The Paris agreement: the future relevance of UNFCCC backed carbon markets for Africa

Abstract

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.