(NEW YORK – September 27, 2024) – A group of economists and other experts from the Environmental Defense Fund (EDF) and Wildlife Conservation Society (WCS) today released a joint guide called “A Ministry Playbook for Corresponding Adjustment – Pricing strategies in carbon markets” outlining an initial set of key considerations to give confidence to national governments when evaluating complex tradeoffs between selling carbon credits in the Voluntary Carbon Market (VCM) or authorizing Corresponding Adjustments (CA) credits in compliance mechanisms. The guide aims to help countries with pricing strategies to maximize financial resources from the sale of carbon credits to reach their own economic development and climate goals while upholding the integrity of the Paris Agreement.
Background:
- Nationally Determined Contributions (NDCs) are the building blocks of global climate action, and carbon markets can be a critical source of finance for achieving the goals of the Paris Agreement.
- Corresponding Adjustments (CA) credits can play a pivotal role in jurisdictions’ engagement with carbon markets, but governments must navigate complex decisions about issuing carbon credits and authorizing CAs.
- Unlike VCM credits, CA credits cannot be counted towards a host country’s climate commitments since they are transferred to the buyer’s climate account. This means that when choosing to sell CA credits, a host country must find additional measures to offset the loss of carbon mitigation, which can increase the cost and complexity of achieving its climate targets.
- This tool enables countries, in the context of their own national circumstances, to establish price points for determining optimal choices for selling credits in global carbon markets while keeping on track to meet their climate commitments.
Dr. David McLaughlin, Senior Economist at EDF, co-author of the guide said, “As carbon markets mature, countries selling carbon credits have to navigate complex and far-reaching decisions both for pricing and the types of credits sold within the context of their own national circumstances. The methodologies we are proposing provide a roadmap for navigating this challenge and will help unlock finance where it is needed to reach our climate goals.”
Dr. Sarah M Walker, Director of Natural Climate Solutions, Wildlife Conservation Society said, “While carbon markets continue to evolve, they are expected to be a critical source of finance for a large majority of countries. We are excited that this guide provides a tool that enables countries to negotiate the price points they will need to meet climate commitments and foster sustainable development, providing another contribution to the solutions toolkit to support countries engagement in carbon markets.”
Find the full guide here.
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Environmental Defense Fund
One of the world’s leading international nonprofit organizations, Environmental Defense Fund (edf.org) creates transformational solutions to the most serious environmental problems. To do so, EDF links science, economics, law, and innovative private-sector partnerships. With more than 2.5 million members and offices in the United States, China, Mexico, Indonesia, and the European Union, EDF’s scientists, economists, attorneys, and policy experts are working in 28 countries to turn our solutions into action. Connect with us on X@EnvDefenseFund
Wildlife Conservation Society (WCS)
WCS combines the power of its zoos and an aquarium in New York City and a Global Conservation Program in more than 50 countries to achieve its mission to save wildlife and wild places. WCS runs the world’s largest conservation field program, protecting more than 50 percent of Earth’s known biodiversity; in partnership with governments, Indigenous People, Local Communities, and the private sector. Its four zoos and aquariums (the Bronx Zoo, Central Park Zoo, Queens Zoo, Prospect Park Zoo, and the New York Aquarium ) welcome more than 3.5 million visitors each year, inspiring generations to care for nature. Visit: newsroom.wcs.org. Follow: @WCSNewsroom. For more information: +1 (347) 840-1242. Listen to the WCS Wild Audio podcast HERE.
