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The document examines the role of land-based offsets in emissions trading systems across the EU, Australia, Canada, the US, and New Zealand, as well as voluntary standards. It identifies that differences in the stringency of additionality and the management of carbon reversibility (non-permanence) are primary obstacles to linking these systems. While most schemes use offset mechanisms, New Zealand's approach of including deforestation within the cap is highlighted as a way to bypass additionality and reversibility issues. The paper concludes that harmonizing the generation of forestry offsets is essential for successful future linkage.

The report identifies that the creation of expiring units (tCERs and lCERs) and complex methodologies have severely diminished investment confidence in A/R CDM projects, leading developers to prefer voluntary markets. It recommends replacing expiring units with a risk-buffer system, simplifying methodologies, and potentially extending national accounting systems (Article 3.3) to non-Annex I countries to increase mitigation potential, which is estimated at 10,000 MtCO2 per year by 2030 in developing countries.

The report finds that CDM projects frequently underperform, with only 76% of forecasted CERs actually issued by June 2007. This underperformance is attributed to overestimations by consultants and validators, as well as implementation and monitoring difficulties. Waste projects are the worst performers, while N2O projects often exceed expectations. The study identifies additionality demonstration as the primary cause of project rejection, particularly for large-scale projects and cement blending activities in India and Brazil. Bilateral projects, especially those with European participants, show higher CER issuance rates than unilateral projects. The report also highlights deficiencies in stakeholder consultation and the lack of quantifiable indicators for sustainable development in host countries like China, India, and Brazil.

The document analyzes four scenarios for an international carbon market: global trading, formal linking of domestic ETS, indirect linking via credits, and a mixed approach. It focuses on the formal linking of the EU ETS with emerging systems in the US (RGGI, California), New Zealand, and Australia. The authors argue that for linking to be effective and environmentally sound, partners should share similar levels of ambition and strategic climate goals, such as the EU's 2°C target. The report identifies price caps, differing levels of ambition, and the treatment of Assigned Amount Units (AAUs) as primary barriers to linking. It proposes the creation of an international clearinghouse to coordinate regulation and suggests a 'no-regret' working program for the International Carbon Action Partnership (ICAP) focusing on the harmonization of registries, monitoring, reporting, and verification (MRV) standards, and allocation procedures.

The study finds that CDM projects generally overestimate their emission reduction potential, with actual CER issuance reaching only 76% of the amount predicted at registration. Performance varies significantly by project type, with N2O projects over-performing (129%) and animal waste projects under-performing (28%). The analysis also indicates that in-house project development generally outperforms the use of large external consultancies, and that India showed the best host-country performance (122%) compared to China (55%) and Brazil (90%).

The document examines the dominance of gas pipeline refurbishment projects within Russia's JI portfolio under Track 2, specifically analyzing whether these projects are 'additional' or would have occurred due to economic incentives. It highlights the role of Gazprom's institutional control over distribution networks and the lack of historical leakage data, which complicates the establishment of accurate emission baselines.

The document examines the prevalence of gas pipeline refurbishment projects in Russia's Joint Implementation (JI) portfolio, which account for 53% of submitted projects. It analyzes the technical process of reducing methane leaks, the complex institutional structure of Russian gas distribution involving Gazprom and regional companies, and the debate over whether these projects are 'additional' or would have occurred due to economic incentives. The authors argue that while the projects are technically viable and potentially profitable, institutional barriers and a lack of historical leakage data complicate the verification of emission reductions.

The paper analyzes nine Brazilian CDM projects, finding that forecasted CER generation typically decreases as projects move from validation to issuance due to methodology changes, lower-than-expected output, and delays. While additionality arguments are generally credible, they are sometimes weakened by the rapid spread of technology. The study also concludes that the Brazilian national stakeholder consultation process is insufficient for gathering local concerns, as fewer than 5% of projects receive comments through the standard procedure.

The paper evaluates six Chinese CDM projects (four registered and two in validation) to assess how they perform against their initial designs. It finds that forecasted Certified Emission Reductions (CERs) fluctuate significantly as projects progress, often due to new standardised baseline information from China's Designated National Authority (DNA) and technological barriers. All sampled projects claim investment barriers, but only half provide a complete investment analysis. The study also notes a lack of standardised stakeholder consultation procedures in China, with written surveys being the most common method. While projects often align with stakeholder expectations regarding local employment, sustainability benefits are not described quantitatively in the Project Design Documents (PDDs).

The analysis of 23 Indian CDM projects reveals a consistent gap between optimistic initial forecasts and actual CER issuance, with an average reduction of 23.1% in forecasted CERs till 2012. The study finds that additionality argumentation is often poor, frequently lacking independent evidence and relying on unconvincing investment barriers. Furthermore, stakeholder consultation processes are often superficial, frequently conflating general regulatory permits with CDM-specific engagement, and the delivery of sustainability benefits remains largely unquantified and insufficiently monitored.

The document examines the Ukrainian Joint Implementation (JI) portfolio as of December 2007, which included 19 projects expected to reduce emissions by 49.8Mt of CO2e. Through three case studies—the Podilsky cement plant, the ISTIL steel mill, and the Zasyadko coal mine—the paper explores how these projects were financed, their lead-times (ranging from 2.5 to 5 years), and the specific institutional and technical hurdles they faced. It highlights that while the Ukrainian approval system is functional, the window for industrial JI projects is closing due to the post-2012 deadline of the first Kyoto commitment period.

The document argues that the G-8 must ensure responses to high oil prices do not increase carbon-intensive energy investments. It proposes legally-binding cap-and-trade systems for international aviation and shipping, the creation of Low Carbon Technology Innovation and Diffusion Centres in developing countries, and a shift toward innovative, strategic funding for climate adaptation. It further advocates for a post-2012 UNFCCC framework with differentiated but legally binding emission targets for both developed and major developing nations, and suggests restructuring the International Energy Agency (IEA) to support a global energy transition.

The paper argues that the EU cement sector is more exposed to carbon leakage than generally assumed, particularly in coastal regions. Using two models with a CO2 price of 30 €/t, the author finds that short-term import levels in coastal regions would rise from 13% to 25%, with an overall EU leakage rate of 65%. In the long term, EU cement capacity is projected to decline by 13% as imports become more attractive during peak demand. The author concludes that while output-based allocation might mitigate financial pressure, a severe world recession would likely induce a similar industrial restructuring to that of a full auctioning scheme.

Ukraine began approving Joint Implementation (JI) projects in May 2007, with 13 projects approved by November 2007. The system is managed by the Ministry of Environmental Protection (MEP), which utilizes a two-stage approval process involving a Letter of Endorsement (LoE) and a Letter of Approval (LoA). While the government prioritizes energy efficiency and renewable energy, the system faces administrative delays due to a lack of staff—only four individuals manage JI—and a lack of legislation regarding the transfer and taxation of Emission Reduction Units (ERUs). Despite these hurdles, project developers generally view the system as reasonable and supported by political will.

The document analyzes 38 Russian and 15 Ukrainian JI projects submitted to the JISC by September 2007. It finds that while Russia has a larger total volume of projected emission reductions, Ukraine's portfolio is more diverse and shows a higher rate of technology transfer and foreign investment relative to its economy. Russia's portfolio is heavily dominated by gas pipeline refurbishment, whereas Ukraine's is led by industrial energy saving and coal mine methane projects. The author attributes these differences to institutional readiness, with Ukraine having established a more effective project approval system than Russia.

The report examines how asymmetric CO2 pricing leads to carbon leakage and competitiveness distortions, particularly in trade-exposed, energy-intensive sub-sectors. It analyzes quantitative tools like 'Value at Stake' and qualitative strategic factors to identify vulnerable industries. The text evaluates four primary policy responses: free allowance allocation, direct state aid, sectoral agreements, and border adjustments/export taxes, weighing their economic efficiency against legal risks under WTO and EU law.

The document analyzes the impact of climate policy uncertainty on investment decisions, highlighting how different actors—such as oil majors, utilities, technology developers, and banks—respond to CO2 price volatility and regulatory ambiguity. It explores various economic appraisal methods, including real options and risk premiums, to demonstrate how uncertainty can delay investments or bias them toward fossil fuels. The author argues that while governments value policy flexibility, stronger commitments and intermediary targets are necessary to provide the credibility required for private sector investment in low-carbon technologies.

The document evaluates two mechanisms to prevent emissions leakage: output-based allocation and sectoral agreements. It concludes that output-based allocation can reduce leakage if applied to the first tradable intermediary product, but it often undermines incentives for innovation and product substitution. Sectoral agreements are deemed more promising if led by governments rather than voluntary private action, potentially utilizing financial incentives and border adjustments to ensure a level playing field and long-term CO2 price internalization.

The submission argues that the EU ETS is the only credible mechanism for a common carbon price in Europe but requires reform post-2012 to be effective. The authors advocate for a shift from free allocation to auctioning to remove investment distortions and 'early action' problems. To protect low-carbon investments from price volatility, they suggest reserve prices for auctions or put options. While acknowledging carbon leakage, the report asserts it only affects a few specific sub-sectors—such as semi-finished steel and clinker—and suggests that border adjustments or sectoral agreements are preferable to free allocations, which are viewed as a second-best, temporary option.

The document examines Russia's progress in meeting Kyoto Protocol compliance requirements and the delays in establishing a domestic Joint Implementation (JI) approval system. It highlights a general lack of political priority for climate change within Russia, where the regime is often viewed as a tool for wealth redistribution. While institutional compliance is nearing completion, inter-ministerial conflict and uncertainties over property rights hinder the launch of JI projects. The paper also notes that domestic debate on post-2012 climate positions has not yet begun, despite Russia's role as the world's third-largest emitter.