Carbon Markets

Carbon pricing and market instruments can be used as tools to strengthen equity and promote welfare amongst local communities. However, their implementation can also come with significant challenges and risks.

"Local Communities and the Voluntary Carbon Market"

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Our Vision

Countries, communities, and companies each have significant opportunities when it comes to carbon markets, but the decision-making process is complex, due to different kinds of markets that can potentially play a role in private and government climate action. Still, these groups need a strategic approach to maximize welfare through the interactive implementation of the cooperative mechanisms within the Paris Agreement, carbon prices (taxes and ETS), and voluntary carbon markets.

CCAP offers a holistic vision by understanding markets and their uses beyond serving as single and homogeneous tools. We see this ecosystem as a set of instruments that can work in specific situations according to national capabilities, emission profiles, and the challenges that organizations face in a changing world. Understanding that diversity and functionality is the secret to successfully implementing a carbon market system and changing carbon-intensive behaviors, CCAP centers its action around the critical role communication plays amongst governments, the private sector, and local communities, focusing on co-benefits in markets as a pillar for climate action.

Maximizing Social Welfare

CCAP contributes to the creation of local carbon markets knowledge and governance through:

Studying the state of the local communities regarding the carbon markets in Latin America and the Caribbean by recognizing and understanding the challenges, risks, needs, and opportunities for the ambitious and transparent implementation of Article 6 of the Paris Agreement and other carbon markets, ensuring the protection of social and environmental safeguards.
Examining the state of play regarding the agreements between intermediaries and local communities, assessing communities’ experiences, understanding, perspectives and needs for carbon markets, and evaluating the level of transparency and mechanisms that could affect or promote community governance.
Creating capacity-building workshops and governance-strengthening models for carbon markets.
Providing recommendations to decision-makers to promote best practices for projects with an emphasis on environmental and social safeguards, including recommendations for governments, international certification programs, and frameworks to improve markets. CCAP advises decision makers on social components regarding environmental integrity and nature base solutions, maximizing community welfare.

Our Mission

CCAP works with stakeholders in the United States and around the world to understand the pros and cons of different market-based approaches and design effective solutions tailored to the target pollutant(s) and policy context.

Specific area of work with market-based instruments includes:

Providing input into the United Nations Framework Convention on Climate Change (UNFCCC) negotiations

Producing analytical products that identify priority issues and consider the role of ITMOs in meeting countries Nationally Determined Contributions (NDCs)

Convening stakeholders to socialize best practices in the design of instruments that involve transfers of mitigation outcomes.

Supporting partner institutions in efforts to design effective, Paris-compliant ITMO strategies to help achieve their goals.

Article 6 Advocacy

Activities involving removals under the Article 6.4 Mechanism of the Paris Agreement

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Requirements for development and the assessment of mechanism methodologies

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Track Record

Ongoing Projects:

Analyzing Deforestation Trends in Colombian REDD+ Projects

The Foundation for Conservation and Sustainable Development (FCDS) and the Center for Clean Air Policy (CCAP) analyzed the behavior of deforestation in areas where REDD+ projects funded by the voluntary carbon market have been implemented, yielding several recommendations to improve their effectiveness.

The analysis showed that deforestation rates are lower in REDD+ project areas. However, it showed that the effect of collective titling and territorial governance processes (indigenous reserves and Afro-Colombian community councils) is greater than the project effect.

CCAP and WWF Colombia Launch Fair and Equitable REDD+ Agreements Project

CCAP and WWF Colombia officially launched the ‘Fair and Equitable REDD+ Agreements’ project during an event held in Bogotá, Colombia.

The project will work to ensure that voluntary carbon market agreements guarantee rights, not only from the perspective of indigenous peoples and local communities, but it will also develop recommendations based on experiences, which will be directed to other key actors, such as the government, so that best practices can be developed within these types of projects.

This project focuses on strengthening the understanding, to promote the environmental and social integrity of the territories where carbon market agreements are exercised.

Our Work with ITMOs

CCAP has helped advance international thinking on ITMOs through a series of submissions papers and policy briefs, including the following:

CCAP’s most recent ideas illustrating three alternative types of ITMO designs, including tradeoffs between design flexibility, the fundability of the instrument, and the needed level of international oversight. This piece also identifies additional strategies to ensure that ITMOs generated from outside the NDC will support environmental integrity and higher ambition.

CCAP’s widely-read brief, Using Transfers to Enhance Ambition over the NDC Cycles, offers a general approach by which internationally transferred mitigation outcomes can contribute to strengthening ambition through the NDC cycles to meet the goals elaborated in long-term climate strategies. This work particularly focuses on mitigation outcomes that would be transferred from sectors that are not yet part of a developing country’s NDC.