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The document argues that the EU Emissions Trading System (EU ETS) has provided excessive subsidies to German heavy industry through free allowances, resulting in €4.5 billion in windfall profits for companies like ThyssenKrupp and ArcelorMittal from 2008 to 2014. It contends that these allocations cost the German government €29.7 billion in lost auction revenues and stifle innovation by reducing the incentive to decarbonize. The briefing recommends phasing out free allocations in favor of 100% auctioning and investing the proceeds into low-carbon technologies.

The document analyzes the financial impact of 'carbon leakage' rules within the EU ETS in the Netherlands from 2008 to 2014. It finds that energy-intensive industries generated over €1 billion in windfall profits through surplus allowances, offsets, and cost-pass through to customers. Specifically, Tata Steel, Shell, and Chemelot are identified as major beneficiaries. The brief highlights that the Dutch government missed out on at least €6.4 billion in auctioning revenues due to free allocations, which it argues reduces incentives for industrial decarbonization. It recommends phasing out free allocations, introducing a tiered approach to carbon leakage, and increasing investments in climate-friendly innovation.

The document argues that the EU ETS 'carbon leakage' rules, which provide free emission allowances to prevent companies from relocating to countries with weaker climate policies, have instead generated over €3 billion in windfall profits for UK energy-intensive industries from 2008 to 2014. These profits were primarily driven by cost-pass through, surplus allowances, and the use of low-cost international offsets. The brief highlights that the UK government missed out on at least €16.3 billion in auctioning revenues due to these free allocations, reducing funds available for the low-carbon transition. It specifically identifies Tata Steel, Lafarge, Hanson Cement, and Total as the highest profiting corporations. The author recommends phasing out free allocations, introducing a tiered leakage approach, and increasing the share of auctioned allowances to 100% to avoid further subsidies for pollution.

The document analyzes how the 'carbon leakage' mechanism in the EU ETS allowed heavy industry in 19 European countries to earn over €24 billion in windfall profits between 2008 and 2014. It contends that these subsidies reduce incentives for decarbonization and deprive governments of auctioning revenues, while evidence for actual carbon leakage remains absent. The brief recommends phasing out free allocations in favor of 100% auctioning to fund low-carbon innovation.

The document assesses the impact of 'carbon leakage' rules within the EU ETS from 2008 to 2014, finding that free pollution permits resulted in over 4 billion in windfall profits for heavy industry. It highlights that these subsidies benefit specific sectors like iron, steel, and cement, and primarily accrue in countries such as Germany and the UK. The brief contends that these rules reduce incentives for decarbonization and deprive governments of approximately 137 billion in potential auctioning revenues. It recommends phasing out free allocations in favor of 100% auctioning to align with the polluter-pays principle and the global landscape following the Paris agreement.

The document discusses the conclusion of negotiations to link the EU ETS and the Swiss ETS, warning that the lack of transparency regarding the agreement's terms makes it unclear if the EU's 2030 domestic emission reduction targets will be undermined. It argues that linking could allow foreign allowances to enter the EU market, potentially contradicting the goal of achieving a 40% reduction through domestic means. The author outlines several conditions the agreement should meet to be acceptable, including the exclusion of international offsets from 2021 and the application of the Market Stability Reserve to the Swiss scheme.

Carbon Market Watch asserts that the EU ETS is currently ineffective, citing a carbon price drop below €6 per tonne as evidence. The organization calls for a steeper Linear Reduction Factor—suggesting an annual decrease of at least 4.2% to achieve decarbonisation by 2040—and the permanent cancellation of surplus allowances. It further argues that the concept of 'carbon leakage' is unsupported by evidence and that the proposed €160 billion in free pollution permits for heavy industry hinders low-carbon investment and risks creating windfall profits.

The policy brief examines the risks of including the LULUCF sector in the EU's 2030 climate framework, specifically the danger that carbon sinks could be used to reduce the decarbonization efforts of sectors like transport and manufacturing. It identifies four primary reasons why LULUCF is unfit for integration with other climate instruments: high data uncertainty (32% compared to 1% for fossil fuels), incomplete accounting methods that allow for over-crediting, the non-permanence of biological carbon stores, and the need for carbon removals to be additional to, rather than replacements for, emission reductions. The author highlights specific accounting flaws, such as 'Gross-net accounting' and 'forest management reference levels' (FMRL), which may allow Member States to generate unearned credits. Additionally, the brief criticizes the assumption of biomass carbon neutrality, noting that emissions from burning wood are often unaccounted for in the EU ETS or ESD. The document recommends that LULUCF be maintained in a separate pillar, that land-use offsets be prohibited, and that biomass sustainability criteria be strictly enforced.

The document argues that international aviation emissions grew by over 75% between 1990 and 2012 and could increase by 300% by 2050 under a business-as-usual scenario. It critiques the ICAO's proposed global market-based mechanism (GMBM), which aims for 'carbon neutral growth 2020' starting in 2021, citing concerns over lack of transparency, non-binding goals, and low environmental standards. Carbon Market Watch recommends that the GMBM include mandatory targets, a 'negative list' of ineligible project types (such as fossil fuel power plants and most LULUCF projects), and strict credit quality criteria to ensure real and permanent emission reductions.

The document argues that international aviation emissions grew by over 75% between 1990 and 2012 and could increase by up to 300% by 2050 under a business-as-usual scenario. It critiques the ICAO's proposed global market-based mechanism (GMBM), specifically the 'carbon neutral growth 2020' goal, for lacking binding targets and sufficient environmental standards for offset credits. Carbon Market Watch recommends that the GMBM include a mandatory target to limit warming to 1.5°C, a review clause every three years, and a 'negative list' to ban low-quality offset projects such as large hydro and REDD+. The toolkit urges NGOs to lobby governments and airlines ahead of the 39th ICAO General Assembly in October 2016 to ensure transparency and environmental integrity in the aviation sector's climate response.

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.

The document reports on a COP21 side event regarding Nationally Appropriate Mitigation Actions (NAMAs). Speakers argued that NAMAs currently lack regulations on stakeholder engagement and environmental criteria, which undermines their potential for sustainable development. Case studies from Costa Rica and India illustrated how the dominance of the industrial sector and international agencies can marginalize civil society and informal workers, such as wastepickers. The event concluded that universal safeguards, including grievance mechanisms and transparent monitoring, reporting, and verification (MRV) systems, are essential to ensure NAMAs are community-led and effective.

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 author contends that international aviation and shipping, which together account for approximately 5% of global CO2 emissions, are being overlooked in Paris negotiations despite projected emission growth of up to 270% by 2050. The text criticizes the removal of references to the '2C objective' and levy schemes for the Adaptation Fund from draft texts and calls for the ICAO and IMO to provide transparent annual emissions data.

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 warns that including land use in climate targets can lead to 'cheating the climate' by allowing countries to replace necessary fossil fuel reductions with unreliable and non-permanent carbon offsets. It highlights specific risks in the US, EU, and Russia, where poor accounting rules or high uncertainty regarding LULUCF emissions could dilute overall mitigation efforts. The author advocates for treating carbon sequestration in forestry and agriculture as a complementary contribution to climate action, rather than a direct substitute for emissions cuts in other sectors.

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.