Countries agreed in Paris to a legally binding treaty on climate change under United Nations Framework Convention on Climate Change (UNFCCC). The "Paris Agreement" comes into force on 4th November 2016, after having met necessary ratifications. The core mitigation component of the Paris agreement is Intended Nationally Determined Contributions (INDCs) that each willing Party agrees to make towards the agreed global goal of limiting global temperature rise definitely below 2 degrees C while making all the efforts to limit it below 1.5 degrees C. Various elements of Paris Agreement essentially include all the elements of future climate regime necessary for implementation of Intended Nationally Determined Contributions (INDCs), including capacity building, mitigation and adaptation framework, technology transfer, climate finance, intergovernmental cooperation, private sector engagement etc. The agreement will come into force post-2020. The role that market mechanisms will play is, to a large extent, dependent upon the nature and scope of the INDCs.
The agreement recognizes the importance of market-based and non-market approaches for the countries for implementation of their INDCs. Over and above of whatever met by domestic support (domestic market or non-market approaches), countries can use transfer of mitigation outcome through international carbon markets, for which modalities will be defined under international climate negotiations in coming years (2016-2020). In addition, Article 4 of Paris Agreement emphasizes that the actions to be developed for delivery of Paris Agreement need to take into account the special needs of the countries whose economies will be severely impacted due to response measures.
On 6th October 2016, Government, industry and civil society representatives on a new global market-based measure (GMBM) to control CO2 emissions from international aviation, during 39th Assembly of International Civil Aviation Organization (ICAO, the United Nations aviation agency) in Montreal, Canada, agreed to recommend adoption of a final Resolution text for the GMBM. ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is designed to complement the basket of mitigation measures the air transport community is already pursuing to reduce CO2 emissions from international aviation. These include technical and operational improvements and advances in the production and use of sustainable alternative fuels for aviation.
On 15th October 2016 nearly 200 countries struck a landmark deal (Kigali Amendment) in Kigali, Rwanda to reduce the emissions of powerful greenhouse gases, Hydrofluorocarbons (HFCs), in a move that could prevent up to 0.5 degrees Celsius of global warming by the end of this century. All the positive developments at international and regional climate stage require capacity, policies and tools to make change happen. There are several international compliance-based and voluntary project-based, multilateral and bilateral GHG reduction programs are operating, such as: Climate Action Reserve (CAR), Clean Development Mechanism (CDM), Gold Standard (GS), and Verified Carbon Standard (VCS), Japan Crediting Mechanism (JCM). There are several Emission Trading Schemes and Carbon Taxation schemes are implemented or under consideration. For example, European Union-Emission Trading Scheme (EU-ETS) is the oldest and pioneering scheme in the world that had largest impact till date. Many countries are implementing ETS and Carbon Tax program, such as China, Korea, South Africa, Mexico, Australia, California etc.
Global Carbon Council takes the responsibility to identify and implement workable market instruments in different regions and evolve over time as the market achieves maturity.