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Regulating Removals: Bundling to Achieve Fungibility in GGR Removal Units journal article

Justin Macinante, Navraj Singh Ghaleigh

Carbon & Climate Law Review, Volume 16 (2022), Issue 1, Page 3 - 17

Reduction in the levels of anthropogenic greenhouse gas (GHG) emissions, while essential, alone will not be sufficient to avoid continuing, damaging climate change impacts. Once the remaining global carbon emissions budget for limiting temperature increase to 1.5°C above pre-industrial levels is exhausted, more GHGs will need to be removed from the atmosphere than are emitted if this target is still to be achieved. Predictions indicate the remaining carbon budget for this target could be exhausted in the next decade. In these circumstances, it is apparent that GHG removal (GGR) technology needs to be scaled up significantly, and development of a market for removal units from GGR projects is one way to do so. As with carbon markets to date, there will be issues to be addressed, not least of which concern the legal and financial nature of the removal units and how removal units generated by different technologies might be fungible. This paper explores these issues, arriving at conclusions that removal units need to be characterised as constituting property and be defined as a financial instrument for the purposes of financial regulation. Heterogeneity of technical characteristics demonstrated by the different GGR methods, which would translate to the units, make determination of parameters by which they might be considered fungible, more problematic. Ultimately, given the public policy issues raised by any GGR market, these will be questions for policymakers. All the same, to help ameliorate difficulties confronting policymakers attempting to frame a GGR market, this paper proposes an alternative of considering the various GGR methods on a pooled or ‘bundled’ basis, rather than individually. This approach imports a number of advantages that enhance the potential for positive public policy outcomes in scaling up the GGR sector.


Climate Impact Measurement In Climate Finance and Carbon Markets journal article

Justin Macinante

Carbon & Climate Law Review, Volume 14 (2020), Issue 3, Page 199 - 209

Skepticism over aspects of the carbon markets has the potential to infect perceptions of initiatives seeking to engage the private sector in the gargantuan task of financing the transition to a low-carbon global economy. Climate finance, working in tandem with climate markets, is at the core of the Paris Agreement and the financial flows required to give adequate effect to its implementation cannot happen without the commitment of private finance and the private sector being fully engaged. For this to occur, there must be confidence in the design, operation, and governance of markets; and in relation to mitigation, in the validity and environmental integrity of measurable outcomes. The field of climate data analysis is developing to service the demands of the financial sector, driven in part by anticipated regulatory and disclosure requirements. Yet an examination of the current analytical approaches points to an emphasis on the consequences for corporations, investments, assets, and infrastructure from climate-related risk, as opposed to the consequences for the climate of corporate activities, investments, asset or infrastructure development. While both approaches are legitimate subjects for analysis, the paper argues that this risk bifurcation can and should be addressed to ensure the raison d’être of climate finance and climate markets – transition to a low-carbon economy and the mitigation objectives of global climate policy – is given due weight, through the development of accurate, reliable, comparable metrics that provide clear yardsticks on how climate finance investments are contributing to progress towards the goals of the Paris Agreement.

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