10th Strategic Dialogue of the Carbon Market Platform - Klaus Oppermann

Presentation from the 10th Strategic Dialogue of the Carbon Market Platform

1. SCALED-UP CREDITING
RATIONALE AND FIRST EXPERIENCES
Carbon Market Platform
10th Strategic Dialogue
Ottawa, Ontario, Canada
October 22-23, 2025
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2. Scaling up is about quantity and quality
Quantity is needed and possible,…
▪International carbon market potential (global least cost) estimated at 2.5-5Gt p.a. by 2030*;
▪CDM/JI average annual issuance KP1 (>97% project-by-project): 0.5 Gt (UNFCCC);
▪CDM issued for 3,600+ projects, reduced 2008-12 emissions in 7 of its host countries by 5%+**.
…Quality is key
▪Ensure environmental and social integrity (additionality, overcome leakage and share benefits);
▪Shifting development trajectories in a sustainable way vs punctual GHG abatement;
▪Support critical low-carbon policy reform;
▪Incentivize host country ambition and broadly engage relevant ministries/agencies/stakeholders;
▪Mobilize private capital.
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*https://www.ieta.org/initiatives/modelling-the-economic-benefits-of-article-6; https://openknowledge.worldbank.org/server/api/core/bitstreams/759965cc-fcd6-5167-b890-77efc4bdbffb/content
** https://documents1.worldbank.org/curated/en/650081545377054720/pdf/133140-19-12-2018-17-11-20-CarbonMarketsUnderKPWeb.pdf

3. Programmatic crediting
▪Developed and piloted at the World Bank from 2004 on (CDCF, CPF, Ci-Dev);
▪CDM PoAs since 2007.
▪Objectives when designed:
•Broaden scope: small/micro activities, low-income countries, e.g., clean cooking; √
•Reduce transaction costs → Standardized Crediting Framework, SCF (WB from 2012 on); √
•Enable financial transformation of carbon revenues; ?
•Increase credit volumes beyond project level. x
▪Example WB Energy Access and Quality Improvement Project (EAQIP) in Rwanda:
•Ci-Dev cookstove program using SCF;
•200,000 households gaining access to clean cooking, 2.7mt ERs within 5-years period;
•Rwanda-owned crediting framework scalable and suitable for Art.6 transactions.
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4. Jurisdictional Crediting for REDD+
▪Developed and piloted at the World Bank from 2007 on (FCPF, BioCF-ISFL);
▪jREDD+ adopted by ART-TREES, VCS-JNR standards; access to CORSIA.
▪Objectives when designed:
•Addressing drivers of deforestation/forest degradation; √
•Overcoming leakage and baseline setting issues of project-level REDD+; √
•Protecting interests of and engaging key local communities including benefit sharing; √
•Reaching scale beyond project level and increasing ambition; √
•Reaching sustainable LULUCF development trajectories. ?
▪Example WB FCPF Ghana Cocoa Forest REDD+ Program (GCFRP):
•Climate smart cocoa farming practices, over 300 community projects reached;
•Payments for 10mt in carbon credits from 2019-2024;
•Large scale mitigation impact paired with strong development benefits.
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5. Policy Crediting
▪Developed and piloted at the World Bank from 2017 on (CPF, TCAF);
▪Under consideration by SB Art. 6.4, already partial integration in Gold Standard (CORSIA).
▪Objectives when designed:
•Catalyzing transformative change towards net zero;
•Increasing effectiveness of supporting policy reform;
•Directly incentivizing host country climate ambition;
•Reaching scale beyond project level.
▪Example TCAF Uzbekistan iCRAFT energy subsidy reform program:
▪Electricity and gas end-user tariff reform towards cost recovery;
▪Carbon revenues used for compensating vulnerable households and economic adaptation to higher energy tariffs
(energy efficiency, clean technologies);
▪ 3.6mt ERs in 2022 verified, expected to increase to 10mt p.a.;
▪Major development benefits projected: +180 MW RE; 300k efficient appliances; 2.7 new green jobs; improved air
quality, $ billions in fiscal savings.
https://www.tcafwb.org/programs/uzbekistan-icraft
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6. Policy vs jurisdictional/sectoral crediting
Policy Crediting:
▪Scope: price-based policies, regulatory policies, incentive schemes;
▪ERs attributed to policy;
▪ERs quantified against ex-post counterfactual through modeling (for price-based policies).
Jurisdictional/sectoral crediting:
▪Scope: segments of economy suitable for clear boundary setting;
▪ERs not attributed to a specific climate action;
▪ERs derived from changes in aggregated emissions (before-after observed or modelled).
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7. ToC for transformative impact and sustainability
▪Project-level/programmatic crediting:
•Technology tipping points;
•Ambitious benchmarks + large numbers of projects;
•Lead time: planning/construction phase.
▪Jurisdictional/sectoral crediting:
•Changing jurisdictional/sectoral economics and behaviors;
•Quasi emissions cap/shadow carbon price + sustained large-scale crediting;
•Lead time: technical preparation and capacity building, policy implementation.
▪Policy crediting:
•Shifting enabling environment and directly increasing governments’ ambition levels;
•Focus on critical policy reforms + large-scale crediting during implementation phase;
•Lead time: policy implementation.
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8. WB contribution to SCALE
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•TF consolidation;
•Full integration in Bank
lending;
•Building on 25 years WB
carbon finance;
•RBCF to catalyze carbon
markets;
•Focus on scaled-up
crediting;
•Open to all qualifying
standards.
https://www.worldbank.org/en/programs/scale/overview

9. 9
Thank you