September 17, 2010

Three New OECD Papers on Emissions Trading and Voluntary Markets

Filed under: climate — inece @ 8:54 am

OECD has released three papers exploring new issues in carbon markets, including linking emission trading systems and voluntary markets:

Towards Global Carbon Pricing: Direct and Indirect Linking to Carbon Markets (July 2010)
By R.B. Dellink, S. Jamet, J. Chateau and R. Duval
Emissions trading systems (ETS) can play a major role in a cost-effective climate policy framework. Both direct linking of ETSs and indirect linking through a common crediting mechanism can reduce costs of action. This paper analyses the impact of linking emission trading schemes directly and through the use of offsets. Using a global recursive-dynamic computable general equilibrium model, the effects of direct and indirect linking of ETS systems across world regions are assessed. The analysis in this paper shows, however, that the potential gains to be reaped are so large, that substantial efforts in this domain are warranted.

Voluntary Carbon Markets: How can they serve climate policies?
By Pierre Guigon, BlueNext
This paper aims to examine how voluntary carbon markets can provide a valuable contribution to strengthening domestic and international climate policies. The research shows that the several carbon project certification schemes that have emerged in the voluntary carbon market have developed potential innovative solutions to deal with some of the issues faced by compliance markets.

Buying and Cancelling Allowances as an Alternative to Offsets for the Voluntary Market: A Preliminary Review of Issues and Options
By Anja Kollmuss and Michael Lazarus, Stockholm Environment Institute
In recent years, businesses, local governments and individuals have set goals for reducing their emissions of greenhouse gases. In addition to directly reducing their own emissions, many of these entities have purchased carbon offsets to help achieve their mitigation goals. Yet establishing offset quality can be difficult, due to issues such as additionality, measurement, leakage, permanence, and verification. This paper explores scenarios under which, as an alternative to offsets, voluntary buyers could instead buy and cancel allowances from compliance markets.

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