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Advances in Climate Change Research 10 (2019) 21e29
www.keaipublishing.com/en/journals/accr/
International carbon markets under the Paris Agreement: Basic form and
development prospects
GAO Shuai a, LI Meng-Yu b, DUAN Mao-Sheng b, WANG Can a,*
a
State Key Joint Laboratory of Environment Simulation and Pollution Control (SKLESPC), and School of Environment, Tsinghua University, Beijing, 100084,
China
b
Institute of Energy, Environment and Economy, Tsinghua University, Beijing, 100084, China
Received 24 January 2019; revised 12 March 2019; accepted 19 March 2019
Available online 23 March 2019
Abstract
Article 6 of the Paris Agreement introduces two international carbon markets that receive extensive attention and are expected to play an
important role in the post-2020 climate regime. Three key elements of the two international carbon markets, including the scope, the types of
tradable units and the governance, are identified, as the basis to clarify their basic forms. Based on the key issues and their different designs
identified in negotiations, this study analyzes the contributions and challenges for China to participate in international carbon markets.
Considering the inherent needs of climate change mitigation, climate finance, the development of a green “Belt and Road” and the China
SoutheSouth cooperation in climate change, along with the existing domestic capacities on market mechanisms, this study puts forward the
short-, medium- and long-term development prospects of the two international carbon markets.
Keywords: Paris Agreement; International carbon markets; Cooperative approaches; Sustainable development mechanism; Climate change
1. Introduction international carbon market is expected to play a crucial role
in post-2020 climate regime (Koakutsu et al., 2016).
Article 6 of the Paris Agreement established two interna- Currently, the Subsidiary Body for Scientific and Techno-
tional carbon markets through the cooperative approaches logical Advice (SBSTA) summarizes the views submitted by
(CAs) under Articles 6.2e6.3 and the sustainable development Parties in order to support the development of the guidance for
mechanism (SDM) under Articles 6.4e6.7 (UNFCCC, 2015). CAs and the rules, modalities and procedures for the SDM
These could be used by Parties to achieve their nationally (UNFCCC, 2018a, 2018b). Therefore, it is important for China
determined contributions (NDCs) and increase the ambition of to accurately grasp the development of international carbon
the mitigation targets in the future. On the one hand, roughly markets by identifying the key issues in negotiations and their
half of the Parties intend to use the international carbon market basic forms. Moreover, analyzing the contributions and chal-
in post-2020 (Chen et al., 2018). On the other hand, the Car- lenges for China to participate in the international carbon
bon Offset and Reduction Scheme for International Aviation markets and their development prospects can help maximize
aims to provide a large amount of demand for the international their roles in China. Therefore, in this work, we identify the
carbon market units (Cames et al., 2016). Therefore, the key elements of the international carbon markets to clarify
their basic forms based on the literature review. The key issues
in negotiations and their design options are identified through
* Corresponding author. informal documents of the SBSTA meetings. On this basis, we
E-mail address: canwang@tsinghua.edu.cn (WANG C.). analyze the contributions and challenges for China to take part
Peer review under responsibility of National Climate Center (China
Meteorological Administration).
in the international carbon markets. This study puts forward
https://doi.org/10.1016/j.accre.2019.03.001
1674-9278/Copyright © 2019, National Climate Center (China Meteorological Administration). Production and hosting by Elsevier B.V. on behalf of KeAi.
This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
