Search Climate Insights Directory

Carbon Market Watch criticizes the European Parliament for delaying the implementation of the Market Stability Reserve (MSR) until 2019 and for allowing 300 million surplus allowances to return to the market for an innovation fund. The organization warns that the EU ETS is currently flooded with over two billion excess permits, which suppresses carbon prices and hinders the transition to renewable energy. It urges EU Member States to establish the reserve by 2017 to prevent the oversupply from potentially reaching 4.5 billion permits by 2020.

The report proposes a 2030 target for California to reduce carbon emissions to 40% below 1990 levels, asserting that this is technically feasible and economically viable. It recommends maintaining a policy portfolio where a broad cap-and-trade program acts as an emissions ceiling over sector-specific policies. To manage costs and uncertainty, the author suggests extending current cost-containment tools, including a three-tiered allowance reserve and a forward-borrowing mechanism. The analysis incorporates both capped emissions and uncapped sectors—such as agriculture and waste—predicting that the state can reach the target through commercially available technology and induced innovation in clean tech industries.

The document warns that the EU Emissions Trading System (EU ETS) is dysfunctional due to a surplus of over 2 billion tonnes of pollution permits, which has caused carbon prices to drop from 30 euros in 2008 to approximately 7 euros. It advocates for the immediate implementation of a market stability reserve to manage this overcapacity, noting that failure to reform the market could lead to a shift toward national-level command-and-control measures and undermine global carbon trading systems and the Paris climate summit. However, it cautions that a reserve is only a temporary cushion and that a permanent cancellation of surplus permits is necessary to protect future climate targets.

The policy brief advocates for a shift in how protected areas (PAs) in Africa are valued, moving beyond biodiversity to include measurable economic contributions. It suggests that integrating ecosystem services into national development planning and adopting innovative financing—such as payment for ecosystem services (PES), carbon offsets, and 'wildlife-friendly' product certifications—can secure investment and improve local livelihoods. The authors emphasize that PAs must be co-managed with local communities to ensure equitable benefit sharing and sustainable resource use.

The document asserts that aviation is the fastest growing and most carbon intensive transport mode, contributing 5% of global warming. It criticizes ICAO's current approach as inadequate, focusing on limiting growth rather than reducing emissions. The brief calls for the removal of aviation fuel tax and VAT exemptions, the implementation of binding emissions reduction budgets for 2030 and 2050, and a more proactive EU role in ensuring the environmental integrity of a Global Market-Based Mechanism (GMBM). It also suggests shifting focus toward rail infrastructure to reduce aviation dependence.

The document critiques the 'Green Economy' and 'green growth' frameworks, asserting that they redefine nature as a collection of 'ecosystem services' to create new financial markets. It argues that these markets, particularly biodiversity and carbon offsets, serve as cost-cutting tools for corporations to bypass environmental regulations and maintain industrial production. The report highlights the risks to indigenous and traditional communities, including loss of territorial control and the imposition of opaque contracts. It provides examples of failed offsetting programs in the EU, Australia, Brazil, and Namibia, concluding that financialization is a 'false solution' that exacerbates ecological crises.

The evaluation finds that Joint Implementation (JI) likely increased global GHG emissions by approximately 600 million tCO2e because many projects lacked additionality and were hosted by countries with significant allowance surpluses. The report highlights systemic failures in auditing, particularly under Track 1, and notes that 80% of issued ERUs came from project types with low or questionable environmental integrity. It recommends international oversight, standardized methodologies, and the prohibition of retroactive crediting for future mechanisms.

The briefing examines the use of Upstream Emission Reductions (UERs) to meet the Fuel Quality Directive's (FQD) target of reducing transport fuel greenhouse gas intensity by 6% by 2020. It warns that the current implementing measure lacks additionality requirements and oversight, creating a high risk of double counting across EU Member States, between the EU and third countries, and between the FQD and the EU ETS. The author highlights that projects from the Alberta Offset System, including road construction for tar sands mining, could potentially qualify. To ensure environmental integrity and reduce administrative burdens, the document recommends that Member States restrict UERs to CDM projects in Least Developed Countries, noting that a single project in Angola could potentially meet the entire estimated 0.8% gap in the FQD target.

The document contends that the Clean Development Mechanism (CDM) lacks the necessary environmental and social standards to be integrated into results-based climate finance. It highlights that many CDM projects fail to produce real emission reductions due to a lack of additionality and have caused negative impacts on local communities, including human rights violations. The author argues that the Green Climate Fund (GCF) should not purchase stranded offset credits from existing CDM projects, as this would contradict the GCF's mandate for new and additional financial resources and its own interim environmental and social safeguards, which require stakeholder participation and grievance mechanisms that the CDM lacks.

The document argues that the CDM, as a pure offsetting mechanism, often fails to deliver real emission reductions and lacks sufficient social safeguards. It proposes a fundamental overhaul of the CDM's modalities and procedures, focusing on achieving net atmospheric benefits, strengthening additionality testing, shortening crediting periods, and enhancing civil society participation and grievance mechanisms. It also calls for greater transparency from Designated National Authorities (DNAs), stricter eligibility and conduct rules for the CDM Executive Board, and the introduction of liability rules for Designated Operational Entities (DOEs) to prevent conflicts of interest.

Carbon Market Watch opposes expanding LULUCF activities within the CDM, citing risks to climate adaptation, a lack of market demand for offsets, and the non-permanent nature of land-based carbon sequestration compared to permanent fossil fuel emissions. The organization suggests that LULUCF activities are better suited for Nationally Appropriate Mitigation Actions (NAMAs), National Adaptation Plans (NAPs), and REDD+, emphasizing a rights-based approach to food security and land rights.

Carbon Market Watch asserts that the Clean Development Mechanism (CDM) cannot be accredited for Green Climate Fund (GCF) finance because it fails to meet GCF's mandates for new financial resources and lacks the necessary environmental and social risk management systems, including grievance mechanisms.

Carbon Market Watch criticizes EU leaders for adopting a 2030 climate deal that it argues weakens emission reductions to 31% due to excess permits and provides up to €300 billion in subsidies to industry. Separately, the organization highlights human rights abuses and lack of consultation affecting indigenous communities in Guatemala associated with the UN-registered Santa Rita hydroelectric project.

Carbon Market Watch warns that the leaked 2030 Council Conclusions could reduce the effective EU greenhouse gas reduction target from 40% to 26% due to the potential banking of 'hot air' (surplus allowances). The organization criticizes the 40% target as postponing urgent action, opposes the use of EU ETS allowances to meet non-ETS targets, argues against including transport in the EU ETS, and condemns the dynamic allocation of free pollution permits as an industry subsidy.

The briefing warns that loopholes in the EU's climate framework have created a 'bubble' of 4 billion tonnes of unused pollution credits. This surplus, split between the EU Emissions Trading System (EU ETS) and the Effort Sharing Decision, threatens to undermine the EU's proposed 2030 goal of reducing greenhouse gas emissions by 40% compared to 1990 levels. The author argues that if these credits are carried over into the 2030 framework, the actual emission reductions could drop to 26%.

The document warns that a 'bubble' of 4 billion tonnes of excess emission rights threatens to undermine the EU's proposed 2030 climate target. It details how surpluses in the Effort Sharing Decision (ESD) and the Emissions Trading System (ETS) could be carried over into the 2030 framework, effectively lowering the actual emission reductions from a proposed 40% to 26% if not addressed by EU leaders.

The document critiques the REDD (Reducing Emissions from Deforestation and Forest Degradation) mechanism, asserting that it prioritizes private finance and corporate interests over indigenous rights and genuine climate mitigation. Through case studies in Indonesia, Mozambique, and Peru, it demonstrates how REDD projects can exacerbate land conflicts, threaten food security, and fail to achieve carbon reduction goals. The report concludes that REDD is a 'false solution' that allows industrial polluters in the Global North to continue emitting via carbon offsets. It proposes an alternative based on community-led forest management, the resolution of land tenure issues, and a systemic reduction in the consumption of resources by rich countries.

Friends of the Earth International (FoEI) critiques the REDD (Reducing Emissions from Deforestation and Forest Degradation) mechanism, claiming it exacerbates land tenure conflicts, threatens food security, and allows industrial polluters in the Global North to avoid domestic emission cuts. Through case studies in Indonesia, Mozambique, and Peru, the report illustrates failures in carbon accounting, financial instability, and the marginalization of Indigenous peoples. FoEI proposes an alternative model of community forest management, citing Bolivia's proposal to the UNFCCC as a viable path toward climate justice and sustainable forest preservation.

Friends of the Earth International (FoEI) contends that REDD+ (Reducing Emissions from Deforestation and forest Degradation) fails to deliver permanent emissions reductions and often harms Indigenous Peoples and local communities. Through case studies in Indonesia, Mozambique, and Peru, the report illustrates how REDD+ can exacerbate land tenure conflicts, threaten food security, and facilitate continued pollution in industrialised countries via carbon offsets. FoEI proposes replacing these market-based mechanisms with community-led forest management based on traditional knowledge and a global reduction in the demand for forest-derived products.

The document warns that a 'hot air bubble' of 4 billion pollution credits across the EU ETS and ESD could reduce the actual effectiveness of the EU's 2030 climate target from 40% to as low as 26%. It details how 1.35 billion tonnes of surplus credits in the Effort Sharing Decision and 2.6 billion excess allowances in the Emissions Trading System are created by weak targets, international offsets, and free permit allocations to industry. The author calls on EU Heads of State to disallow the banking of ESD surpluses and permanently cancel excess EU ETS allowances to prevent these 'phantom rights to pollute' from carrying over into the 2030 framework.