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The briefing paper contends that carbon prices in Phase III of the EU ETS will likely fall in the lower end of the €20-40/tCO2 range, contradicting higher projections from the European Commission and other modelling studies. The author bases this on historical evidence showing that costs for environmental regulations—such as CFC phase-outs and sulphur dioxide trading—are consistently overestimated. The analysis highlights that current models often fail to account for the synergy between the EU's carbon cap and its other policy pillars, specifically the 20% energy efficiency target and renewable energy directives. Furthermore, the document notes that the 2007-2008 economic crisis, characterized by lower growth forecasts and higher fossil fuel prices, will further depress emissions and carbon prices. The author also points to the potential for a price collapse if the EU increases its acceptance of international credits from the Clean Development Mechanism (CDM).

The document proposes a Green Investment Scheme (GIS) to recycle revenues from Russian Assigned Amount Units (AAUs) into environmental projects. It outlines two primary implementation paths: a 'programme approach' for small, simple efficiency projects and a 'project approach' for larger, unique investments. The report identifies significant institutional barriers in Russia, including a lack of a strong national focal point and poor reporting statistics, which hinder the eligibility of AAUs for trading. It analyzes the varying requirements of potential buyers: the EU emphasizes environmental integrity and strategic energy dialogue; Japan values good governance and a mix of quantifiable and non-quantifiable activities; and Canada prefers quantifiable, project-specific investments. The authors recommend prioritizing small-scale, technically simple projects in energy efficiency, fuel switching, and renewable energy to build momentum and reduce transaction costs.

The document argues that current national emission pledges for 2020 are incomparable due to differing accounting methods and are collectively insufficient to maintain robust carbon market prices. It highlights that the global recession has reduced the actual effort required to meet these targets and warns that weak short-term pledges shift a disproportionate and potentially infeasible burden of emission reductions onto future generations to meet 2050 goals.

Peru's emissions are projected to triple by 2050, driven by economic growth and energy demand. While the country has established mitigation plans and Nationally Appropriate Mitigation Actions (NAMAs), implementation is hindered by financial, regulatory, and knowledge barriers. Significant potential exists in renewable energy, forestry, and waste management, though the energy sector is currently dominated by natural gas. The report suggests that SECO can support Peru through capacity building for market mechanisms, financing marginal abatement cost studies, and promoting specific technologies like solar water heaters and energy-efficient industrial equipment.

Vietnam faces high vulnerability to climate change and rapidly growing emissions, projected to reach 387 Mt by 2030, primarily driven by energy supply. While the government has established the National Target Program and various energy efficiency laws, the report finds that existing and planned projects are likely to harvest only 12% of the available abatement potential between 2015 and 2030. Major barriers include low electricity and coal prices, limited technical and financial capacity among stakeholders, and institutional overlaps. The study recommends a coordinated national mitigation programme and specific sector-level interventions in REDD+, wind policy, industrial energy efficiency, and waste management.

The document examines the 'CER yield' of CDM projects, finding significant underperformance and variation based on project type, size, and developer. It identifies mis-calculation and implementation delays as the primary drivers of failure, while noting that bilateral projects generally outperform unilateral ones.

The document outlines the deadlock at SB62 over climate finance, where the G77 and Arab Group pushed for accountability and structural reform of international finance, while the Umbrella Group emphasized private investment. No clear way forward was reached on providing financial resources, leaving the operationalization of the US$1.3 trillion target and adaptation finance gaps to be addressed through further consultations and at COP30.

The document critiques the draft methodology for energy efficiency in household cooking, arguing that while it improves upon the legacy AMS-II.G methodology, it still contains critical flaws regarding the fraction of non-renewable biomass (fNRB), usage rate reporting, and the frequency of Kitchen Performance Tests (KPTs). Carbon Market Watch advocates for the exclusive use of Ghilardi & Bailis 2024 values for fNRB, a 50% cap on survey-only usage reporting, and annual or quarterly KPTs to prevent over-crediting.

The report details a workshop in Cameroon that led to the creation of the Réseau Afrique Carbone & Changement Climatique (RAC3), a network designed to amplify African civil society voices in carbon market negotiations. It highlights the historical under-representation of Africa in the Clean Development Mechanism (CDM) and discusses the potential benefits of 'vintage restrictions' under the new Sustainable Development Mechanism (SDM) to encourage new projects. The event also addressed the role of African NGOs in monitoring the environmental integrity of aviation offsets under CORSIA and noted the need for increased advocacy to raise ambition regarding aviation emission reductions in Cameroon.

The 73rd CDM Executive Board meeting resulted in a revised rule for E- policies, a new work programme for standardized baselines, and updated methodologies for N2O destruction in nitric acid plants. The Board also endorsed a work programme to standardize additionality assessments for appliances and waste management.

Carbon Market Watch argues for stringent rules to prevent double counting, 'hot air' credits, and the inclusion of REDD-plus in carbon markets. It advocates for a 'net atmospheric benefit' through discounting, the establishment of a share of proceeds for adaptation and loss and damage, and the integration of a human rights-based approach into the core agreement to protect vulnerable populations.

A coalition of 61 organizations argues that the Clean Development Mechanism (CDM) should be terminated by 2020 to protect the integrity of the Paris Agreement. The authors claim the CDM undermines domestic climate action, has increased global greenhouse gas emissions due to 'junk' credits, and has led to human rights violations and inequitable benefit distribution.

The document identifies critical transparency gaps in current carbon market infrastructure, specifically within the Clean Development Mechanism, Verra, and Gold Standard registries. It argues that existing systems fail to adequately track credit ownership, verify retirement claims, or distinguish between units contributing to a host country's NDC and those adjusted for international transfer. To remedy this, Carbon Market Watch recommends implementing machine-readable datasets, mandatory non-technical project summaries, detailed financial reporting on revenue distribution, and a transaction log to track legal ownership of credits.

Signatories call on the UK government to revoke authorization for two CDM projects managed by Exportadora del Atlántico (a subsidiary of Grupo Dinant) in the Aguan and Lean regions of Honduras. The letter argues that the projects are linked to violent land conflicts, including the murder of peasants and the use of project sites by military forces. Additionally, it challenges the 'additionality' of the projects, noting that the company received millions in loans from the World Bank's IFC and the Inter-American Investment Corporation for biogas production, which was not disclosed in the project documentation.

The Santa Rita Hydroelectric Plant in Guatemala's Alta Verapaz region was registered as a Clean Development Mechanism (CDM) project in June 2014 despite strong opposition from local indigenous communities. The document asserts that the project violated the Guatemalan Agreement on Identity and Rights of Indigenous Peoples, ILO Convention 169, and CDM Modalities and Procedures by failing to conduct proper public consultations. This lack of compliance is linked to severe human rights abuses, including the alleged deaths of seven people and repressive police operations against Q’eqchi´ communities. The project is funded by the Latin Renewables Infrastructure Fund (LRIF), with investments from the IFC (USD 15mln), SIFEM (USD 7mln), DEG, FMO, and AECID. Civil society organizations have filed complaints with the Compliance Advisor Ombudsman (CAO) and the IFC, demanding the withdrawal of financing and the cancellation of the CDM registration.

The Santa Rita hydroelectric project on the Dolores River in Alta Verapaz, Guatemala, was registered under the Clean Development Mechanism (CDM) in June 2014 despite strong opposition from local Q’eqchi’ communities. The document reports that the project violated the Guatemalan Agreement on Identity and Rights of Indigenous Peoples, ILO Convention 169, and CDM procedures by failing to conduct appropriate public consultations. This lack of consultation and the subsequent project development led to severe human rights abuses, including the alleged extrajudicial killings of seven people, including two children, and violent police repression against indigenous families in August 2014. The project is funded via the Latin Renewables Infrastructure Fund (LRIF), with investors including the International Finance Corporation (IFC), which contributed 15 million dollars, and the Swiss Investment Fund for Emerging Markets (SIFEM), which contributed approximately 7 million dollars. In October 2014, civil society organizations filed a formal complaint with the Compliance Advisor Ombudsman (CAO) of the IFC, citing a lack of public consultation and the criminalization of opponents. The document uses this case to advocate for a human rights-based strategy in the 2015 climate agreement, noting that climate actions must respect and protect human rights.

The document asserts that fossil and biological carbon operate on fundamentally different timescales and cycles, making them non-fungible. While fossil carbon is permanent, biological carbon is subject to rapid fluxes and risks of reversibility from fires, pests, or rising temperatures. The author contends that relying on biological offsets to mitigate fossil emissions is scientifically unsound and practically limited by land area and nutrient requirements, concluding that emissions from both sources must be addressed in parallel rather than through offsetting.

The document argues that the Clean Development Mechanism (CDM) should be ended by 2020 because it undermines domestic climate action, increases global greenhouse gas emissions through 'junk' credits, and violates human rights. It specifically urges UNFCCC Heads of Delegation and the ICAO Council to stop allowing CDM credits to be used for Nationally Determined Contributions (NDCs) and aviation emissions targets.

The policy brief warns that the Kyoto Protocol's market mechanisms created an 11 gigatonne 'hot air' loophole due to inflated greenhouse gas estimates, particularly in Eastern European countries. It argues that allowing the carry-over of these credits or early action credits into the post-2020 Paris agreement would undermine climate goals and fail to drive real mitigation. The author recommends that eligibility for market mechanisms be restricted to parties with ambitious, quantified carbon budgets and that early action in developing countries be supported through new climate finance rather than credits.

The briefing argues that allowing 'hot air' credits—surplus units from the Kyoto Protocol or inflated NDCs—threatens global climate targets. It proposes four 'damage control measures': prohibiting the use of Kyoto Protocol units (CERs, ERUs, AAUs) after 2020; limiting the transfer of units to 1% of 2010-2012 average annual emissions; prohibiting the carry-over of Article 6.2 ITMOs across NDC periods; and limiting the lifetime of Article 6.4 emission reductions to five years with restricted banking.