With the “Paris Agreement” reached at COP21 in Paris (December 2015), an enduring, legally binding treaty on climate action including emission reduction commitments starting in 2020 is now in place, under which market mechanisms may once again be a possible tool to reaching emissions targets.

Language included in the Paris Agreement allows for a new market mechanism under which Internationally Transferred Mitigation Outcomes (ITMOs) may be traded by both developed and developing countries, combining elements of the Clean Development Mechanism and the Joint Implementation mechanism used under the Kyoto Protocol. The ITMO scheme will replace previous schemes from 2020, but could be traded as soon as the rules are drafted and confirmed.  

The Paris Agreement marked a turning point in building a low carbon economy, and COP23 in November 2017 built further on this milestone with the Bonn-Fiji Commitment of Local and Regional Leaders, a pledge that signals their commitment to bring forward a critical shift in global development. 

Tradition Green continues to watch climate policy closely as new market mechanisms are developing. For more information on these or other international negotiations please get in touch.