Abstract:Parties to the United Nations Framework Convention on Climate Change (UNFCCC) have decided to establish a "new market-based mechanism" (NMM) to promote mitigation across "broad segments" of developing countries' economies but have so far defined only some broad outlines of how it is to function. This article identifies key design options of the NMM based on a survey of the literature and reviews them against a range of assessment criteria. Furthermore, potential application of the NMM is analysed for five country-sector combinations. The analysis finds that lack of data and of institutions that could manage the NMM are key bottlenecks. In addition, the analysis reveals the existence of substantial no-regret reduction potential, suggesting that sectors may not be sensitive to the market incentives from an NMM. Governmental capacity building and nationally appropriate mitigation actions (NAMAs) might be more appropriate on the short term, preparing the ground for the adoption of market-based approaches at a later stage. NMM pilots could be based on supported NAMAs but should ideally generate tradable and compliance-grade emission credits in order to fully simulate the real-life conditions of an NMM. Policy Relevance:The Doha conference identified "possible elements" of the NMM to be addressed in the development of the NMM's modalities and procedures. This article identifies available options for these possible elements and reviews these options against a number of criteria, including environmental effectiveness, economic efficiency, political and administrative efficiency, and others. On this basis the article identifies options that are best suited to fulfil the main aims of the NMM as decided at the Durban conference, "to enhance the cost-effectiveness of, and to promote, mitigation actions". In addition, the article analysis potential application of the NMM for five country-sector combinations. The analysis assesses the emission reduction potential that could be mobilised through the NMM as well as the institutional market readiness of the sectors. Finally, the article synthesises the challenges ahead for the NMM that have emerged from the analysis and suggests possible ways forward.
Healthy and resilient ecosystems underpin our societies and economies. Collapse of just a few ecosystem services such pollination, timber from forests and food from marine fisheries, could result in a global GDP decline of USD 2.7 trillion annually by 2030. We are not investing sufficiently in nature, resulting in an estimated nature funding gap as high as US$800 billion per year. Redirecting financial flows towards nature-positive investments and activities is critical. Multilateral Development Banks (MDBs) play an instrumental role to support a nature-positive future, aligned with the forthcoming post-2020 Global Biodiversity Framework, the G7 Climate, Energy and Environment Ministers Communiqué of May 27th, 2022, and with the Joint Statement on Nature, People, and Planet endorsed by the 10 MDBs at COP27. This Statement included an intention to work towards a joint understanding of the term 'nature positive' in the context of operations and investments and a goal to develop tools and methodologies for tracking 'nature positive' investments across MDB portfolios. This technical note is a first step towards meeting this commitment. This work presents options for defining nature-positive finance, based on definitions and principles identified in a bibliographical review drawing on global expertise and developing frameworks and taxonomies. Acknowledging the variety of institutional and ecological contexts in which MDBs operate, the report offers a menu of options to screen nature-positive activities as well as a variety of approaches to determine the nature-positive contribution to investments. Finally, the report proposes principles for tracking and reporting on these investments.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.