Limits to International Transfers

The paper examines the risk of "hot air" in international carbon markets under the Paris Agreement, where countries with targets higher than their projected emissions could transfer excess credits, potentially increasing global emissions. It proposes a typology of limits to prevent these transfers, testing them across 15 countries, and concludes that while such limits can prevent most hot air transfers, they involve policy trade-offs. The author recommends a cautious, portfolio-based approach to ensure environmental integrity.

• International carbon markets face environmental integrity risks when countries set mitigation targets that are higher than independent projections of their likely emissions, creating "hot air" that could increase aggregated emissions and discourage future ambition.
• Analysis of 15 countries suggests that appropriately designed limits on international transfers can prevent the majority of hot air in current targets from being transferred, although this necessitates balancing different policy objectives.
• Due to the risks of hot air transfers and uncertainty regarding other methods, the paper suggests countries adopt a cautious strategy using a portfolio of approaches, with limits serving as additional safeguards for environmental integrity.

APA

Stockholm Environment Institute (2018). Limits to International Transfers. https://www.sei.org/publications/limits-to-international-transfers/

Chicago

Stockholm Environment Institute. Limits to International Transfers. 2018. https://www.sei.org/publications/limits-to-international-transfers/.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=Limits to International Transfers |date=8 November 2018 |url=https://www.sei.org/publications/limits-to-international-transfers/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitute2018limits, author = {{Stockholm Environment Institute}}, title = {{Limits to International Transfers}}, institution = {Stockholm Environment Institute}, year = {2018}, month = nov, url = {https://www.sei.org/publications/limits-to-international-transfers/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }