Implementing market mechanisms in the Paris era: the importance of bureaucratic capacity building for international climate policy

Steinebach, Yves; Limberg, Julian

doi:10.1080/13501763.2021.1925330

Cited by 12 publications

(4 citation statements)

References 28 publications

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“…In other words, administrative capacities are indispensable for the smooth operation and delivery of policies. The extent to which implementing authorities can carry out the respective activities depends on their human capacity and the financial, technical, and organizational resources available [24].…”

Section: The Deficiency: Implementing Challenges Caused By Pre-existi...mentioning

confidence: 99%

Climate Change and Inequality: The Effectiveness and Potential Improvements of the Existing Approaches

Liu¹,

Guo

et al. 2022

SHS Web Conf.

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This paper examines the relationship between climate change and inequality, evaluates three existing approaches from both macro principles and micro practices, and proposes the potential improvements for those approaches. Available evidence indicates that climate change exacerbates inequality globally and the existing approaches are insufficient and still need to be more aggressive. More specifically, the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC) in the United Nations Framework Convention on Climate Change (UNFCCC) is blunt to effectively address climate change and respond to inequality even by distributing the common responsibilities differently to the individual countries. Developed countries should take the responsibility to finance climate change due to the principle “the polluter pays” and the obligation to protect human rights; however, developed countries have not yet met their climate finance obligations. Similarly, the international carbon market has been viewed as a feasible measure, while additional actions are still needed to respond to the inequalities exacerbated by climate change.

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Section: The Deficiency: Implementing Challenges Caused By Pre-existi...mentioning

confidence: 99%

Climate Change and Inequality: The Effectiveness and Potential Improvements of the Existing Approaches

Liu¹,

Guo

et al. 2022

SHS Web Conf.

View full text Add to dashboard Cite

show abstract

“…It defines cooperative approaches for "internationally transferred mitigation outcomes" and is often seen as the ideal tool for bilateral exchanges and cooperation in addition to the NDCs (Dietzenbacher et al 2020;Franke et al 2020). Article 6.4 is often considered the basis for establishing a "mechanism" to implement carbon markets under the Paris Agreement (Schneider et al 2020;Steinebach and Limberg 2021). Article 6.8 is considered the basis for separate "non-market mechanisms" (EBRD 2017; Asadnabizadeh 2019).…”

Section: Political Governance Innovationmentioning

confidence: 99%

Rationale for a Climate Club Embedded in Article 6 of the Paris Agreement – A Pathway to Carbon Neutrality

Stua¹,

Nolden²,

Coulon³

2021

Preprint

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Recent times have witnessed an increasing number of countries and private firms pledging carbon neutrality by mid-century. Whilst representing a significant improvement in intentions to tackle climate change, such pledges lack substance and structure. For instance, individual pledges lack coordination and aggregation among peers, while strategies and measures to achieve ambitious targets are largely absent. Moreover, current disagreements obstructing progress in international climate change negotiations further undermine the reliability of carbon neutrality objectives. Effective international policies are needed to foster aggregate mitigation ambitions and the creation of adequate supporting mechanisms. This theoretical paper describes a governance innovation aimed at overcoming such shortfalls and disagreements through a unifying yet customizable pathway towards carbon neutrality. It does so by first outlining a political governance framework based on a climate club interpretation of Article 6 of the Paris Agreement. Secondly, it proposes carbon emission mitigation effort sharing on a per capita basis to ensure efficiency, equity and political feasibility. Thirdly, this paper describes how the supply of certified mitigations of carbon emissions required to satisfy effort sharing-based demand can be assetized as carbon credits by operationalizing Article 6 as a joint certification mechanism. The resulting governance architecture for managing demand and supply of mitigations shifts efforts to tackle climate change from a ‘problem-driven’ cost approach to ‘opportunity-driven’ value creation pathways towards carbon neutrality.

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“…These nationally determined contributions are communicated to the UNFCCC by more than 190 signatories (Stua, 2017). The agreement allows for a range of flexible channels through which commitments can be achieved, including bilateral and multilateral cooperative approaches between countries (so‐called “International Transferred Mitigation Outcomes” described in Article 6.2), non‐market approaches (as described in Articles 6.8 and 6.9 of the Agreement) as well as through the Global Carbon Market Mechanism (GCMM) (as described in Article 6.4), a mechanism which allows a firm in one nation to sell emission reduction credits to a firm in a different country (Steinebach & Limberg, 2022). Within pre‐existing market mechanisms, both regulated (compliance) markets and voluntary markets exist.…”

Section: Introductionmentioning

confidence: 99%

Valuing investments in the Global Carbon Market Mechanism as compound real options: Lessons from the Clean Development Mechanism

Cassimon

Engelen

Peters

et al. 2023

Sustainable Development

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The Global Carbon Market Mechanism (GCMM) aims to incentivize national or sub‐national actors to invest in climate mitigation projects at the same time as limiting the global costs of tackling global warming. Using the worked example of the Clean Development Mechanism (CDM), this article shows that the exact valuation of a mitigation project requires the application of compound real options techniques, as it is able to account for the multi‐staged nature of a project cycle, as well as the two basic sources of uncertainty (the probability of not moving successfully to the next stage of the cycle, technical risk, and the uncertainty related to future emission reduction credit prices, market risk). Using parameters from the global database of registered CDM projects, this article illustrates that longer than projected lead times, higher than projected transaction costs, and higher than projected rates of failure lowered the value of investing in CDM projects considerably, alongside offset prices and their variability. Regulators of and participants within the patchwork of existing emission trading schemes and market mechanisms, including the GCMM (Article 6.4 of the Paris Agreement), could benefit through wider appreciation of the benefits of this valuation method.

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Implementing market mechanisms in the Paris era: the importance of bureaucratic capacity building for international climate policy

Cited by 12 publications

References 28 publications

Climate Change and Inequality: The Effectiveness and Potential Improvements of the Existing Approaches

Climate Change and Inequality: The Effectiveness and Potential Improvements of the Existing Approaches

Rationale for a Climate Club Embedded in Article 6 of the Paris Agreement – A Pathway to Carbon Neutrality

Valuing investments in the Global Carbon Market Mechanism as compound real options: Lessons from the Clean Development Mechanism

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