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The study finds that climate policy elements, including the EU ETS and long-term targets, are generally less influential in corporate investment decisions than market prices and technology-specific regulations like feed-in tariffs. While technology providers view long-term targets as significantly more relevant than the EU ETS for RD&D and sales, power generators see the EU ETS as slightly more relevant for new plant adoption. The research emphasizes that a coordinated policy mix of stringent, predictable instruments and ambitious long-term targets is necessary to drive low-carbon innovation.

The report finds that the Clean Development Mechanism (CDM) has largely failed to meet its core objectives of additionality, sustainable development, and low-carbon technology transfer. In the EU, the use of CDM credits has significantly reduced domestic abatement efforts, potentially increasing global emissions by 30 to 106 million tonnes of CO2eq between 2008 and 2009 due to non-additional projects. The authors argue that the CDM often subsidizes carbon-intensive activities and creates perverse incentives that discourage developing countries from implementing national mitigation policies. To realign results with climate goals, the report proposes limiting project eligibility to those providing long-term sustainable benefits, differentiating crediting periods by project type, and introducing tradable or institutionally procured usage rights within the EU ETS.

The document analyzes the transition from project-based mechanisms like the Clean Development Mechanism (CDM) to sectoral-scale mechanisms. It evaluates three governance models for a Sectoral Crediting Mechanism (SCM): centralized (UN-led), hybrid (bilateral with UN minimum standards), and decentralized (independent of the UN). The authors argue that while decentralized models offer flexibility, they risk undermining environmental integrity and market credibility. The paper proposes a centralized SCM project cycle that improves upon the CDM by introducing more interactive baseline reviews, professionalizing the regulatory body, and utilizing biennial update reports for better verification.

The document critiques carbon markets, specifically the Clean Development Mechanism (CDM) and the EU Emissions Trading System (ETS), as tools that perpetuate dependence on fossil fuels and facilitate 'carbon colonialism'. It highlights how offsetting allows rich nations to outsource their climate responsibilities to developing countries, often resulting in human rights violations, land grabbing, and the funding of projects like coal plants or gas flaring. The author advocates for a systemic transformation based on energy efficiency, renewable energy, and public climate finance instead of market-based mechanisms.

The report argues that carbon trading is an ineffective and often corrupt mechanism for addressing climate change in Africa. It examines the Clean Development Mechanism (CDM) and voluntary markets, finding that they frequently favor large industrial polluters over sustainable development and marginalize local communities. Through case studies in South Africa, Uganda, and Ethiopia, the authors illustrate how 'additionality' is often fabricated and how projects can lead to land grabs or the subsidization of fossil fuel expansion. The document concludes that the carbon market is structurally flawed and should be abolished in favor of direct public funding and low-carbon development pathways based on historical responsibility.

The document argues that a lack of shared definitions and transparent governance mechanisms has eroded trust between developed and developing countries regarding adaptation finance. It analyzes the fragmented landscape of current funds—including the LDCF, SCCF, and Adaptation Fund—and highlights critical disputes over the definition of 'new and additional' resources and the criteria for identifying 'particularly vulnerable' countries. The brief emphasizes that as finance scales from millions to billions of dollars, establishing common metrics for monitoring and evaluation and ensuring equitable representation in governing bodies, such as the Green Climate Fund, is essential for effective climate action.

The document evaluates 76 CDM bioenergy projects to determine which types offer the most sustainable development benefits. It finds that projects using agricultural residues, particularly on-farm residues, claim the highest benefits, while forest residue projects claim the fewest. The analysis highlights a lack of verification systems for these claims and notes that very few projects improve rural energy access.

The document examines the tension between adopting low-GHG consumption lifestyles in wealthy nations and the economic stability of developing countries that rely on international trade. Using a scenario developed for the Waste & Resources Action Programme (WRAP), the analysis finds that while shifting spending from imported goods to domestic services can increase the GDP of a high-income country like the U.K., it can lead to significant GDP declines in LDCs, primarily due to reduced demand for clothing and manufactured goods. The authors argue for the need to identify trade strategies that simultaneously achieve climate mitigation and poverty alleviation, such as preferentially sourcing from low-GHG, low-income regions.

The document examines the risk of 'double-counting' international greenhouse gas offsets, where both the buyer (developed country) and seller (developing country) count the same emission reduction toward their respective pledges. The authors argue that such accounting could dilute global climate ambition by up to 1.6 billion tons CO2e by 2020, potentially undermining the 2°C warming pathway. The brief analyzes different supply and demand scenarios and proposes policy remedies, such as buyer-only counting, credit-sharing, or the use of an international transaction log to ensure environmental integrity.

In 2010, four members of the UNEP BFI CCWG (AFD, EIB, JICA, and KfW) committed approximately 15.5 billion USD to climate finance in developing countries, a 22% increase over 2009. Mitigation received 80% of these funds, primarily targeting the energy (51%) and transport (31%) sectors, while adaptation funding decreased by 28% to 20% of the total, focused largely on water supply and treatment. Concessional loans were the dominant financial instrument at 70% of total flows. The report also details carbon finance initiatives managed by EIB, KfW, and NEFCO, which are tracked separately from direct climate finance.

An open letter from civil society organizations to the COP 16 Presidency calling for the suspension of carbon credits for HFC-23 projects due to methodology flaws that lead to over-issuance. The authors urge the UNFCCC to rescind credits issued since November 26, 2010, and suggest transitioning HFC-23 management to the Montreal Protocol to ensure real emission reductions.

A coalition of NGOs argues that HFC-23 projects, which account for half of all CDM carbon credits, are based on a flawed methodology leading to the over-issuance of credits that do not represent real emission reductions. The letter criticizes the CDM Executive Board for resuming credit issuance despite these findings and calls for the rescission of credits issued since 26 November 2010, a total halt on further issuance until methodology is corrected, and the adoption of HFC phase-down measures under the Montreal Protocol.

The document examines the Perform, Achieve and Trade (PAT) scheme, a market-based mechanism designed by the Indian government to improve energy efficiency across nine high-carbon sectors. It details the scheme's focus on energy intensity rather than absolute emissions, the use of Energy Savings Certificates (ESCerts) to incentivize performance, and the specific challenges and opportunities within the iron and steel industry. The author suggests that the PAT could help India meet its domestic GHG reduction targets and recommends a phased implementation, potentially starting with the iron and steel sector, to ensure technical and political feasibility.

The Stockholm Environment Institute (SEI) defends its findings that adipic acid CDM projects maintain a strong competitive advantage and risk carbon leakage. SEI argues that even when accounting for lower primary CER prices and Chinese taxes, CDM revenues remain significant. It further contends that the higher plant utilization rates in CDM plants compared to non-CDM plants, particularly in Asia, indicate that CDM incentives—rather than just regional economic shifts or anti-dumping measures—prevented production cuts during the global financial crisis. To mitigate leakage, SEI proposes aligning CDM baseline emissions factors with the more stringent standards used in Joint Implementation (JI) projects.

Carbon Market Watch reports that over 800,000 Certified Emission Reductions (CERs) were issued to an HFC-23 abatement project in India on 12 November 2010, despite a suspension of HFC-23 credit issuance enacted by the Executive Board in August 2010. The organization suggests the issuance may have been an error and urges the Board to recall the credits and review the project. Additionally, CDM Watch advises potential buyers from Germany, the UK, Italy, the Netherlands, France, and Switzerland to refrain from using these credits for compliance.

Civil society organizations, including CDM Watch and EIA, sent open letters to various financial institutions and energy companies to express concerns over HFC-23 projects under the CDM. The letters argue that these projects lack environmental integrity, reward inefficient production, and create perverse incentives for the production of HCFC-22. The signatories call for changes to CDM methodology and the exclusion of these credits from the EU ETS.

The study finds that the CDM successfully incentivized N2O abatement in the nitric acid sector, where such practices were previously rare. While the risk of carbon leakage and systematic baseline manipulation is judged to be low for nitric acid projects—especially compared to adipic acid projects—the authors highlight significant issues with current methodologies. These include complexity leading to credit issuance delays and a system that rewards high-emitting plants. To resolve these, the authors recommend implementing a benchmark factor for baseline emissions, potentially in the range of 4 to 5 kg N2O per tonne of nitric acid.

The document outlines Africa's high vulnerability to climate change and its significant investment gaps in adaptation and mitigation. It evaluates the AGF's proposal to mobilise US$100 billion annually by 2020, highlighting potential public funding sources like carbon taxes and fossil fuel subsidy redirection, while stressing the need for grants for adaptation and regulatory reforms to attract private investment in carbon markets.

The document analyzes Asia's climate investment requirements, estimating annual mitigation needs at US$90–180 billion and adaptation costs at US$40–45 billion by 2030. It argues that while private finance can drive mitigation in major economies like China and India, public resources are essential for adaptation and for less developed countries. The briefing highlights opportunities in carbon markets and public-private leveraging, but warns that the Copenhagen Accord's US$100 billion target is insufficient for Asia's needs and that transport or financial transaction levies could negatively impact Asian trade and financial hubs.

The document examines how the AGF's goal of mobilising US$100 billion annually can support SIDS, noting that while public grants are essential for adaptation, private capital can be leveraged for mitigation. It highlights risks such as the impact of international transport levies on trade and tourism, and the potential for non-LDC SIDS to be underserved by existing aid patterns.