Carbon Markets in the Post Paris World

The document argues that for carbon markets to support the 1.5°C goal, they must move beyond zero-sum offsetting toward net mitigation. It proposes rigorous ex-post accounting for internationally transferred mitigation outcomes (ITMOs) to avoid 'hot air' and double counting. For the Sustainable Development Mechanism (SDM), it recommends excluding non-additional technologies via negative lists, abolishing the direct contractual link between project proponents and designated operational entities (DOEs) to ensure impartiality, and excluding temporary sinks like REDD and forestry credits due to leakage and permanence risks. Additionally, it calls for the SDM to integrate UN Sustainable Development Goals (SDGs), establish robust social and environmental safeguards, and create a UN-level grievance process for affected communities.

• To prevent the creation of 'hot air' and ensure environmental integrity, mitigation outcomes under Cooperative Approaches should be measured ex-post based on actual reductions over and above a party's Nationally Determined Contribution (NDC), specifically limited to the surplus remaining after a compliance cycle compared to the average of the previous three inventories.
• The Sustainable Development Mechanism (SDM) should shift from a net-neutral offsetting logic to one of overall global emission mitigation, which can be achieved through the use of discounting, cancellation, conservative baselines, and the curtailment of credit periods.
• To ensure the impartiality of verification, the contractual relationship between activity proponents and Designated Operational Entities (DOEs) should be severed; instead, the SDM supervisory board should contract DOEs using fees collected from proponents.
• The SDM must address additionality and permanence risks by using negative lists to exclude technologies with low additionality, applying sectoral standardized benchmarks for baselines, and excluding temporary sinks such as forestry credits and REDD due to global leakage and the risk of re-releasing stored emissions.
• The document recommends that a portion of proceeds from international transfers of mitigation outcomes be dedicated to helping vulnerable developing countries with climate change adaptation and that ITMO proceeds be earmarked for Green Investment Schemes to support Sustainable Development Goals (SDGs).
• To protect human rights and ensure sustainable development, the SDM should require reporting on SDG co-benefits, implement social and environmental safeguards aligned with multilateral finance institutions, and establish a UN-level institutional grievance process with the power to revoke project approvals.

APA

Carbon Market Watch (2016). Carbon Markets in the Post Paris World. https://carbonmarketwatch.org/wp-content/uploads/2016/11/Carbon-Markets-in-a-Post-Paris-World_Nov_Final.pdf

Chicago

Carbon Market Watch. Carbon Markets in the Post Paris World. 2016. https://carbonmarketwatch.org/wp-content/uploads/2016/11/Carbon-Markets-in-a-Post-Paris-World_Nov_Final.pdf.

Wikipedia

{{cite report |author=Carbon Market Watch |title=Carbon Markets in the Post Paris World |date=November 2016 |url=https://carbonmarketwatch.org/wp-content/uploads/2016/11/Carbon-Markets-in-a-Post-Paris-World_Nov_Final.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carbonmarketwatch2016carbon, author = {{Carbon Market Watch}}, title = {{Carbon Markets in the Post Paris World}}, institution = {Carbon Market Watch}, year = {2016}, month = nov, url = {https://carbonmarketwatch.org/wp-content/uploads/2016/11/Carbon-Markets-in-a-Post-Paris-World_Nov_Final.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }