Climate Change Research ›› 2020, Vol. 16 ›› Issue (1): 117-125.doi: 10.12006/j.issn.1673-1719.2019.217

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Development of market mechanisms under the Paris Agreement: risks and countermeasures

Yu-Jie TAO,Meng-Yu LI,Mao-Sheng DUAN()   

  1. Institute of Energy, Environment and Economy, Tsinghua University, Beijing 100084, China
  • Received:2019-09-17 Revised:2019-10-21 Online:2020-01-30 Published:2020-01-15
  • Contact: Mao-Sheng DUAN


Article 6 of the Paris Agreement establishes two market-based mechanisms, i.e. cooperative approaches and sustainable development mechanism. Influenced by the diversity of NDC mitigation targets and the uncertainties of future mitigation efforts of Parties, carbon market established under the Paris Agreement are faced with enormous risks and challenges in the design and implementation, including risks in environmental integrity caused by un-robust accounting and inappropriate additionality assessment, as well as risks to discourage Parties from extending the scope of NDC and increasing their mitigation efforts. To address these risks, it is imperative to establish a robust accounting system, take into appropriate consideration NDC commitment in additionality assessment, and ensure that the market mechanisms will incentivize Parties to extend the scope of NDC through establishing participation requirements. China should identify the requirements and possible impacts of participating in the market mechanisms under the Paris Agreement, carry out relevant capacity building activities and establish stringent supervision system and organizations, considering the development status of domestic carbon market, so as to enable its effective participation in the carbon market under the Paris Agreement.

Key words: Paris Agreement, Market mechanism, Cooperative approaches, Sustainable development mechanism, Risks

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