What is the likely role of the carbon market in generating the necessary financial flows?
The international carbon market has proven to be an effective tool to leverage private sector investment in developing countries while enabling developed countries to achieve their emission-reduction targets more cost effectively. However, the current market mechanisms are based on pure offsetting – that is, for every ton of emissions reduced in developing counties, an extra ton can be emitted in developing countries. Thus, the mechanisms in their current form are not contributing to global mitigation efforts.
