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Regulated (CDM) and voluntary carbon offset schemes as carbon offset markets: competition or complementarity?

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  • Simon Bisore
  • Walter Hecq

Abstract

As one of the offsetting instruments, the Clean Development Mechanism (CDM) allows industrialized countries to meet their compliance objectives by undertaking and financing project activities in developing countries with certified emissions reductions (CERs) in return. Next to Kyoto mechanisms, voluntary offset markets for GHG emissions reductions that are not compliant with the Kyoto Protocol are developing quickly. Emissions offsets in this latter category are verified by official or independent agents but are not certified by regulatory authorities for use as a compliance instrument, and are commonly referred to as verified emissions reductions (VERs) which are not a standardized commodity. This paper compares the two types of projects-based carbon offset markets and analyses the question of complementarity or competition between them in their contribution to the mitigation of global warming as well as to sustainable development in the host countries.

Suggested Citation

  • Simon Bisore & Walter Hecq, 2012. "Regulated (CDM) and voluntary carbon offset schemes as carbon offset markets: competition or complementarity?," Working Papers CEB 12-016, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:sol:wpaper:2013/115381
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    References listed on IDEAS

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    Keywords

    Climate change; CDM carbon offset market; Voluntary carbon offset; Competition; Complementarity; Standards; Carbon credits; Sustainable development;
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