Incentives for Early Action on Climate Change

The document argues that providing explicit assurance of credit and banking for 'early action' (reductions between 1990 and 2007) is essential to overcome barriers for Canadian businesses and entrepreneurs. It proposes a two-step approach: first, providing credit for validated reductions to ensure participants are not penalized relative to non-participants, and second, allowing the banking of these credits for use against future obligations or for trading. The report details necessary infrastructure, including measurement protocols, a registry (potentially via the Voluntary Challenge and Registry office), and auditing standards, while drawing on models from the U.S. and Canadian pilot projects like GERT and PERT.

• Early action is defined as greenhouse gas reduction activities occurring after 1990 and before the 2008-2012 compliance period, encompassing operational emission management, domestic offsets, Joint Implementation (JI) projects in Annex I countries, and Clean Development Mechanism (CDM) actions in developing nations.
• Delaying climate action until the 2008 deadline increases the risk of economic and social disruptions because Canada's emissions were projected to be approximately 20% above 1990 levels by 2010.
• The lack of a clear government policy signal regarding credit and banking is a primary obstacle preventing companies from moving greenhouse gas reduction projects from planning to implementation.
• A proposed two-step incentive framework consists of 'credit for early action' to remove barriers and 'banking of credit' to allow the accumulation of reductions up to 2007 for future compliance or trading.
• The financial cost to the government for implementing a credit and banking system is limited to program design and administration, as credits only hold value if a future regulatory system or market emerges.
• To ensure the credibility of a credit and banking system, the report identifies five essential infrastructure requirements: measurement protocols, baseline approaches, a registry, auditing, and reporting standards.
• The report recommends that the Canadian government provide immediate assurance of credit for early action and establish a stakeholder group to design a banking system for implementation by early 1999.
• The Greenhouse Emissions Management Consortium (GEMCo) suggests that assurance of credit could unlock $7 million or more in greenhouse gas offset projects by Canadian companies.

APA

International Institute for Sustainable Development (n.d.). Incentives for Early Action on Climate Change. https://www.iisd.org/system/files/publications/incentives.pdf

Chicago

International Institute for Sustainable Development. Incentives for Early Action on Climate Change. n.d. https://www.iisd.org/system/files/publications/incentives.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=Incentives for Early Action on Climate Change |url=https://www.iisd.org/system/files/publications/incentives.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopmentndincentives, author = {{International Institute for Sustainable Development}}, title = {{Incentives for Early Action on Climate Change}}, institution = {International Institute for Sustainable Development}, url = {https://www.iisd.org/system/files/publications/incentives.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }