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Carbon markets

Carbon market mechanisms

Overview

Carbon markets are a policy instrument than can be utilised to support climate action. As with every other instrument, it depends on the correct use case and effective implementation whether the instrument leads to the desired effect of greenhouse gas emissions reductions, or not. National market instruments require different parameter settings than internationally applied instruments. Carbon markets for cooperative emission reductions between countries are anchored in the Paris Agreement through Article 6 and shall lead to an increase in ambition. Additionally, so called voluntary carbon markets (VCM) operate in an unregulated environment and offer an alternative for other actors to pay for a quantified amount of emissions reductions elsewhere (offsets). The boundaries between these systems are becoming increasingly blurred. ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) also accepts offsets from unregulated programs. Offsets are also a central element of many companies’ net-zero claims. This is almost always counterproductive since the applied approaches lack transparency and integrity and allow to delay or avoid the decarbonisation of their own activities, while still claiming neutrality to the public.

Our carbon market work focusses on:

  • Carbon market instrument integration as part of national climate policy
  • High integrity implementation of Article 6 in line with overall Paris Agreement objectives
  • Quantitative and qualitative assessment of Kyoto mechanisms current impact
  • Credible use cases of voluntary carbon markets (VCM) with integrity
  • Impact and reform needs of CORSIA to address international aviation’s climate impact
  • Methods for evaluating net-zero or climate neutrality claims of governments and companies
  • Alternative approaches to address corporate or individual climate responsibility
Increasing transparency and integrity of corporate climate pledges

NewClimate Institute is partnering with Carbon Market Watch to address key gaps in the evolving landscape of corporate climate pledges...

Appraising policy choices for Article 6 of the Paris Agreement

Rules for the implementation of Article 6 of the Paris Agreement are still under negotiation at the international level, with a key...

Understanding Climate Neutrality and Net Zero Targets

A growing number of countries and companies are setting climate neutrality or “net-zero” targets. Although the apparent growth in...

Informing EU policy options for tackling aviation’s climate impact

A global scheme to regulate the climate impact from international aviation – the Carbon Offsetting and Reduction Scheme for...

CORSIA: Analysis and evaluation of regulating international aviation emissions through offsetting

The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is a flagship regulation of the International Civil...

Future role for voluntary carbon markets after 2020

As we transition from the Kyoto to Paris era, the role for the voluntary carbon market to support climate action faces uncertainty and...

Analysis of pre-2020 developments in the global carbon market

The German Emission Trading Authority (DEHSt) at the Federal Environment Agency (UBA) contracted a consortium, led by NewClimate...

Virtual Article 6 Pilots

Article 6 of the Paris Agreements provides for a new generation of carbon markets under the Paris Agreement. A number of fundamental...

Sustainable development framework for market mechanisms

The potential from synergies between GHG reduction activities and the promotion of sustainable development has not always been...

Technical advisory services “Global Carbon Market”

NewClimate Institute was contracted by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), as part of a larger...

The corporate climate accountability loop
Publication date 20 Sep 2023

Introducing key functions of an accountability system for corporate climate action, and selected spotlights on how to improve the...

Shifting voluntary climate finance to the high hanging fruit of climate action
Publication date 21 Jul 2023

The high hanging fruit of mitigation potential refers to the technologies and measures to decarbonise emission sources that remain...

A guide to climate contributions: Taking responsibility for emissions without offsetting
Publication date 05 Jul 2023

This document aims to help address a growing demand for guidance on how companies can take responsibility for their emissions by...

Corporate Climate Responsibility Monitor 2023
Publication date 13 Feb 2023

The Corporate Climate Responsibility Monitor assesses the transparency and integrity of 24 major companies’ climate pledges and...

Net Zero Tracker: Recommendations and current realities
Publication date 15 Nov 2022

Last week saw the UN publish its high-level expert report on ensuring the credibility and accountability of net zero pledges by non...

Navigating Energy Transitions: Mapping the road to 1.5°C
Publication date 21 Oct 2022

NewClimate Institute led the analyses of Chapter 5.3 of the ‘Navigating Energy Transitions: Mapping the road to 1.5°C’ report: The...

Evaluating corporate target setting in the Netherlands
Publication date 05 Jul 2022

An assessment of the climate action plans of 29 Dutch companies and financial institutions In this publication, we scrutinise the...

Corporate Climate Responsibility Monitor 2022
Publication date 07 Feb 2022

The Corporate Climate Responsibility Monitor, conducted by NewClimate Institute in collaboration with Carbon Market Watch, assesses the...

Analysis of options for determining OMGE, SOP and Transition within Article 6
Publication date 31 May 2021

Rules for the implementation of Article 6 of the Paris Agreement are still under negotiation at the international level, with a key...

Results-Based Finance in the Paris Era
Publication date 16 Dec 2020

In order to reach the goals of the Paris Agreement, it is essential to rapidly move from a zero-sum offsetting approach towards rapid...

Estimation of the carbon offset credit supply potential

The carbon offset credit supply potential tools provide bottom-up estimates of the volume of credits that could be issued under a range...

Reaction: Samsung Electronics’ joining RE100 and committing to net zero by 2050
Publication date 14 Sep 2023

Q&A with Thomas Day from NewClimate Institute – 14 September 2023 September 15 is the 1st anniversary of Samsung Electronics (hereon...

Reaction: Apple unveils its first carbon neutral products
Publication date 14 Sep 2023

Q&A with Thomas Day and Reena Skribbe from NewClimate Institute – 14 September 2023 Apple announced its first carbon neutral products...

FAQs - Climate contributions
Publication date 05 Jul 2023

In our document "A guide to climate contributions: Taking responsibility for emissions without offsetting" we aim to help address a...

Press Release – Corporate Climate Responsibility Monitor 2023
Publication date 13 Feb 2023

Climate pledges of leading companies are misleading and go less than halfway of what is required by 2030 Berlin (13 February 2023) –...

FAQs - Corporate Climate Responsibility Monitor 2023
Publication date 13 Feb 2023

The authors of the 2023 Corporate Climate Responsibility Monitor shared their perspectives on questions related to the analysis, and...

Urgent need for regulatory intervention to turn the tide on misleading corporate climate pledges
Publication date 03 Nov 2022

09.11.2022: Update with reaction to the announcement from the High Level Expert Group (HLEG) The UN High-Level Expert Group on Net-Zero...

Major Dutch companies’ climate pledges fall short of what is needed for Paris Agreement
Publication date 05 Jul 2022

Berlin, 5 July 2022 – New analysis published today shows that major Dutch companies only commit to reduce their emissions by 19% by...

Q&A with the authors: Corporate Climate Responsibility Monitor 2022
Publication date 07 Feb 2022

Companies around the world are increasingly alert to the climate emergency, facing calls from a growing range of stakeholders to take...

Press Release – Corporate Climate Responsibility Monitor 2022
Publication date 07 Feb 2022

Go to the report / Read the Q&A with the authors Download the methodology / Watch press conference Major companies largely fail net...

Switzerland’s bilateral agreements to offset their emissions set a poor precedent for ambition ahead of COP26
Publication date 28 Oct 2021

Photo by Mostafa Meraji through Wikimedia Commons under CC BY-SA 3.0. No changes were made except for a format change. Switzerland has...

Virtual event: Achieving climate neutrality through corporate transition plans (CSDDD)
Venue Online
Date 03 May 2023
Start time 02:30 pm

This virtual event, organised by the European Environment and Sustainable Development Advisory Councils Network (EEAC Network), focused...

Virtual launch: Corporate Climate Responsibility Monitor 2023
Venue Online
Date 13 Feb 2023
Start time 03:00 pm

The 2023 edition of the annual Corporate Climate Responsibility Monitor (CCRM) thoroughly and objectively analyses the climate pledges...

COP27: Paris-compatible sector benchmarks to help in defining national and corporate climate action
Venue COP27, WeMeanBusiness Pavilion, Auditorium A
Date 14 Nov 2022
Start time 02:30 pm

The event presented and discussed the results of multiple years of work to develop and update Paris-compatible sectoral benchmarks...

COP27: The carbon market debate: are carbon credits necessary to achieve net-zero?
Venue COP27, IETA BusinessHub, Side Event Room
Date 10 Nov 2022
Start time 09:00 am

This session featured diverse voices debating whether carbon credits and offsets are necessary to achieve net-zero emissions. A panel...

Corporate net-zero commitments: PR stunt or part of the solution?
Venue Online, ClientEarth Summit 2022
Date 11 Oct 2022
Start time 11:00 am

Over the last 18 months, companies have been eager to announce their net-zero commitments. Business evangelists laud the green ambition...

Press conference: Corporate Climate Responsibility Monitor 2022
Venue Online
Date 07 Feb 2022

Thomas Day and Silke Mooldijk presented the findings of the Corporate Climate Responsibility Monitor 2022 at a joint virtual press...

Online event: The potential impact of transitioning CDM units and activities to the Paris Agreement
Venue Online
Date 21 Oct 2021

Harry Fearnehough (NewClimate) and Lambert Schneider (Öko Institut) presented updated research on the potential supply of credits from...

Event: Costs and climate impact of offsetting emissions under CORSIA
Venue Innovate4Climate in Frankfurt
Date 22 May 2018

Carsten Warnecke, Thomas Day, Harry Fearnehough and Lambert Schneider presented on "Costs and climate impact of offsetting emissions...

Event: Overviews on the implementation of NDCs on a sectoral level (Innovate4Climate)
Venue Innovate4Climate, Barcelona
Date 24 May 2017

Thomas Day from NewClimate Institute presented findings from eight briefing papers about coverage of sectors in NDCs and prospects for...

Event: Vulnerability of CDM Projects for Discontinuation of Mitigation Activities (Innovate4Climate)
Venue Innovate4Climate, Barcelona
Date 22 May 2017

Thomas Day from NewClimate Institute presented findings from the report "Vulnerability of CDM projects for discontinuation of...

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