Supporting energy pricing reform and carbon pricing policies through crediting /

In the case of an emission trading system (ETS), a possible crediting approach is to purchase allowances from the market and therefore tighten the cap beyond the domestic policy reach—potentially pro rata to emission reductions achieved by the ETS in the past. [...] This option aims to enhance the performance of a pricing reform policy by reducing compliance costs of participants through MRV support, by intervention in the market (e.g., increasing liquidity) in the case of ETS, or by increasing the capacity of participants in general. [...] The challenges in both cases are to: (i) set a baseline for the counterfactual where the policy is not implemented/ is implemented without increased mitigation impact; and (ii) and then attribute any change to the increased mitigation impact as against other drivers of change (technological progress, changes in the economy, changes to prices and other economic variables, competitiveness with respe [...] China has benefitted from a partnership with the PMR on GHG mitigation; In Mexico the PMR supports an MRV Framework and NAMA tracking tool (PMR, 2013e); in Indonesia the PMR is supporting the piloting of an MRV framework (PMR, 2013d); in Morocco, the PMR is supporting pilot carbon market-based approaches in selected sectors as the national government has the goal to develop a domestic carbon marke [...] The “base policy” shows a “no- crediting situation.” The “base policy” typically results in financial flows to the government, some of which can be redistributed to sectors and stakeholders that are more or less affected by the impacts of that policy.