project was to identify and test ways to enable Africa’s CDM capacity to be used in the medium term and for it subsequently to be integrated into the Paris Agreement structure. To address these issues, the project focused on international climate financing and attempts to link the CDM with international climate financing institutions, particularly the Green Climate Fund. more

Analysis of Current Developments in the Global Carbon Market

A consortium headed by the NewClimate Institute is studying both the current situation and trends in the global carbon market. The main focus of the study is the marketability of existing projects during the transitional phase until such time as the new climate regime becomes fully operational. The research team is also looking at unused project potential in areas where, given the difficult market situation, investors have withdrawn. more

Global Carbon Market

The BMUB commissioned Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) to implement a comprehensive project on capacity-building in developing countries. The “Global Carbon Market” project promotes capacity development among public decision-makers to utilise the potential of market-based instruments in implementing national emission reduction targets and to integrate private industry into the process. In addition, the project assists the development of new market mechanisms on a conceptual basis. The project is conducted in cooperation with Chile, India, Tunisia and Uganda. more