Publication: Country Perspectives: Opportunities and Challenges for International Voluntary Carbon Markets in the Context of the Paris Agreement
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2021-04
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2021-05-05
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The Paris Agreement, with its universal requirement on all countries to submit nationally determined contributions (NDCs), marks a significant change for the framework of international cooperation through carbon markets. With all countries committing themselves to climate action to reduce emissions and achieve their NDCs, the ability to exert exclusive claims over the emission impact from carbon market investments and count them towards emission targets is becoming increasingly complicated. This study seeks to understand perspectives of potential host countries on the role international voluntary carbon markets might play in the context of their NDCs and the Paris Agreement. In doing so, it explores emerging issues and challenges these markets may face and clarifies key aspects host country governments may need to consider in relation to their market participation. The study takes voluntary carbon markets to refer to carbon market transactions that are undertaken by entities on a voluntary basis and not as a result of any policy-related regulatory requirements. Recent years have already seen traditional distinctions between voluntary and regulatory markets break down as standards bodies and the push for environmental and social co-benefits begin to cross the old boundaries. And increasingly, companies are adopting net-zero emission targets, which has been accompanied by a surge of interest and investment in the voluntary carbon market. Indications are that voluntary action and voluntary demand for credits is on an upward trajectory and expected to witness substantial growth in the coming years. A greater understanding of host countries’ roles in international voluntary carbon markets, aligned with the Paris Agreement, will help to build on this momentum.
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“Partnership for Market Readiness. 2021. Country Perspectives: Opportunities and Challenges for International Voluntary Carbon Markets in the Context of the Paris Agreement. © World Bank. http://hdl.handle.net/10986/35538 License: CC BY 3.0 IGO.”
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