Market Initiatives

The latest IPCC report highlights the urgency to fully decarbonise our global economy. Carbon markets can help accelerate and finance the transition to net-zero emissions by enabling businesses and individuals to take accountability for their unavoidable emissions through the purchase of carbon credits.

This helps close the emissions gap towards the temperature goals under the Paris Agreement, the finance gap where urgently needed climate action is not yet funded, and the time gap that favours action today over waiting for sufficient policy measures from governments.

Driving finance to high impact climate protection activities
However much we try to reduce our footprint, in our current world some emissions are still unavoidable. Financing emission reductions by purchasing high impact carbon credits is a way to take responsibility for your climate impact and to take action beyond your own footprint.

The Paris Agreement marks a major step-change from previous international efforts to address climate change. All countries now have national targets in the form of Nationally Determined Contributions (NDCs), which will become increasingly ambitious and broad in scope over time with a view to achieving a global balance of anthropogenic emissions sinks and sources in the second half of this century.

Article 6 of the Paris Agreement enables countries to voluntarily cooperate with each other to achieve emission reduction targets set out in their NDCs.

• Article 6.2 of the Paris Agreement creates the basis for trading in GHG emission reductions (i.e., mitigation outcomes) across countries cooperate by means, including, but not limited to, baseline-and-crediting arrangements and emissions trading schemes.
• Article 6.4 establishes a centralised crediting mechanism akin to the Clean Development Mechanism that has existed under the Kyoto Protocol.
• Article 6.8 recognises non-market approaches to promote mitigation and adaptation, such as through finance, capacity building and technology transfer.

To ensure continued integrity, eligibility across different markets internationally, and to mitigate any risk of inadvertently undermining international efforts to address climate change, alignment to Article 6 is essential. To support this alignment and the operationalisation of Article 6, Gold Standard has introduced a number of initiatives as well as published several thought leadership articles.

With aviation emissions from international flights falling outside of the scope of nationally determined climate action, the member states of the International Civil Aviation Organisation (ICAO) in October 2016 made the decision to adopt a global market-based mechanism for aviation emissions, termed the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). 

CORSIA, one of a basket of measures adopted by ICAO is a global market-based scheme, whereby airlines and aircraft operators can compensate increases in CO2 through the use of carbon credits.

The implementation of CORSA has been divided into three phrases. The pilot phase (2021-2023) and first phase (2024-2026) are both voluntary, with the final mandatory phase being launched from 2027. 

Currently CORSIA only applies to international flights between states that have volunteered to participate. From 2027, all international flights will be included, with exceptions for: 

• Least development countries, small island developing states and landlocked developing states (as defined by the UN) 
• States that have a very small share of international traffic

Gold Standard certified projects are eligible to supply CORSIA Eligible Emissions Units for the pilot phase (2021-2023 compliance period) and first phase (2024-26 compliance period) according to the eligibility parameters set out in the ICAO document “CORSIA Eligible Emissions Units”. 

CORSIA eligible Gold Standard-certified credits are labelled in the Gold Standard Impact Registry, and can be searched for using the filter function.

At least 42% of electricity must be supplied by renewable sources by 2030 to reach net zero emissions by midcentury -- the ambition of the Paris Agreement -- which requires doubling renewable power capacity. The private sector is key to this transition, yet some companies are limited in their ability to source renewable energy directly. Renewable energy markets allow these companies to purchase clean energy from their grid.

By purchasing clean energy -- whether directly or through renewable energy markets -- companies demonstrate a commitment to being more environmentally friendly, something clients, consumers + civil society are increasingly demanding.