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The paper examines how subnational governments, with a focus on Washington State, can effectively use carbon tax revenues for greenhouse gas (GHG) mitigation. It argues against a narrow focus on the lowest-cost reductions, which often leads to pitfalls such as overpayment, lack of additionality, and long ramp-up periods. Instead, it recommends a strategic approach that targets market failures, promotes social equity, and leverages existing state programs to ensure rapid and effective deployment of funds.

Carbon Market Watch criticizes the European Commission's proposal to reduce the scope of the EU Emissions Trading Scheme (EU ETS) for international aviation. The organization argues that replacing the EU ETS with the ICAO's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) would reduce the coverage of global aviation emissions from 35% to 8% and significantly lower the cost per tonne of CO2 emitted from 5 EUR to 0.31 EUR. The document asserts that the EU ETS is more ambitious than CORSIA because it utilizes an absolute cap and mandatory compliance, whereas CORSIA is voluntary until 2027 and based entirely on offsetting.

The policy brief critiques the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) as an insufficient replacement for the EU Emissions Trading System (EU ETS) regarding international aviation emissions. It argues that CORSIA's goal of "carbon neutral growth" allows for unlimited emissions growth and lacks the mandatory enforcement and transparency of the EU ETS. The author contends that exempting international flights from the EU ETS would undermine EU climate targets, potentially increasing the EU ETS surplus by 260 million tonnes and reducing emissions reductions by 710 Mt compared to a full-scope scenario. The brief recommends that the EU continue covering international flights, demand full transparency from ICAO's Committee on Aviation and Environmental Protection (CAEP), and end the free allocation of 85% of aviation allowances to fund decarbonization research and the Green Climate Fund.

The report analyzes the California-Quebec linked cap-and-trade program, finding that allowance supply has consistently exceeded emissions from 2013 to 2015, leading to periodic undersubscription at auctions. While recent low auction sales (11% in May 2016 and 18% in February 2017) are viewed as aberrations, the author argues that systemic oversupply persists. Prospective analysis suggests that 78-86% of remaining allowances will be needed for compliance through 2020, with auction demand likely averaging 71-81%. To improve stringency and revenue stability, the report recommends lowering caps, switching to annual compliance, increasing the price floor, and reducing free allowance allocations.

The document argues that replacing the EU ETS with CORSIA for European flights would significantly reduce climate ambition and breach the Paris Agreement. It criticizes CORSIA for lacking legally binding status until 2027, relying solely on offsets, and lacking in-sector reduction requirements. The authors demand that the EU ETS cover all domestic and international flights from 2017 unless CORSIA is substantially strengthened in its targets, legal binding date, accounting rules, and in-sector reduction requirements.

The letter argues that international frameworks for aviation and shipping emissions are insufficient to meet Paris Agreement goals. It specifically criticizes ICAO's CORSIA for relying on offsets and the IMO for delaying global CO2 measures. The authors call for the EU ETS to return to full-scope for aviation, include all EU-related shipping emissions in 2030 targets, and eliminate free allowances for both sectors to fund climate initiatives.

Carbon Market Watch argues for the phase-out of the Clean Development Mechanism (CDM) by the end of the second Kyoto commitment period, recommending that project registration cease as of COP 24 in 2018. The organization advocates for the establishment of a CDM grievance and safeguard mechanism to protect human rights and the environment, alongside strengthened civil society participation in stakeholder consultations. It further calls for a CMP/CMA process to guide the transition to the Paris Agreement's Sustainable Development Mechanism (SDM) and the implementation of measures to prevent double counting of credits used in ICAO's CORSIA scheme.

Carbon Market Watch argues for the phase-out of the Clean Development Mechanism (CDM) by the end of the second Kyoto commitment period, recommending that project registration cease by COP24 in 2018. The organization advocates for the establishment of a CDM grievance mechanism and institutional safeguards to protect human rights and the environment, noting that the CDM currently lacks the accountability mechanisms found in other international financial institutions. Additionally, it calls for strengthened civil society participation in stakeholder consultations and the implementation of measures to prevent double counting of credits used under ICAO's CORSIA scheme and nationally determined contributions.

Carbon Market Watch and Transport & Environment critique the EU's guidelines on Upstream Emission Reductions (UERs), stating they are too weak to force the oil industry to change practices due to loopholes regarding carbon offsets and double counting. While the Fuel Quality Directive requires a 6% carbon footprint reduction by 2020 compared to 2010, the authors argue that national governments must now make the guidelines legally binding and limit eligible savings to Clean Development Mechanism projects in Least Developed Countries to ensure transparency and additionality.

The statement emphasizes that ICAO's CORSIA must be aligned with the UNFCCC's Paris Agreement framework, specifically regarding transparency, accounting for Nationally Determined Contributions (NDCs), and the global stocktake, to ensure that carbon credits are not double-counted by 2018.

The briefing explains that measuring electricity emissions through average factors often misrepresents the actual environmental impact of energy use. By adopting technology that tracks marginal emissions—the rate at which emissions change with a small change in load—consumers and corporations can optimize the timing and location of electricity use to maximize carbon reductions. The author highlights that harnessing end-use flexibility can make devices run 15 percent cleaner on average without cost or quality impacts. Practical applications include timing electric vehicle charging to avoid peaking plants and valuing renewable energy projects based on their specific carbon reduction potential rather than treating all megawatt-hours as equal.

Carbon Market Watch argues that the ICAO's CORSIA scheme must be integrated into the Paris Agreement's transparency and reporting mechanisms. The author recommends that NDCs include sections on contributions outside the UNFCCC, that national inventories be adjusted to prevent double counting of offsets, and that aviation emissions and CORSIA progress be included in the global stocktake and synthesis reports.

Between 2008 and 2015, heavy industry in 20 European countries generated over €25 billion in windfall profits from the EU ETS. These profits were primarily driven by the free allocation of emission allowances intended to prevent "carbon leakage," a phenomenon the report argues is unsubstantiated by evidence. The most significant gains came from cost-pass through to customers (€16.8 billion), followed by the sale of surplus allowances (€7.5 billion) and the use of cheaper international offsets (€0.8 billion). The iron and steel, cement, refineries, and petrochemicals sectors were the primary beneficiaries. The report concludes that these subsidies reduce the incentive for industrial decarbonisation and deprive governments of an estimated €143 billion in potential auctioning revenues, recommending a phase-out of free allocations and the establishment of a Just Transition Fund.

Carbon Market Watch argues that the CDM requires fundamental reform to address failures in human rights accountability, additionality testing, and sustainable development monitoring. Key recommendations include establishing a formal grievance mechanism, restricting technology eligibility to exclude fossil fuels, and introducing liability rules for Designated Operational Entities to prevent conflicts of interest.

The document examines the role of offsetting in the aviation sector, specifically within the context of the International Civil Aviation Organization's (ICAO) goal to limit net emissions growth to 2020 levels. It highlights the establishment of the Carbon Offset and Reduction Scheme for International Aviation (CORSIA), noting that due to exemptions and non-participation by certain states, it is expected to cover only about three quarters of emissions above 2020 levels. The report aims to analyze the offsetting practices of over 30 air carriers to provide insights into industry trends and the quality of offsets used, which is critical given that cumulative demand for offsets through 2040 could reach nearly eight billion tonnes.

A joint submission by 20 organizations arguing that the Sustainable Development Mechanism (SDM) must avoid the systemic failures of the Clean Development Mechanism (CDM) by implementing strict human rights safeguards, ensuring a net decrease in global emissions, and establishing robust grievance and participation processes.

The document argues that the ICAO's CORSIA scheme is insufficient to achieve carbon neutral growth by 2020 or align aviation with the Paris Agreement's 1.5 degree warming limit. It highlights the need for further regional and national efforts to address aviation's climate impact and provides recommendations for maintaining European ambition.

The International Coalition for Sustainable Aviation (ICSA) warns the EU against prioritizing the breadth of participation in the ICAO Global Market Based Mechanism (GMBM) over environmental integrity. The letter argues that without safeguards against double-counting and low-quality offsets, the GMBM will fail to address aviation emissions. It calls for the EU to make its commitment to the GMBM contingent on the inclusion of transparency and environmental safeguards, drawing on the EU's own experience with the Union registry and the Paris Agreement.

The report analyzes the compatibility of Carbon Market Clubs (CMCs)—networks of emissions trading schemes (ETSs) sharing rules and services—with various 'climate clubs' consisting of governments, cities, and businesses. It explores whether standardized CMC services, such as mitigation value assessments and international asset reserves, can reduce transaction costs and political barriers to linking diverse carbon markets. While the Paris Agreement's Article 6.2 encourages voluntary cooperation, the report finds that political concerns over sovereignty, environmental integrity, and the 'not invented here' syndrome often outweigh technical efficiencies. Case studies of the EU ETS, WCI, RGGI, and ICAO illustrate the tension between the desire for centralized control and the economic benefits of networked markets.

The document outlines a carbon offset mechanism designed to allow South African firms to reduce their carbon tax liability by investing in external GHG mitigation projects. It establishes a framework where offsets can provide a tax-free allowance of 5% or 10%, primarily relying on international standards like the CDM, VCS, and Gold Standard. The scheme is restricted to projects located within South Africa and those outside the direct scope of the carbon tax to prevent double counting. Administration is tasked to the Designated National Authority (DNA) within the Department of Energy, supported by an Independent Expert Committee and a national registry to track the transfer and retirement of credits.