Integrating carbon ratings into the Paris Agreement Crediting Mechanism
PACM will improve the quality of methodologies in the carbon market by introducing more stringent standards and robust methodologies. However, methodologies are like recipes; there is no single ‘correct’ way to follow them, and their implementation is highly context-specific. PACM risks repeating the design flaws of the CDM by employing only a top-down approach to controlling quality in carbon projects and not considering project-level performance risk.
This report follows on from the concepts set out in our report, 'A new blueprint: How governments can design carbon credit markets for impact at scale’, to demonstrate how carbon ratings can be integrated into PACM as a risk metric to control for quality at the project level.
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