Strategies for transition: CDM, New Market Mechanisms and emissions trade

In conjunction with Perspectives, adelphi is furthering the development of the international carbon market. The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) commissioned the project “Draft for a step-by-step transition from CDM to New Market Mechanisms (NMM), an emissions trading system and related capacity building”.

In this context, the project partners are working on recommendations for the further development of NMM, including how these new mechanisms can be aligned with other instruments at the international level. Additionally, strategies will be developed for the transition from CDM to NMM in selected developing countries and emerging economies. In order to meet the 2°C target agreed upon in the framework of the international climate negotiations, a stronger involvement of developing countries and emerging economies in global efforts to reduce greenhouse gas emissions is necessary. It is thereby clear that effective policies and measures are needed to support these countries in the move beyond the Clean Development Mechanisms (CDM). To this end, adelphi and Perspectives will outline possible options for the successful transition towards a global carbon market based on country-specific case studies. Although the CDM selectively reduced GHG emissions as a project-based mechanism, this instrument alone cannot achieve the structural transformation for a low carbon economy. The development of further climate policy instruments such as sectoral CDM (sCDM), New Market Mechanisms (NMM) and Nationally Appropriate Mitigation Actions (NAMAs) can systematically support this transition.

Following conceptual analysis of the potential transition to new market instruments at the international level, any potential interactions will also be investigated.