Carbon Markets Under the Kyoto Protocol : Lessons Learned for Building an International Carbon Market Under the Paris Agreement
This working paper commissioned by the World Bank Carbon Markets and Innovation Practice (GCCMI) critically examines experience with carbon markets under the Kyoto protocol. The de facto end of the Kyoto Protocol and heralding of the Paris Agreemen...
| Main Author: | |
|---|---|
| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/650081545377054720/Carbon-Markets-Under-the-Kyoto-Protocol-Lessons-Learned-for-Building-an-International-Carbon-Market-Under-the-Paris-Agreement http://hdl.handle.net/10986/31210 |
| Summary: | This working paper commissioned by the
World Bank Carbon Markets and Innovation Practice (GCCMI)
critically examines experience with carbon markets under the
Kyoto protocol. The de facto end of the Kyoto Protocol and
heralding of the Paris Agreement era has created the space
for critical evaluation of trading carbon assets. The Kyoto
Protocol and Paris Agreement diverge markedly in scope,
centralization, and logic. As a result, the Article 6 carbon
market mechanisms that emerge under Paris are likely to be
very different to those that emerged under Kyoto.
Nonetheless, experience with carbon markets under the Kyoto
Protocol remains informative. This paper argues that there
is still an economic and political rationale for trading
carbon assets across borders. Trade in carbon assets can
help reduce the costs of mitigation and facilitate emissions
abatement at least-cost locations. When designed well,
carbon market mechanisms can also facilitate learning,
mobilize the private sector, and encourage transparency of
mitigation efforts. Crucially, carbon markets could help
support the operating logic of the Paris Agreement by
binding signatories together and enhancing collective
ambition. However, done badly, linking emissions systems
could entail some risks to environmental integrity. In
addition, given continued delays to the clarification of
Article 6 and the need for strong action now, countries
should not wait to implement effective domestic mitigation
instruments such as carbon. |
|---|