Example of using a BAU baseline and restricting GHG reduction transfers

Article 6 of the Paris Agreement allows for the creation of market mechanisms to internationally transfer mitigation outcomes. That could potentially include scaled-up approaches that credit aggregate mitigation outcomes achieved across large numbers of sources.

This technical note – one of a planned series from the Partnership for Market Readiness (PMR) – focuses on how to develop baselines consistent with rules that may arise for international crediting.

In principle, the baseline for a crediting program should represent the greenhouse gas emissions that would occur in the program’s absence. It would thus establish a reference level of emissions, used to quantify the GHG reductions the program generates over time. But questions remain on how best to develop those baselines, including whether and how they should reflect Nationally Determined Contributions.

This note outlines core principles – such as environmental integrity and the avoidance of double counting – that are likely to inform rules for new crediting mechanisms under the Paris Agreement. It also presents some options on how to establish basements in light of those principles.