Networking Carbon Markets : Key Elements of the Process
The World Bank’s Networked Carbon Markets (NCM) initiative is collaboratively exploring the post-2020tools, services and institutions needed to enhance the transparency, comparability, and fungibility of heterogeneous climate actions, for a connect...
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| Language: | English en_US |
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World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/288301481112027415/Networking-carbon-markets-key-elements-of-the-process http://hdl.handle.net/10986/25750 |
| Summary: | The World Bank’s Networked Carbon
Markets (NCM) initiative is collaboratively exploring the
post-2020tools, services and institutions needed to enhance
the transparency, comparability, and fungibility of
heterogeneous climate actions, for a connectedinternational
carbon market. The cost and efficiency benefits of linking
will be important for engendering more climate action and
supporting the global developmentalgoal to limit global
warming to 2°C and aim to limit it to 1.5°C. The NCM
initiative aims to enable comparison of different mitigation
actions and trade across differentmitigation outcomes in a
way that is: inclusive; transparent; efficient; and has
environmental integrity. It is founded on the assumptions
that firstly, the linking ofdiverse and heterogeneous
mitigation actions is desirable;secondly, that governments
and market participants needinformation about the schemes
with which they enter transactions and the assets they
acquire through those transactions; and thirdly, that
governments should retainthe sovereignty to act on the
information about those other mitigation actions and assets
as they see fit. Generally, the form of any linking
arrangement will rangefrom a very loose alignment (soft
link) to a very tight alignment of key elements (a hard
link). Hard linking requires aligning the design featuresof
mitigation actions—some of these design features may be
easily reconcilable among the linking partners,while others
may not. Recognizing that aligning mitigation actions can be
a lengthy and costly process, especially once a mitigation
action has already been implemented,“networking” is one form
of ‘soft’ linking that can offer an alternative solution.
Rather than seeking to align mitigation actions, networking
is about facilitating trade of the outcomes of those actions
by recognizing differences and placing a value on these
differences. The services and institutions developed through
the NCM initiative might be introduced in a phased manner,
initially supporting countries to design robust mitigation
actions and facilitating comparability and linkage within
countries.It is intended that these services and
institutions could help to facilitate linkage bilaterally,
before being extended to markets on a regional basis—perhaps
through ‘carbonclubs’—and in the long term helping markets
to link on a global basis. |
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