Innovative New Market Mechanisms from Project to Mitigation Activities in the Urban Context: A New Paradigm

Abstract

Market mechanisms are important instruments to achieve cost-effective mitigation and help to finance more green infrastructure projects, and thus a key topic of international negotiations on a new international agreement under the United Nations Framework Convention on Climate Change (UNFCCC). City-wide urban approaches to market mechanisms hold much promise and other interesting opportunities. This chapter explores how existing CDM mechanisms can be reformed to assure transparency and environmental integrity market mechanisms for mitigation activities in the urban context. Following the introduction (Sect. 7.1), the second section of the chapter describes a framework for developing urban carbon markets in terms of procedure, methods and techniques, and tools. To make the second section vivid, the third section addresses an urban model of market mechanism in terms of (1) locally governed mechanism, (2) spatial dimension of the carbon market, (3) scoping and integration of sectors, and (4) baseline, additionality, and monitoring/verification. A new post-2020 can be an expansion of the CDM toward aggregated level mechanisms to build on a market mechanism for mitigation, through the strengthening of programmatic approaches. Different levels of mechanisms for scaling up of mitigation can be achieved by appropriate additionality and baseline determination procedures. The fourth section covers a holistic step-by-step guide for setting baseline, additionality determination, and aggregation procedures. Big data and blockchain technology can best complement other instruments which allow for robust additionality and baseline setting. The fifth section deals with a testbed approach under the urban carbon market mechanism.