Top-Down, Bottom-Up or In-Between: How Can a UNFCC Framework for Market-Based Approaches Ensure Environmental Integrity and Market Coherence?

36 Pages Posted: 25 Aug 2012 Last revised: 10 Jun 2020

See all articles by Joelle de Sepibus

Joelle de Sepibus

University of Bern - World Trade Institute

Wolfgang Sterk

affiliation not provided to SSRN

Andreas Tuerk

Joanneum Research

Date Written: July 1, 2012

Abstract

The Durban Climate Conference agreed on the creation of a new market-based mechanism under the United Nations Framework Convention on Climate Change (UNFCCC) and to consider the establishment of an overall framework for various mitigation approaches, including opportunities for using markets (“Framework”). This development is taking place against the background of increasing numbers of parties developing market mechanisms outside the UNFCCC. The creation of such a Framework is therefore of high political significance, as it should ensure on the one hand that new market-based mechanisms contribute to global climate change mitigation and to achievement of targets and on the other hand that different market-based approaches can be integrated in a global carbon market. As yet there is little clarity as to the roles and design of such a framework. This paper contributes to the debate by discussing and evaluating inter alia several design options, and explores how the various options could be implemented and how they interrelate. The paper concludes that a strong central oversight at the level of the UNFCCC is probably the only option that could reassure the vast majority of UNFCCC Parties that the environmental integrity of new market-based mechanisms is in fact ensured. This does, however, not exclude that some reasonable balance may be struck between centralisation and flexibility

Keywords: market-based mechanisms, climate change, carbon markets, mitigation, UNFCCC, negotiations, post-2012 climate regime

Suggested Citation

de Sepibus, Joelle and Sterk, Wolfgang and Tuerk, Andreas, Top-Down, Bottom-Up or In-Between: How Can a UNFCC Framework for Market-Based Approaches Ensure Environmental Integrity and Market Coherence? (July 1, 2012). NCCR Trade Regulation Working Paper No. 2012/31, Available at SSRN: https://ssrn.com/abstract=2135487 or http://dx.doi.org/10.2139/ssrn.2135487

Joelle De Sepibus (Contact Author)

University of Bern - World Trade Institute ( email )

Hallerstrasse 6/8
Berne, CH-3012
Switzerland

Wolfgang Sterk

affiliation not provided to SSRN

Andreas Tuerk

Joanneum Research ( email )

8010 Graz
Austria

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