The Paris Agreement aims to strengthen the global response to the threat of climate change by substantially reducing global greenhouse gas (GHG) emissions. Its objective is to keep the increase in global temperature well below 2°C above pre-industrial levels while also striving to limit it to 1.5°C above pre-industrial levels.

It further seeks to increase countries’ ability to adapt to the impacts of climate change and to make finance flows consistent with a low GHG emissions and climate resilient pathway. To achieve these objectives, all Parties must commit their best efforts through Nationally Determined Contributions (NDCs) strengthen these ambitions over time and report regularly on their emissions and implementation efforts. High-integrity carbon markets can play a key role in achieving these objectives in a cost-effective manner.

It can incentivise both public and private actors to raise their climate mitigation ambition at a reasonable cost, accelerate climate action, and support global decarbonisation efforts. This toolkit offers countries a practical pathway to develop or strengthen their legal and regulatory frameworks for high-integrity carbon credit transactions, particularly under Articles 6.2 and 6.4 of the Paris Agreement.

It sets out the core elements of sound governance architecture; rigorous procedures for validation, issuance, monitoring, verification, and registration; additional considerations for sector specific mitigation activities such as nature-based solutions (NBS); and guidance on the government’s role in structuring carbon credit transactions.

Report by the World Bank