B20 Indonesia Legacy Program: Carbon Centre of Excellence
gives the knowhow and insights to navigate the carbon markets. It is a collaboration between the Indonesian Chamber of Commerce and Industry (KADIN) and BloombergNEF, and part of the Carbon Centre of Excellence – one of Indonesia’s B20 Legacy Programs.
Photo by Aron Visuals on Unsplash
Take carbon markets 101 and learn the fundamentals behind carbon-pricing systems.
Carbon pricing can be an effective policy tool to make polluters pay for their greenhouse-gas emissions. Out of the 60 or so programs around the world, the most common are taxes and emission-trading programs. Broadly speaking, the former guarantees the carbon price and the latter delivers a guaranteed reduction in emissions.
Carbon permits may be traded as part of a mandatory program, with most transactions occurring on an exchange. Carbon offsets may also be traded by participants in some compliance programs as well as companies, governments and individuals with sustainability targets. Most trades are via broker.
Compliance carbon markets typically involve governments, companies required to participate, and the finance and trading community. Voluntary carbon markets have a more complex value chain involving project developers, registries, brokers and corporations looking to meet their sustainability targets.
The carbon market mechanisms to be implemented under Article 6 of the Paris climate deal will enable governments and companies to collaborate to achieve their climate targets. There is growing interest in these new systems but some finer details need to be agreed.
A volume-based cap should deliver a certain emissions reduction, while a cap based on intensity may allow more flexibility but could mean emissions rise. Governments often begin by offering a significant share of permits for free and later switch to auctions.
Partners to the Carbon Centre of Excellence support the development of carbon markets worldwide, as a mechanism to drive decarbonization.
The Carbon Centre of Excellence is a collaboration between BloombergNEF and the Indonesia Chamber of Commerce and Industry (KADIN) on behalf of the B20 Indonesia.Get involved
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