Don't link carbon markets

Environmental integrity of international carbon market mechanisms under the Paris Agreement

“…For acquiring countries, using international carbon markets could lower the costs of achieving their targets, and thereby enable these countries to adopt more ambitious targets. Yet for transferring countries, the possibility to use international carbon markets could create incentives to set mitigation targets at unambitious levels, or to define their scope narrowly, in order to accrue more benefits from transferring units internationally (Carbone et al, 2009;Green, 2016;Helm, 2003;Holtsmark & Sommervoll, 2012;Howard, 2018;Spalding-Fecher, 2017;Warnecke et al, 2018).…”

California air resources board forest carbon protocol invalidates offsets

“…However, uncertainty in carbon product asset value 9 and market function can negatively affect carbon markets and their efficacy to manage climate change [10][11][12][13] . For example, global carbon compliance markets have declined from ~$95B€ in 2011 14 to $41B€ in 2017 15 , a decrease of ~57%, attributed to the absence of a price for carbon 16 , oversupply of offsets 17,18 , ambiguity of disparate trading platforms 19 , and as we argue here for forest carbon, absence of direct and verifiable measurement of CO 2 and related carbon storage products [20][21][22][23] . An unprecedented 3.4 ppm surge in atmospheric CO 2 in 2016 related to the 2015/2016 El Nino event 24,25 , and updated projections for warming by the Intergovernmental Panel on Climate Change (IPCC) 5 , call into question the efficacy of carbon markets (e.g.…”

How Do Verified Emissions Announcements Affect the Comoves between Trading Behaviors and Carbon Prices? Evidence from EU ETS

“…The impacts of "trading with compliance purpose" on the carbon prices are evaluated using the mean equations of the GARCH models. Based on the aggregated data, a review of the autocorrelation function (ACF) and partial autocorrelation function (PACF) of the logarithm returns of the carbon prices shows: (1) in Phase I, ACF tails off gradually, PACF cuts off after 1 lag; (2) in Phase II, both ACF and PACF tail off gradually. The finding indicates that the carbon price returns of Phase I show some degree of temporal correlation, while those of Phase II can almost be considered white noise.…”

“…The finding indicates that the carbon price returns of Phase I show some degree of temporal correlation, while those of Phase II can almost be considered white noise. Therefore, we propose different mean equations to model the logarithm returns of the carbon prices in Phase I and Phase II: (1) in Phase I, we add the volumes of "trading with compliance purpose" of the first-order lag for further explaining the temporal correlation observed in the residual of autoregressive (AR) (1); (2) in Phase II, we find that autoregressive and moving average (ARMA) (1, 1) is quite sufficient, as the residual is white noise. The mean equations of Phase I and Phase II are parameterized according to Equations (2) and (3), respectively:…”

“…Emissions trading schemes for CO 2 have been established across the globe in response to the commitment to an 8% reduction in greenhouse gases (GHG) in the Kyoto Protocol [1,2]: the European Union Emission Trading Scheme (EU ETS) in Europe [3], the Regional Greenhouse Gas Initiative in the United States [4], the New South Wales Greenhouse Gas Abatement Scheme in Australia [5], Pilot Carbon Trading Markets in selected provinces and cities in China [6][7][8], and the Korean Emissions Trading Scheme in the Republic of Korea [9]. Since new emissions trading schemes are continuously being designed and implemented, such as a national-scale carbon market of China that launched at the end of 2017 [10], it is highly desirable to investigate the operations of the extant ones for providing a better understanding of this important climate change mitigation strategy.…”