OECD/IEA Climate Change Expert Group Papers

This series is designed to make available to a wider readership selected papers on climate change issues that have been prepared for the OECD/IEA Climate Change Expert Group (CCXG). The CCXG (formerly called the Annex I Expert Group) is a group of government delegates from OECD and other industrialised countries. The aim of the group is to promote dialogue and enhance understanding on technical issues in the international climate change negotiations. CCXG papers are developed in consultation with experts from a wide range of developed and developing countries, including those participating in CCXG Global Forums.

The full papers are generally available only in English.

The opinions expressed in these papers are the sole responsibility of the author(s) and do not necessarily reflect the views of the OECD, the IEA or their member countries, or the endorsement of any approach described therein.


Making Markets: Unpacking Design and Governance of Carbon Market Mechanisms

Carbon market mechanisms such as emissions trading systems and crediting mechanisms can have multiple objectives. A key goal is to lower the cost of achieving greenhouse gas (GHG) emissions reductions. Market mechanisms can also catalyse investment in low carbon technologies and practices, provide local environmental and health benefits, contribute to fostering innovation, provide a source of government revenue and facilitate more ambitious mitigation action in future. They can therefore play an important role in the diverse policy toolkit needed to address the global issue of climate change. This paper identifies the key design elements of market mechanisms and examines the governance structures and decision-making processes used to create tradable GHG units in existing systems both inside and outside of the UNFCCC. The analysis explores the potential involvement of international, national and sub-national regulatory bodies in the governance and decision-making processes and the possible role that internationally-agreed standards could play in providing confidence in the quality of GHG units.


Keywords: new market mechanism, carbon market, mitigation, climate change
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error