A fresh start for international climate policy:
The Paris Agreement removes policy uncertainty and ensures that carbon market mechanisms will continue to be an important part of the multilateral climate regime after 2020. These mechanisms will evolve along two lines: one with strong international oversight (SDM) and one with a more bilateral character (cooperative approaches, CAs). Africa would benefit if the SDM becomes quickly operationalized, building on the modalities and procedures of the CDM and taking into consideration important reform elements and lessons learned for Africa. In this context, it is crucial that existing CDM projects will be permitted to be transferred to the new SDM. Africa should
also demand that the CAs are subject to stringent international rules in order to prevent a race to the bottom and subsequent crowding out of the SDM. Finally, the adaptation levy should also be placed on internationally transferred
mitigation outcomes (ITMOs) rather than burdening only the SDM.
Not words only but action:
High ambition coalition members and industrialized countries supporting market mechanisms in Paris need to generate demand for CERs and ITMOs well before 2020. This should entail provisions that would provide investment certainty to African projects with high sustainable development co-benefits.
Continued CDM reform:
PoA rules are becoming more and more manageable for African entities. Linkages of CDM to climate finance institutions including the GCF are envisaged but require constant pushing by developing
Create post-2020 public CER demand and investment certainty:
African negotiators should push industrialized countries to quantify demand for credits when converting their Intended Nationally Determined Contributions (INDCs) into NDCs at the signature of the Paris Agreement.
• The SDM should primarily work as a market mechanism, but also serve as a tool for results-based mitigation finance:
In the latter case units should voluntarily be cancelled.
Authors: by Axel Michaelowa, Sandra Greiner, Stephan Hoch, Fabrice Le Saché, Dario Brescia, Hilda Galt, Sebastian Mayr, El Hadji Mbaye Diagne (2016)