Ambrosi, Philippe2017-06-132017-06-132011-10-31https://hdl.handle.net/10986/27093This note examines how to maximize the benefits from the use of market instruments in support of developing countries' low-emission development priorities. First, it briefly surveys the current state and trends of the carbon market, highlighting the main achievements of carbon finance over its decade-long history. Second, it reviews updated scenarios of the scale of future carbon markets and associated financial flows, in light of developments in climate negotiations and domestic markets. Finally, it identifies the necessary steps to scale up carbon market flows in future, on both the demand and supply sides, including the reform of existing mechanisms, and innovation to broaden the scope, scale and reach of carbon markets. The most important determinant of carbon offset market flows to developing countries is clearly the level of international mitigation targets: the more ambitious the targets the greater the scope for such flows. Developed countries can also encourage flows by increasing supplementary limits, which are the proportion of mitigation targets that can be met by purchases from developing countries. Finally, there remains a considerable need for innovation, awareness-raising and capacity building in public and private institutions in developing countries, to increase their participation in the carbon market and build and enabling environment for low-emission development.en-USCC BY 3.0 IGOABATEMENT COSTSABATEMENT POTENTIALACIDACID PRODUCTIONADAPTATION FUNDAFFORESTATIONAGGREGATE EMISSIONSAIRAIR QUALITYALLOCATIONALLOWANCEAUCTIONAUCTION REVENUESBASELINE EMISSIONBASELINE EMISSION INTENSITYBASELINE METHODOLOGYBIODIVERSITY CONSERVATIONBIOGASBIOMASSBIOMASS ENERGYCAPACITY BUILDINGCARBONCARBON ASSETSCARBON BENEFITSCARBON CREDITINGCARBON CREDITSCARBON EXCHANGECARBON FINANCECARBON FINANCE OPPORTUNITIESCARBON FOOTPRINTCARBON FUNDCARBON FUNDSCARBON IN SOILSCARBON INTENSITYCARBON INVESTMENTCARBON MARKETCARBON MARKETSCARBON OFFSETCARBON PRICECARBON PROJECTSCARBON REVENUESCARBON SEQUESTRATIONCARBON TAXCARBON TAXESCARBON TRADINGCERTIFIED EMISSION REDUCTIONSCHEMICAL INDUSTRYCLEAN DEVELOPMENTCLEAN DEVELOPMENT MECHANISMCLEAN ENERGYCLEAN TECHNOLOGYCLEAN TECHNOLOGY FUNDCLEANER TECHNOLOGIESCLIMATECLIMATE ACTIONCLIMATE CHANGECLIMATE CHANGE MITIGATIONCLIMATE POLICIESCLIMATE POLICYCOCO2COALCOMPACT FLUORESCENT LAMPSCOMPLIANCE COSTSCOST EFFECTIVENESSCOST OF ABATEMENTCOST SAVINGSCOSTS OF ABATEMENTDECISION MAKINGDECREASE IN EMISSIONSDEFORESTATIONDEMAND-SIDE MANAGEMENTDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPMENT BANKDIFFUSIONDOMESTIC ABATEMENTDOMESTIC EMISSIONSDOMESTIC MARKETSDROUGHTECONOMIC ACTIVITYECONOMIC GROWTHECOSYSTEMEMISSIONEMISSION ALLOWANCESEMISSION INTENSITYEMISSION REDUCTIONEMISSION REDUCTION PURCHASE AGREEMENTEMISSION REDUCTION UNITSEMISSION REDUCTIONSEMISSION REPORTINGEMISSION RIGHTSEMISSION TRAJECTORIESEMISSION-REDUCTIONEMISSIONSEMISSIONS CAPSEMISSIONS FROM ENERGY PRODUCTIONEMISSIONS FROM LAND USEEMISSIONS REDUCTIONSEMISSIONS STANDARDSEMISSIONS TARGETSENERGY DEMANDENERGY EFFICIENCYENERGY EFFICIENCY MEASURESENERGY EFFICIENCY STANDARDSENERGY SECURITYENVIRONMENTALENVIRONMENTAL BENEFITSENVIRONMENTAL INTEGRITYENVIRONMENTAL QUALITYEROSION CONTROLESTIMATES OF CARBONEXCESS EMISSIONSEXCHANGE RATEFINANCIAL BARRIERSFINANCIAL CONSTRAINTSFINANCIAL FLOWSFINANCIAL INNOVATIONFINANCIAL INSTITUTIONSFINANCIAL INSTRUMENTSFINANCIAL PRODUCTSFINANCIAL RESOURCESFINANCIAL SECTORFORESTFOREST CARBONFOREST CONSERVATIONFORESTRYFORESTRY ACTIVITIESFORESTRY CARBONFORESTRY PROJECTSFOSSIL FUELFRAMEWORK CONVENTION ON CLIMATE CHANGEFUEL SWITCHFUEL SWITCHINGFUELSFUGITIVE EMISSIONSGENERATION CAPACITYGHGGLOBAL CARBON MARKETGLOBAL EMISSIONSGLOBAL ENVIRONMENT FACILITYGLOBAL WARMINGGOLDGREENHOUSEGREENHOUSE GASGREENHOUSE GASESHFCSHIGH UNEMPLOYMENTINCOMEINDUSTRIAL GASESINTERNATIONAL CREDITSINTERNATIONAL EMISSIONSINTERNATIONAL FINANCEINTERNATIONAL OFFSETSINTERNATIONAL TRADINGINVESTMENT DECISIONSIRONLAND MANAGEMENTLAND USELAND USE CHANGELAND-USE CHANGELANDFILLLANDFILL GASLIVING CONDITIONSLOW-CARBONLOWER PRICEMARGINAL ABATEMENTMARGINAL ABATEMENT COSTMARGINAL ABATEMENT COSTSMARKET INSTRUMENTSMARKET MECHANISMSMARKET PENETRATIONMETHANEMITIGATION ACTIONSN2ONATURAL CAPITALNATURAL RESOURCESOFFSET PRICEOILPFCSPORTFOLIOPOWER GENERATIONPOWER SECTORPRESENT VALUEPRICE FLOORPRICE SIGNALPRICE VOLATILITYPURCHASE AGREEMENTSQUANTITATIVE ANALYSISREDUCING EMISSIONSREGIONAL GREENHOUSE GAS INITIATIVERENEWABLE ENERGYRENEWABLE ENERGY SOURCESRESILIENCE TO CLIMATE CHANGERICE HUSKSCENARIOSSF6SMOKESOIL CARBONSTRATEGIC RESERVESTREAMSSUSTAINABLE DEVELOPMENTTEMPERATURETIMBERTRADE SYSTEMTRANSACTION COSTSTRANSACTIONS COSTSUNCERTAINTIESUNEPUSE OF OFFSETSVERIFICATION OF EMISSION REDUCTIONSVERIFICATION PROCEDURESVOLUNTARY BASISWASTE MANAGEMENTWATER POLLUTIONWINDWIND POWERWorking PaperWorld Bank10.1596/27093