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The Paris Agreement establishes a global commitment to limit warming to well below 2°C, pursuing efforts for 1.5°C, and introduces a five-year ambition ratcheting mechanism. It creates a new mitigation mechanism that moves beyond pure offsetting and includes human rights protections in its preamble. While it acknowledges international aviation and shipping emissions, these remain outside national targets. The agreement necessitates an update to the EU's 2030 climate target to align with the 1.5°C goal.

Carbon Market Watch criticizes a proposed 'mechanism to support sustainable development' in the Paris climate treaty negotiations, asserting that it allows developed countries to generate and use carbon offsets without restriction. The organization warns that including land use carbon offsets for non-permanent sequestration would create a 'gigatonne loophole' and undermine climate targets. Additionally, the statement notes the removal of a proposed financial levy on carbon prices and highlights a counter-proposal from an alliance of developing countries (LMDC, Arab Group, and ALBA Group) to remove the offsetting mechanism in favor of cooperative approaches for mitigation and adaptation.

Carbon Market Watch expresses concern over the potential for continued offset credit trading in the L.6 text, arguing that offsets reduce the ambition of emissions caps and hinder the goal of limiting temperature increases to 1.5ºC. The author suggests that the Clean Development Mechanism (CDM) structures should be repurposed as a channel for climate finance rather than an offset mechanism to support mitigation outcomes and avoid double counting.

The document warns that the Paris climate treaty risks failure if it allows 'hot air' (non-real emission reductions) to be used for compliance. Drawing on failures of the Kyoto Protocol's CDM and JI mechanisms, and the oversupply of permits in the EU ETS, the author advocates for the cancellation of surplus permits, the creation of a robust international accounting system to prevent double counting, the end of carbon offsetting in favor of direct finance for developing countries, and the exclusion of non-permanent land use offsets from carbon markets.

The document outlines a diverse landscape of climate financing for cities, categorised into local internal revenues, external third-party sources, and international funds. Local options include property and land taxes, user fees, development charges, and Tax Increment Financing (TIF), as well as 'intracting' for energy retrofits. External sources feature Energy Performance Contracting (EPC), green bonds, and crowdfunding. International support is available through climate funds like the Green Climate Fund (GCF) and Global Environment Facility (GEF), Multilateral Development Banks (MDBs), and philanthropic organisations, though the authors note that most international funds require cooperation with national governments due to strict fiduciary and creditworthiness standards. The guide emphasizes that while international funds are necessary for large-scale projects, local sources foster greater municipal autonomy and sustainability.

The briefing argues that carbon markets have historically failed to increase climate commitments and have often undermined emissions reductions through 'hot air' loopholes. It recommends that the Paris agreement prevent double counting, ensure that international trading is supplementary to ambitious domestic action, and restrict market mechanisms to countries with adequate carbon budgets. The text notes a shift from a single global UN-led market toward a fragmented landscape of national and regional initiatives, while advocating for a transition from carbon offsets toward direct financial support for climate actions in developing countries.

The document examines the human rights obligations of states and the private sector in the context of climate change mitigation. It analyzes failures in stakeholder consultation and sustainable development within the Clean Development Mechanism (CDM), REDD+, and Nationally Appropriate Mitigation Actions (NAMAs), using case studies from Panama, India, Mexico, and Georgia. The brief concludes that current UNFCCC mechanisms lack sufficient specificity and grievance procedures, recommending that the Paris Agreement explicitly mandate the respect, protection, and fulfillment of human rights in all climate actions.

The document examines Nationally Appropriate Mitigation Actions (NAMAs) as tools for developing countries to achieve mitigation and sustainable development goals. It highlights a significant gap between the high interest in NAMA development and the actual financial support provided, noting that less than 2% of requested support has been offered. The brief argues that the lack of official UNFCCC guidelines for stakeholder consultation and the absence of sector-specific environmental criteria—such as 'negative lists' to exclude harmful technologies—risk promoting 'greenwashing' and locking countries into high-carbon infrastructure. It recommends adopting universal safeguards, harmonized sustainable development assessments, and mandatory guidelines for effective stakeholder engagement, including indigenous peoples, to ensure NAMAs drive true transformational change.

The document examines the risks of using agricultural soil carbon sequestration as carbon offsets. It highlights technical failures in measurement, reporting, and verification (MRV), the non-permanence of biological carbon compared to fossil carbon, and social risks such as land grabbing and the marginalization of small-scale farmers. The author argues that 'Climate Smart Agriculture' often serves as greenwashing for agribusiness corporations. Instead of carbon markets, the report recommends using National Adaptation Plans (NAPs) and Nationally Appropriate Mitigation Actions (NAMAs) to prioritize food security, tenure rights, and sustainable rural livelihoods.

The report finds that the Clean Development Mechanism (CDM) achieved an unintended net mitigation impact of approximately 480 MtCO2e in 2014, reducing global emissions by about 1% because projects continued operating mitigation equipment without issuing offsets due to low market prices. It further analyzes how different Certified Emission Reduction (CER) price points would affect this unintended mitigation, noting that a price of EUR 5 would reduce the unintended impact by over 50% compared to a EUR 2 scenario.

The policy brief highlights how climate mitigation actions under the UNFCCC can infringe on human rights, citing the Sasan coal power project as a case study of forced displacement and pollution. It calls for the Paris agreement to explicitly commit parties to human rights obligations and establish a robust institutional safeguard system, including grievance and monitoring mechanisms, to manage the risks associated with increasing climate finance flows from 2020 onwards.

Carbon Market Watch argues that the Clean Development Mechanism (CDM) requires fundamental reform to remain viable after 2020, specifically to move beyond 'pure offsetting' and ensure human rights protections. The organization recommends establishing a formal grievance mechanism, strengthening civil society participation, and introducing stricter additionality testing to exclude high-emission technologies like coal. It also calls for the removal of conflicts of interest within the CDM Executive Board and the introduction of liability rules for Designated Operational Entities (DOEs) to prevent the issuance of non-additional credits.

The policy brief defines 'hot air' as carbon credits that do not represent real emission reductions, which can increase overall global emissions if used to meet mitigation pledges. It identifies four primary sources of hot air: surplus allowances from emission trading systems, double-counted reductions, non-additional credits from offsetting projects, and non-permanent land-use offsets. To protect the environmental integrity of the Paris agreement, the author recommends regulating carbon market use to exclude surplus pre-2020 units, establishing a robust international accounting and MRV system, shifting from offset credits to direct financial support for developing countries, and banning non-permanent land-use offsets.

Carbon Market Watch recommends that the Green Climate Fund (GCF) avoid the shortcomings of the Clean Development Mechanism (CDM) by implementing strict criteria for additionality, sustainability, and social safeguards in its funding proposals.

UN Special Rapporteur John Knox advocates for the integration of international human rights law into the Clean Development Mechanism (CDM), supporting recommendations from 98 civil society organizations to establish an independent accountability mechanism and improve stakeholder consultation to protect vulnerable populations from the adverse effects of climate mitigation measures.

A coalition of 98 global entities argues that the Clean Development Mechanism (CDM) fails to comply with international human rights obligations, specifically those recognized in the 2010 Cancun Agreements. The letter calls for the establishment of an independent accountability mechanism, the adoption of international sustainable development safeguards, and the implementation of improved stakeholder consultation processes to prevent environmental and social harms.

The document highlights the role of the Clean Development Mechanism (CDM) in diffusing carbon price signals and stimulating private investment in developing countries, while noting a deterioration in project activities and capacities due to declining market conditions. It identifies a significant information gap regarding the current status and barriers facing individual CDM projects worldwide and describes a study that evaluated a representative sample of these projects to extract lessons on national and technology-specific considerations.

The policy brief argues that any use of carbon markets post-2020 must be governed by strict environmental integrity standards to avoid 'hot air' and double counting. It recommends that the Clean Development Mechanism (CDM) undergo fundamental reform, including the adoption of social and human rights safeguards, to remain viable. The brief also calls for the exclusion of early action credits from post-2020 targets and urges the UNFCCC to demand greater emission reductions and adaptation levies from the international aviation (ICAO) and maritime (IMO) sectors. Finally, it advocates for the inclusion of human rights and gender equality protections in the core text of the Paris Agreement.

Carbon Market Watch recommends that the ICAO GMBM exclude high-risk offset projects, including fossil fuel power plants, nuclear facilities, large-scale hydropower, and certain industrial gas destruction projects. The brief highlights that these project types often lack additionality, cause severe social and environmental harm, or suffer from non-permanence. It cites existing exclusions in the EU ETS and other jurisdictions as precedents for maintaining high quality standards in aviation's climate response.

The document examines the fragmentation of social and environmental standards across UNFCCC instruments, including the CDM, REDD+, NAMAs, GCF, and AF. It finds that while some funds like the GCF and AF have robust safeguard policies, others like the CDM and NAMAs lack mandatory monitoring, universal guidelines for stakeholder consultation, or formal redress mechanisms. The author recommends that the Paris climate treaty explicitly mandate the protection of human rights and establish a centralized UNFCCC accountability mechanism and safeguards system to ensure climate actions do not cause adverse social or environmental impacts.