International and European action on international carbon credits

Abstract

The regulatory landscape related to carbon credits is dynamically evolving. Even though the global market for carbon credits remains relatively limited compared to the ones created by emission trading systems, it can still play an important and complementary role in fostering positive climate actions through economic incentives. A variety of recent policy developments aim at strengthening good governance and environmental integrity of carbon credits. Policy efforts take place at different governance levels, given the variety of actors involved in the value chain of the international market for credits: from the UNFCCC, to individual states and regional groupings, including the European Union, to Voluntary Carbon Markets’ stakeholders. This policy brief sheds light on the intricate international and European regulatory infrastructure that is being forged to support the trade of carbon credits and the claims associated to their use and outlines ways forward to enhance the soundness of the policy framework.