Global carbon markets have the potential to significantly reduce the costs of meeting parties’ current Nationally Determined Contributions (NDCs). If these cost savings are reinvested in mitigation action, higher ambition can be achieved. Carbon markets can also incentivize private sector investments and innovation, while delivering sustainable development benefits beyond mitigation. These benefits can free up resources for, and promote public acceptance of, transformative climate action.
However, this requires adequate capacities of public and private sector stakeholders to engage in robust carbon market instruments that promote environmental integrity and sustainable development. Upon adoption of the Article 6 rulebook at COP26, capacity building for these new instruments will become crucial for their successful and rapid implementation
This report reflects on the terms of lessons learned from the past, challenges and opportunities for carbon market participation, and recommendations identified as part of the Carbon Market Action Group of the COP26 Catalyst for Climate Action