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Multijurisdictional Approaches to Carbon Pricing: Integrating Design Elements for a Low Carbon Club

April 2016

During the COP21 deliberations in late 2015, a separate side event workshop was organized in Paris by the Stanley Foundation and Climate Strategies to advance discussion on policies and benefits of carbon pricing approaches. The workshop was the culmination of three previous discussions held during 2015 to examine technology innovation, networked carbon markets, and multijurisdictional cooperative approaches to carbon pricing, including those for developing countries.

During the December Paris workshop, participants discussed how to integrate complementary policies and shared benefits into multijurisdictional cooperative approaches to carbon pricing, and maintained a consensus that MCAs should deliver more ambition for meeting the long-term goal. Participants also concluded that further investigation is key to understanding how best to differentiate criteria for inclusion, shared benefits, and objectives without diluting the mission to drive ambition.

The previous 2015 discussions began in the spring with the second Global Climate Policy Conference, organized by the Stanley Foundation and Climate Strategies in New Delhi, India, and continued in two subsequent workshops. One was hosted by the Stanley Foundation, Climate Strategies, the International Centre for Trade and Sustainable Development, and the Institute for Sustainable Development and International Relations in July and focused on the definition and role of, and interest in developing, low carbon clubs. Another was held at the Stanley Foundation’s 56th Strategy for Peace Conference in October and focused on designing elements for a robust carbon pricing club.

The Paris Agreement makes space in the international formal climate change dialogue for cooperative approaches that can include sub- and non-state actors in addition to nationally pursued pathways for limiting global warming to well below 2C with an aim to limit global warming to 1.5C—the long-term goal. Therefore, these cooperative approaches can be multijurisdictional, bringing together actors with mutual or complementary interests. The result could be a club-like approach to designing carbon markets that are either linked or share benefits across members, such as finance and/or technology development and transfer.
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