UNITEDNATIONSDEVELOPMENTPROGRAMMEUNDP’sHigh-IntegrityCarbonMarketsInitiativeDecember2023UNDP’sHigh-IntegrityCarbonMarketsInitiativeUNDPistheleadingUnitedNationsorganizationfightingtoendtheinjusticeofpoverty,inequality,andclimatechange.Workingwithourbroadnetworkofexpertsandpartnersin170countries,wehelpnationstobuildintegrated,lastingsolutionsforpeopleandplanet.Learnmoreatundp.orgorfollowat@UNDP.Copyright©UNDP2023.Allrightsreserved.OneUnitedNationsPlaza,NewYork,NY10017,USA.1UNDP’sHigh-IntegrityCarbonMarketsInitiativeContentsAcronyms31.Introduction42.High-integritycarbonmarkets53.Strategiccontext84.UNDPvision,missionandstrategicoutcomes95.UNDP’shigh-integritycarbonmarketoffers11Offer1:Readiness-Carbonmarketaccessstrategies11Offer2:Implementation-Article6ITMOFacility13Offer3:Implementation-JurisdictionalVCM14Offer4:Implementation-Domesticcarbonmarkets&emissiontradingschemes17Cross-cuttingapplicationofhigh-integrityguardrails18Carbonaccountingandtransparency18Socialandenvironmentalsafeguardsandsustainabledevelopmentbenefits206.WhyUNDP?22AdditionalguidanceandUNDPpolicies227.NextSteps23References242UNDP’sHigh-IntegrityCarbonMarketsInitiativeAcronyms©UNDPEuropeandCentralAsiaBVCMBeyondValueChainMitigationCP4DCarbonPaymentsforDevelopmentEREmissionReductionETSEmissionTradingSchemeFPICFree,PriorandInformedConsentGHGGreenhouseGasIC-VCMIntegrityCouncilforVoluntaryCarbonMarketsIHRLInternationalHumanRightsLawITMOsInternationallyTransferrableMitigationOutcomesMRVMeasuring,ReportingandVerificationNDCNationallyDeterminedContributionSBTScience-basedTargetsSDGSustainableDevelopmentGoalUNFCCCUnitedNationsFrameworkConventiononClimateChangeVCMVoluntaryCarbonMarketsVCMIVoluntaryCarbonMarketsIntegrityInitiative3UNDP’sHigh-IntegrityCarbonMarketsInitiative1.IntroductionHighintegrityisatthecoreofUNDP’sexistingcarbonmarketsportfolio,butthereisstillmuchmoretobedoneandeffortstobescaledup.Thisdocumentfirstdefineshighintegrityandthestrategiccontextinwhichthisinitiativeisbeinglaunched.Thevision,mission,andexpectedstrategicoutcomesarepresentedfollowedbytheinitiative’sfouroffers.Thefirstoffer,onreadiness,supportsthedevelopmentofcarbonmarketsaccessstrategiesbasedoncountries’NationallyDe-terminedContribution(NDC)andexistingcarbonmarketsengagement.ThesecondofferpresentsUNDP’ssupporttocountriesonArticle6,andthethirdfocusesonvoluntarycarbonmarketsimplementedatthejurisdictionallevel.Thefourthofferfocusesondomesticcarbonmarketsandemissiontradingschemes.Allfourofferswillbeimplementedfollowingthehigh-integrityguardrailswhichisalsodiscussed.Thefinalsectionoutlinesthenextstepsfortheoperationalizationofthisinitiative.Throughitslaunch,UNDPinvitesfurtherengage-mentanddialoguewithcurrentandprospectivepartnersworkingtowardscommongoals,toidentifyopportunitiestocollaborateandensuresynergies,enablingagreaterpositiveimpact.©UNDPPeru4MonicaSuarezUNDP’sHigh-IntegrityCarbonMarketsInitiative©UNDPKenya2.High-integritycarbonmarketsCarbonmarketsaimtomitigateclimatechangebycreatinganeconomicincentiveforreducinggreenhousegas(GHG)emissionsascost-effectivelyaspossible,supportingincreasedinvolvementoftheprivatesector,inlinewiththeParisAgreement.Insimpleterms,carbonmarketsaretradingsystemsinwhichcarboncred-itsaresoldandbought.Onetradablecarboncreditequalsonetonneofcarbondioxide,ortheequivalentamountofadifferentGHGreduced,sequestered,oravoided.Therearebroadlytwotypesofcarbonmarkets:complianceandvoluntary.Compliancemarketsarecreatedasaresultofanyna-tional(e.g.,NewZealandEmissionTradingScheme),regional(e.g.,EU-ETS)and/orinternationalpolicyorregulatoryrequirement.Attheinternationallevel,Article61theParisAgreement,recognizesthat“somePartieschoosetopursuevoluntarycooperation2intheimplementationoftheirNDCstoallowforhigherambitionintheirmitigationandadaptationactionsandtopromotesustainabledevelopmentandenvironmentalintegrity”.Twomarket-basedinstrumentswerecreatedunderArticle6.Article6.2establishesthebasisfortradinginGHGemissionreductionsorenhancedre-movals(or“mitigationoutcomes”)throughvoluntarycooperationbetweengovernments.Article6.4establishesamechanismfortradingGHGemissionreductionsundertheoversightanddirectsupervisionfromtheUnitedNationsFrameworkConventiononClimateChange(UNFCCC),allowingforthedirectengagementofprivatesectorentitiesauthorizedbytheirnationalgovernments.BothArticle6.2andArticle6.4transfersrequireanexpressau-thorizationbythehostPartyandacorrespondingadjustment3fromtheirNDCtotheParisAgreement.1Formoreinformation:https://unfccc.int/process/the-paris-agreement/coopertive-implementation.2TheuseoftheterminologyvoluntarycooperationbytheArticle6oftheParisAgreementhasledtosomeconfusionamongstpractitionersandpotentialbeneficiariesoftherelationshipbetweentheUNFCCCmarket-basedmechanisms,andthevoluntaryorindependentcarbonmarketsthatoperateoutsideoftheUNFCCC.Forthisdocument,Article6refertothecompliancecarbonmarketsundertheUNFCCCwhilevoluntarycarbonmarketsarethoseoperatedbyindependentcarbonmarketprogrammesthatoperateoutsideoftheUNFCCC.3AcorrespondingadjustmentisanaccountingtoolagreedintheArticle6decisionstoavoiddouble-countingbetweencountries’NDCs.Hostcountriescanauthorizemitigationoutcomes(Art.6.2)oremissionreductions(Art.6.4EmissionsReductions(ERs))tobeusedforNDCcompliance,internationalmitigationand‘otherpurposes’.Suchauthorizationcomeswiththeobligationtoapplyacorrespondingadjustment,meaningtheywillneedtomakeupfortheERstransferredout.5UNDP’sHigh-IntegrityCarbonMarketsInitiativeVoluntarycarbonmarkets(VCM)–nationalandinternational–re-bustprinciplesandguidelinesthatensurehighintegrityacrossfertotheissuance,buyingandsellingofcarboncredits,onavol-alltypesofcarbonmarkets.Thisincludesengagementwiththeuntarybasis.TheUNFCCC,asaframeworkofsignatoryParties,UnitedUNFCCCSecretariat,workingonArticle6andthetwodoesnothavethelegaljurisdictiontoregulatestrictlyvoluntaryvoluntarycarbonmarketintegrityinitiatives,theIntegrityCounciltransactions,i.e.,thoseusingprivatecarbonmarketstandards.forVoluntaryCarbonMarkets(IC-VCM)toenhancethesupplyNationalgovernmentshavehistoricallyhadlittleexposuretoVCMside,andtheVoluntaryCarbonMarketsIntegrityInitiative(VCMI)andhavebeenrelativelyuninformedaboutactivitieshappeningintoaddressthedemandside,aimingtobolstertransparencyandtheircountries.Thereare,however,severalkeyexceptions:whenaccountabilityinthesecriticalfinancialmechanisms.Theworkthegovernmentisaco-implementerofanactivity,isrequiredtooftheseinitiatives,alongsideeffortsbystandardsettingbodiesgivepermitstoprojectdevelopers,orlinksadomesticcarbon(e.g.,GoldStandard,VerraandARTTREES)carboncreditratingspricingschemetoVCMactivities.Thecurrentsupplyofvoluntaryagencies(e.g.,Calyx,SylveraandBeZero),andotherpartner-carboncreditscomesmostlyfromprivateentitiesthatdevelopshipssuchastheCarbonCreditQualityInitiativeandtheorga-carbonprojectsthatgenerateemissionreductionsand/orremov-nizationsthatco-developedtheTropicalForestIntegrityGuide,als.Voluntarycarboncreditsthatdonothavetheauthorizationledtogreaterconvergenceandconsensus-buildingwithinthefromthenationalgovernmenttobediscountedfromtheirNDCscarbonmarketecosystemofactorsonwhathighintegrityisandcanbeusedbythehostcountryfortheirdomesticcarbonmarkethowtoachieveit.orbycompanieswithvoluntaryclimatetargets,eithernationallyorinternationally,aspartoftheircorporateresponsibilities.TheseTheseeffortscouldleadtogreaterconfidenceincarbonmarketsinvestmentscanbereportedbythehostcountryasprivatecli-andnewinvestment.ThereisincreasingevidencethatbuyersmatefinancemobilizedfortheimplementationofitsNDC.arewillingtopayasubstantialpremiumforhigh-qualitycreditsandareprioritizingprogramsthatcandemonstratetransparencyIfdesignedandmanagedtopromotehighintegrity4andclimateandrobustmeasuring,reportingandverification(MRV),aswellambition,carbonmarketscanenablethetransitionofeconomiesasnon-carbonbenefitswithquantifiablepositiveSDGimpacts6.tonet-zerosocietiesbymid-century,advancingtheimplementa-TheoverallimpactofprogressmadetodefinethecoreelementstionofNDCsandacceleratingprogressacrossthe2030Agenda.ofhighintegritydependsontheiruptake,whichisakeyfocusofThebenefitsofcarbonmarketactivitiesvarydependingontheUNDP’sinitiative.country,sector,andtypeofintervention.Thepotentialbenefitsforlocalcommunitiesconsistof,interalia,accesstocleanener-UNDPhasastrongtrackrecord,iswellpositionedandcangyorcleanwater,reducedairpollution,improvementinhealthscale-upsystematicsupporttocountriesandlocalstakeholders,infrastructure,reducedtimespentonthecollectionoffirewood,supportingthegenerationofhigh-qualitycarboncreditsandjobcreation,technicaltraining,waterandsoilretentionandthematchingthemwithhigh-integritybuyers.Todothat,thefollow-protectionofbiodiversity.ThesebenefitscontributetoSustain-ingelementshavebeendefinedbasedontheaforementionedableDevelopmentGoals(SDGs)andaddressglobalchallengesglobalinitiativessettinghighstandardsforintegrityaswellasthebeyondclimatechange,suchasinequality,environmentaldegra-UNFCCCrulesandguidanceforArticle6oftheParisAgreement.dation,andconstraintstosocialdevelopment,justiceandpeace.Theseelementswillbeoperationalizedthroughhigh-integrityguardrailsinallUNDPcarbonmarketsoffers,describedbelowThereareseveralconcernsrelatedtocarbonmarkets,includ-andinmoredetailinsection5ofthisdocument.ingissuesrelatedtodouble-countingofGHGemissionreduc-tions,humanrightsviolations,andgreenwashing(companiesFigures1and2describeboththesupplysideanddemand-sidefalselymarketingtheirgreencredentials,e.g.,misrepresentingofhigh-integritycriterion,respectively,whileBox1lookscloserclimate-neutralproductsorservices).ForcarbonmarketstobeatdemandintegrityandBeyondValueChainMitigation(BVCM).successful,theseconcernsmustbeaddressed.Arobustcarbonmarketreliesoncredibledemand5aswellasastableandhigh-integritysupplyofcarboncredits.Toensurethecredibilityandeffectivenessofcarbonmarkets,UNDPisactivelycollaboratingwithglobalinitiatives,focusingonestablishingro-4Formoreinformationonthedefinitionofhighintegritygoingbeyondenvironmentalintegrity,pleaseseeUNDP’s2021publication,High-IntegrityVoluntaryCarbonMarkets(VCM):EmergingIssuesinForestCountries.5Demand-sideintegrityreliesonentitiesbuyinghigh-integritycarboncreditsandhavingrealcommitmentstoreduceemissionsfromtheirownoperationalandvaluechainprocesses.6BCG,2023;TroveResearch,2023.6UNDP’sHigh-IntegrityCarbonMarketsInitiativeFIGURE1:Supply-sidehigh-integritycriterionCarbonaccountingandtransparency⁷AlignmentwiththeContributiontonet-zeroAccountabilityandRobustquantificationParisAgreementemissionsby2050continuousimprovementsofERs&removalsNodoublecountingAdditionalityPermanenceandTrackingofuniquelyavoidanceofleakageidentifiedcredits(registry)TransparencyofOnlyjurisdictionalorIndependentvalidationcreditedmitigationnestedREDD+projectsandverificationactivities&transactionsSocialandenvironmentalsafeguardsandsustainabledevelopmentbenefits⁸Assessmentandmanage-LabourrightsandResourceefficiencyandLandacquisitionandmentofenvironmentalandworkingconditionspollutionpreventioninvoluntaryresettlementsocialrisksIndigenousPeoples,localcommunities,BiodiversityconservationGrievancemechanismCancunSafeguardsandculturalheritageandsustainablemanagementforREDD+IndependentvalidationofnaturalresourcesandverificationGenderequalityRobustbenefit-sharingEnsuringpositiveSDGimpactsFIGURE2:Demand-sidehigh-integrity9criterionPubliclycommittoscience-basedPubliclycommittomid-centuryJointheUNRacetoZero.targets(SBTi),orequivalent,consistentnet-zerotargetscoveringallthreescopes.MakeclaimsregardingtheusewiththeParisAgreementgoals.ofcarboncreditsfollowingthePubliclyreportaGHGemissionsSeparatelypubliclyreportanyuseofVCMIClaimsCode.inventoryfollowingtheERsorothercarboncredits,includingpurposeofuse.ReportingshouldbeGreenhouseGasProtocol(GHGP).independentlyaudited.BOX1:DemandintegrityandBeyondValueChainMitigation(BVCM)BVCMisthepurchaseofhigh-qualitycarboncreditsbeyondacompany’svaluechain(SBTi,2023).ThisincludesactivitiesthatavoidorreduceGHGemissions,andthosethatremoveandstoreGHGsfromtheatmosphere.Byallowingcompaniestoberecognizedformitigationinvestmentsbeyondjustoffsettingtheirownemissions,BVCMcanbeagoodsolutionfordemand-sideintegrity,addressingtherisksassociatedwithcarbonaccountingaswellasrecognizingimportantinitiativesthatarekeyfortheachievementofclimateandsustainabledevelopmentgoals.Thisisarelativelynewconcept,incorporatedintotheVCMIclaimscode,andmostcountries,inparticulardevelopingcountriesandcompanies,haveyettobeexposedtoit.7AdaptedfromIC-VCMcorecarbonprinciples.8AdaptedfromIC-VCMassessmentframework.9AdaptedfromLEAFcriteriaforbuyerstoincludeVCMIclaimscodecriteria.7UNDP’sHigh-IntegrityCarbonMarketsInitiative©UNDPMongoliaSaruulDolgorsuren3.StrategiccontextCarbonmarketscanserveasusefultoolsforenhancingclimateactionandtheSDGagendainaworldwhereclimatecommit-mentsarelacking,andmitigationandadaptationareseverelyunderfinanced.Compliancemarketsareexpandingingeograph-iccoverageandvaluebutstillneedtoscaleupsignificantlyinscope,ambition,andpricetobeimpactful.TheVCMhasgrownrapidly10,thoughitremainssmallincomparisontocompliancemarkets11.Theincreasinginterestincarbonmarketsgoeshand-in-handwithanexplosionofactorsandinitiativesthatseektopromote,regu-late,orotherwiseinfluencecarbonmarketsindevelopingcoun-tries.Dependingontheirinterestsandconvictions,suchactorsseeksupportforinvestmentproposals,engagecarboncreditingprogramsorpromotebilateralandmultilateralinitiativesthatarelinkedtovoluntarycarbonmarkets,domesticcreditingprograms,orpilottransactionsunderArticle6oftheParisAgreement.Thisproliferationofactivities,interestsandvariousguidanceandimplementthetermsandconditionsoftheresultingagreements.guidelinesonintegrityexposesgovernmentstorequestsandde-Thiscombinationrepresentsariskforpotentialbuyers,affectingmands–withimplicationsthatareoftenpoorlyunderstood.Thistheirabilitytosecureaconsistentsupplyofhigh-qualitycarboncreatesadditionalpressureondevelopingcountries.Theyfacecredits.significantknowledgeandskillsconstraintsaswellasstretchedinstitutionalcapacitytocooperatestrategicallyandmeaningfully.DecisionmakersareoftenoverwhelmedbythecomplexitiesofDevelopingcountriesarewellpositionedtocatalyzethegen-carbonmarketsandthereputationalrisksassociatedwithin-erationofhigh-integrityemissionreductionsandremovals.Totegrity.Theyareincreasinglyworriedaboutcarbonmarketsex-producequalitycarboncredits,countriesneedtechnicalas-portingemissionreductionsandremovalstheyneedtoachievesistancetounderstandandoperationalizethehighintegrityNDCs,badlyexecutedcarbonprojectsthatleadtolocalconflicts,principles.Whiletherearevariousinitiativesthatoffersupportandspuriouscarboncreditclaims,amongotherissues.Theyfeartocountries,theseareoftenpre-packagedanddefined,andfailalossofsovereigncontrolovertheirclimatepoliciesandaretorespondtolocalneedsandcircumstances.Capacitybuildingworriedthatinternationalactorsraiseexpectationsthatleadstoprogramsofferingsupporttohostcountriesareoftenlimitedconflictsinruralareas.Theyalsowanttopreventlocalactorsintherangeofactivitiestheyoffertoparticularsectors,insti-frombeingtakenadvantageofbyinternationalactorsthatclaimtutionsoractors.Thisleadstoapatchylandscapeofsupportthelion’sshareofcarbonmarketprofitsattheexpenseoflocalandinitiativesthatleavesimportantquestionsandchallengescommunities.unaddressed.UNDPhasakeyroletoplayinsupportinggov-ernmentstotakeholistic,comprehensiveandstrategicdeci-Carbonmarketinvestors,beitbuyercountriesortheprivatesionsoncarbonmarketsaspartoftheirNDCimplementation,sector,mustnavigatealandscapeofdevelopingcountrieswithtoaddressknowledgegaps,andcontributetoefficientandhighwillingnesstoenterintonegotiations,butlowreadinesstohigh-integritycarbonmarkets.10Marketgrowthstalledin2023,driveninpartbynegativemediareportinginasmallnumberofnewsoutlets.Thisreportingwasprincipallybasedontwolinesofargument.Firstly,thatcarbonmarketsdelaydirectdecarbonization.Whilealegitimateconcerniftrue,multiplestudieshaveshownthatinfacttheoppositeisthecase.Oneofthosestudies,areportwhichstudied7,400companiesworthUS$110trillion,foundthatcompanieswhousecarboncreditsare1.8timesmorelikelytobesuccessfullydecarbonizingcomparedtothosewhodon’tusecarboncredits(EcosystemMarketplace,2023).Secondly,somehaveraisedconcernsabouttheefficacyandintegrityofcarbonprojectsandtheirroleintheglobalpathwaytoasafeclimate.11EnvironmentalDefenseFund,2023.8UNDP’sHigh-IntegrityCarbonMarketsInitiative4.UNDPvision,missionandstrategicoutcomesVision:Tomakecarbonmarketsworkforhostcountries,NDCsStrategy:UNDPwillprovidestrategicholisticsupportoncar-andtheSDGs.bonmarketstohostcountrygovernmentsthroughitsnetworkofCountryOffices.Countrieswillreceivehigh-levelstrategicUNDPwillfocusonsupplysideintegrity,inanefforttoleveltheplay-informationandtargetedtechnicalassistancetoaccesscarboningfield–forhostcountriesatnational,sectoralandprogrammaticmarketsfinance,guidedbyprinciplesforhighambitionandenvi-levels,butalsoforlandowners,farmers,householdsandrights-hold-ronmentalandsocialintegrity,includingconsiderationofArticleers,includingIndigenousPeoples,localcommunitiesandwomen–6,voluntarycarbonmarketopportunities,andtheestablishmentwhocontributetoandbenefitfromcarboncreditingprograms.ofdomesticcarbonmarketsmechanisms.UNDPcarbonmarketsworkwillbeintegratedwithotherareasofUNDPClimate,notablyTheinitiativewillseektoensureallpartiesareequallyinformedtheworkfromtheClimateStrategiesandPolicyteam,theClimateandcapacitatedtostrategicallyengage;thatfairerterms,con-ChangeMitigationteamandtheClimateandForeststeam.Thisditionsandpricesarenegotiatedwithbuyers;andimportantly,workwillbecoordinatedwiththeSustainableFinanceHubandthatbenefitsharing,SDGimpactsandsocialandenvironmentalworkthroughtheregionalhubstobettersupportCountryOffices.safeguardsareatthecoreofcarbonprogramdesignandimple-mentation.Thiseffortwillseektoensurethatcarbonmarketin-Figure3presentstheexpectedoutcomesfromthisstrategyvestmentsandbenefitsremaininthehostcountries.whileFigure4presentsthelinesofactionthatUNDPwillunder-taketoachievethis.Mission:Assisthostcountriesandlocalstakeholderstoaccesshigh-integritycarbonmarketsatscale,inordertocontributetoglobalclimatechangemitigationtargets.FIGURE3:Strategicoutcomes1UnlockingcarbonmarketfinancefortheenhancedimplementationofNDCsandSDGs.2Fosteringequityincarbonmarkets,improvingoutcomesforhostcountriesandlocalstakeholders.3Increasingthesupplyofhigh-qualitycarboncreditsonaglobalscale.FIGURE4:LinesofactionCONVENINGdiversestakeholders,includinggovernments,corporates,projectdevelopers,investors,civilsociety,IndigenousPeoples,localcommunities,womenandotherstocollaborativelyforgepathwaystoachievehigh-integritycarbonmarkets,whileadvancingclimateanddevelopmentobjectivesinaholisticandsustainablemanner.SUPPORTINGgovernmentstoestablishenablingpolicy,regulatoryandlegalframeworks,andinstitutionalcapacitiesfordesignandsustainableimplementationofhigh-integritycarboncreditingprograms.INTEGRATINGthehigh-integrityguardrailsintohostcountries’decision-makingandpractices,ensuringtheirincorporationacrossallcarboncreditingprograms–atproject,sectoralandjurisdictionallevels.12Includingforexample,women,IndigenousPeoples,localcommunities,otherrights-holders,landowners,households,farmers,civilsocietyorganizationsandothers.9UNDP’sHigh-IntegrityCarbonMarketsInitiative©EnvatoElements10UNDP’sHigh-IntegrityCarbonMarketsInitiative5.UNDP’shigh-integritycarbonmarketoffersUNDPadoptsaportfolioapproachdividedintotwoseparatedbutAllUNDPworkoncarbonmarketswillbeguidedbythecross-cut-complementarystreamsandfouroffers,whichwillbeadaptedtotingimplementationofhigh-integrityguardrails.Thisinitiativeistheneedsandcircumstancesofinterestedcountries:builtuponpriorlessonslearnedbyUNDPintheprovisionofcar-bonmarketssupportandremainsopentocontinuousimprove-1.Readinesssupport(Offer1)andment.Figure5illustratesUNDP’sportfolioapproach.2.ImplementationsupportforArticle6(Offer2),forvoluntaryjurisdictionalcarbonmarkets(Offer3)andfordomesticcar-bonmarketschemes(Offer4).FIGURE5:UNDPoffersforcarbonmarketsreadinessandimplementationsupportReadinessImplementationOffer1Offer2Offer3Offer4Article6.2ITMOsCarbonmarketsJurisdictionalvoluntaryDomesticcarbonaccessstrategiescarbonmarketsmarkets/emissiontradingschemesCross-cuttingapplicationofhigh-integrityguardrails:Carbonelements;Socialandenvironmentalsafeguards;EnhancementofSDGsOffer1:Readiness-CarbonmarketaccessstrategiesSupportwillbeofferedinthreetiers:ties);whilethesecondtierwillbeforcountriesandcommunities1.Introductiontocorecarbonmarketconcepts;readytoengagemoredeeplyandconsistentlyonthetopic.This2.Country-tailoredsupporttodevelopacarbonmarketaccessofferissupportedbylearningmodules.Figure6andFigure7be-strategy13;andlowshowthemoduleoutline,thekeythemesthatwillbecovered3.Promotingdemand-sideintegrity.ineachmoduleforTier1andTier2,andtheirexpectedresults,respectively.Thethirdtierisfocusedondemand-side,anditisThefirsttwotiersarefocusedonsupplysideintegrity.Thefirstopentobuyercountriesaswellasprivatesectorentitiesthataretierwillbeopentoalargergroupofhostcountriesandlocalcommittedtopromotinghighintegrity.Figure8belowshowsthestakeholders(includingIndigenousPeoplesandlocalcommuni-demand-sidemoduleoutline,keythemesandexpectresults.13ThisbuildsonUNDPexperiencedevelopingtheVCMAccessStrategyToolkitdevelopedwithClimateFocusandVCMIin2022.11UNDP’sHigh-IntegrityCarbonMarketsInitiativeFIGURE6:Tier1-Introductorylearningmodule:carbonmarketconceptsIntroductiontoHighIntegrity–HighIntegrity–AnalysisandcarbonmarketsCarbonelementsSocialelementsemerginglessonsOrientationtotheThelatestthinkingonenviron-ThelatestthinkingonsocialMakingsenseofthecarbonmarketecosystemmentalintegrityandwhatitintegrityandwhatitmeanscomplexitymeansforhostcountriesforhostcountries⊲Highlevel⊲Historicalandfuturetrends⊲Robustquantification⊲Socialandenvironmentalrecommendationsforhost⊲Compliancev.voluntarymarketssafeguardscountries⊲Pricing⊲ParisAgreementaligned⊲Carbonmarketpotential⊲SDGImpact⊲Entrypointsforfurther⊲Carbonmarketactors⊲Contributiontothenet-zerotransitionengagement⊲Leadingcarbonstandards⊲Stakeholderengagement⊲Demand-sideclaims⊲Nodoublecounting(includingdoubleRespectforIndigenousRolesgovernmentscanplayissuance,claiming&use)⊲Peoplesrights⊲Additionality,permanence,noleakage⊲Genderequalityandwomen’sempowerment⊲Robustindependentthird-partyvalidationandverification⊲Benefitsharing⊲Trackingofuniquelyidentified⊲Grievancemechanismscredits(registry)⊲Casestudy:Supporting40⊲TransparencyofcreditedmitigationJurisdictionstoaddressForestactivities&transactionsCarbonMarketSafeguardsStandard⊲OnlyjurisdictionalornestedREDD+projectsExpectedresults:⊲Informedandengagedoncarbonmarketessentials.⊲Clearersenseofopportunitiesandrisksassociatedwiththecarbonmarket.⊲Clarityonnextstepsrequiredtoengagefurtheroncarbonmarkets.⊲Establishnewrelationshipsandpartnershipstosupporttheirengagementincarbonmarkets.⊲Knowhowtoaccessadditionalresourcestosupporttheirconsiderationofandengagementincarbonmarkets.⊲Betterplacedtoengageinstrategicdiscussionsrelatedtotheirinterestsandroleincarbonmarkets.FIGURE7:Tier2-Country-tailoredmodules:carbonmarketsaccessstrategiesModuleswillbebasedoncountry-specificdata,analysisandassessments.Technicalassistanceandstakeholderengagementwillbesupportedbyateamofexperts,focusedontailoringsolutionsandapproachestothenationalandlocalcontexts.IfandwhentoengageHowtofinanceNDCsTheroleofEstablishinglegalEnsuringhigh-incarbonmarketscarbonmarketsinandinstitutionalintegritycarbonNDCachievementframeworksmarketactivities⊲Assessthepotential⊲Determinefinance⊲Article6readiness⊲Clarifycarbonrights⊲AligncarbonmarketofengagementinneedsforimplementingworkshopsandtrainingsactivitieswithhostcarbonmarketsNDC⊲Addressinstitutionalcountrypolicies⊲Clarifywhenemissionandregulatoryissues⊲Determinewhich⊲Identifyfinancingreductionsandremovals⊲Putinplacenationalrolesthehostcountryinstrumentsavailablecounttowardsthe⊲RegulatorycarbonaccountinggovernmentwillplayforimplementingNDChostcountry’sNDCandinstitutionalrulesachievementframeworksforArticle⊲Identifytheexisting⊲Facilitatefinance6implementation⊲Ensurehigh-qualitymarket:mappingformitigationthrough⊲ConsiderdoublecountingsupplyofcarbonofVCMandCDMcarbonmarketsanddoubleclaiming⊲ITMOworkflowcreditsactivitiesplatformandregistry⊲Developapolicyon(thetwosystemsare⊲Ensurehigh-correspondingadjustmentsalreadylinked)integrityuseofcarboncredits⊲AvoidrisksrelatedtocarbonmarketengagementTheexpectedresultofTier2supportisaCarbonMarketAccessStrategythatclarifiesforthehostcountryandlocalstakeholdersthepointsaboveandaroadmaptomoveforward.12UNDP’sHigh-IntegrityCarbonMarketsInitiativeFIGURE:Tier3-Promotingdemand-sideintegrityIntroductiontotheconceptofhighintegrityExistingglobalinitiativesPlatformstopromoteawareness(supplyanddemand)focusedondemandandpartnerships⊲Whatishighintegrity.⊲SBTIscience-basedtargets⊲Roundtablesanddialoguesbetween⊲BeyondValueChainMitigationhostcountriesandbuyercountries.⊲Whoarethemainactorsinthisdomain.⊲VCMIguidanceoncorporate⊲Dialoguesbetweenhostcountriesclaimsandprivatesectorentitiesthatinvestin⊲Whataretherisksassociatedwithnotcarbonmarkets.followingahighintegrityapproach.⊲Engagingandbuildingcapacitiestoengageincarbonmarketsofprivate⊲Clarifyingkeyconceptsincludingnetsectorentitiesfromtheglobalsouth.zero,carbonneutral,etc.⊲Theroleofcarbonmarketsincorporateresponsibilitypledges.Expectedresults:Informedbuyersmakestrategicdecisionswithregardstotheirowncorporatetargetsaswellasforthepurchaseofcarboncreditsandtheclaimsmaderegardingtheirclimatechangemitigationcommitments.Offer2:Implementation-Article6ITMOFacilityArticle6oftheParisAgreementdetailsasetoftoolsandmech-transferreadinessandenhancecountries’carbonmarketpartici-anisms,suchascooperativeapproachesandthetransferofIn-pation.Theproject,whichisalreadyactiveinGeorgia,Ghana,Ma-ternationallyTransferrableMitigationOutcomes(ITMOs),thatcanlawi,Morocco,Peru,SenegalandUruguaywillprovidetechnicalstimulateinvestmentsintomitigationactivitiesandNDCimple-assistancetargetedtowardsthefollowingdeliverables:mentation.ThisofferwillfocusonArticle6asanentrypointforcarbonmarketsandwillbuildonlessonsfromUNDP’sCarbon•AssessmentofcapacitygapsandneedsforITMOtransferPaymentsforDevelopment(CP4D)Facility,whileexpandingitsreadiness.pipelineandenhancingitsapproachwithadditionalhigh-integ-rityguardrails.CP4Dhasinitiatedsupporttocountriesthrough•DevelopmentofthelegalsettingforArticle6.2.projectimplementation,technicalassistanceandcapacitydevel-•Setting-upITMOregulatoryandoperationalprocesses.opmentinsupportofthefollowingtwoprograms:•FacilitatingdigitalprocessflowstostrengthencooperationITMOsforDevelopment:AcollaborationwiththeSwissFederalandenhanceawarenessofArticle6.2.OfficefortheEnvironment(FOEN),withfouractiveprojectsintwo•Hands-on‘learningbydoing’ontheoperationalizationofcountriesandapipelineinadditionalcountries.ThisisaUS$42millionpay-for-resultscollaborationtounlockthedevelopmenttheITMOprojectcycle.benefitsofprivateclimateinvestmentsindevelopingcountrieswhilesupportingSwitzerlandtoreduceGHGemissionsgener-UNDPwillhelpfurtherstrengthencountrycapacities,improveatedbyitsgovernmentoperations.Beyondreducingemissions,carbonmarketreadiness,andenhanceITMOworkflowsthrough:climatemitigationprojectscandirectlyorindirectlyyieldmanydevelopmentbenefits–includingjobcreation,accesstoenergy,•CarbonCooperation,anewdigitalplatformwhichaimstosupporttolivelihoodsandfoodsecurity,genderempowermenthelpcountriesprocessITMOprojectsmoretransparentlyandmore.Thisagreementwillbeactivefrom2022until2031andandefficiently;andaimstoboostthedevelopmentbenefitsassociatedwithclimatemitigationprojects.Itcurrentlysupportsenergyaccessthrough•Article6.2capacitydevelopmentonlinecourse,launchedsolarpowerinVanuatuandclimate-smartagricultureandcom-byUNDPandtheUNFCCCatCOP27,thecourseaimstopostinginGhanaandPeru.Throughthisinitiative,UNDPisamongequipgovernmentrepresentatives,privatesectorandthefirsttocreateconcretedemandforITMOs.UNDPwillimple-civilsocietytomakedecisionsrelatedtotheparticipa-mentprojectsthatwillgenerateupto2.3milliontonnesofCO2tionincooperativeapproachesunderArticle6.2oftheequivalentinemissionsreductionsforSwitzerlandwhileadvanc-ParisAgreement,andtohelprelevantpolicymakersandingprogressontheSDGs.technicalstafftounderstandthedifferentpolicy,techni-calandprocessescomponentsrequiredtooperational-izeArticle6.2intheircountry.IthasalsobeentranslatedintoFrenchandSpanish.Figures9and10describetheservicedeliveryactivitiesofOffer2andtheexpectedresults,respectively.Article6TransferReadinessProject:WithsupportfromtheSwissStateSecretariatforEconomicAffairs(SECO),theprojectaimstocomplementtheITMOsforDevelopmentprojectbyprovidingthetechnicalassistancenecessaryforcountriestodevelopArticle613UNDP’sHigh-IntegrityCarbonMarketsInitiativeFIGURE9:ServicedeliveryforOffer2Strengthencountries’capacitiestoengageinArticle6.2.Facilitatethedevelopmentofpolicies,regulationsandinstitutionalarrangementsforITMOtransfers.SupportthedevelopmentforthedigitalinfrastructureforITMOtransfers.Engageprivatesectorthroughtheidentificationandfacilitationofpublicprivatepartnerships.DevelopMitigationActionDesignDocuments(MADDs)toguideprojectimplementation.ValidationofITMOprojectsandverificationofITMOs,issuance,transferandmonetizationthroughtheengagementofindependentvalidatorsandverifiers.Paymentforperformancetoincentivizeprivatesectorinvestmentuponpositivethirdpartyverification.FIGURE10:Offer2strategicoutcomes231Scaled-upcarbonfinanceisunlockedSDGsaresupportedthroughthethroughpublicprivatepartnerships.implementationofhighimpactprojectsEnhancedcooperationamongstwithsignificantco-benefits.countriesforNDCimplementation.Offer3:Implementation-JurisdictionalVCMIndependentjurisdictionalstandardscurrentlyusedforVCMestcountriesidentifyaskeychallenges:thediversityofcarbontransactionscanalsoqualifyforArticle6transactions,ifthemarketstandardswithdifferentrequirements;thelackofclarityhostcountryapprovestheinternationaltransferofmitigationonhowtheVCMrelatestoArticle6andNDCaccounting;theoutcomestomeetanothercountry’sNDCandbothPartiesagreealignmentofVCMproject-levelinitiativeswithnationalREDD+tousethestandardasthebasisfortheITMOtransaction.frameworks;andlimitedopportunitiestoengagedirectlywiththeprivatesectorinVCMdiscussions.VCMstandardshavecreatedopportunitiestoimplementmit-UNDPisassistingcountriestoaddressthesechallengesbyigationactionatscale,goingbeyondproject-basedactivitiesassessingoptionsforengagingwithhigh-integrityVCMandtosupportjurisdictionalimplementation.Aligningprojectandsupportingthemtomeetapplicablerequirements,suchasen-jurisdictionalVCMinitiativeswithnationalframeworkscanhelphancingMRVcapabilities,policyalignmentandstrengtheningcountriesoptimizeaccesstodifferentclimateandcarbonfinanceinstitutions.UNDPisalsostrategicallyconnectingnationalgov-sourcesandpromoteaconsistentapproachtomeethigh-integ-ernmentswithpotentialdonors/buyerstofacilitatemarkettrans-rityrequirements.actions;andconveningdialoguestoprovidetechnicalinforma-tionandshareknowledgeonVCM.ToprovidecredibilityandfostertrustinVCMtransactions,severalindependentprivatestandardshavesurfacedwithjurisdictionalTheLEAFCoalitionisconvenedandcoordinatedbyEmergentmethodologiesforforestsectormitigationaction.Tropicalfor-ForestFinanceAccelerator(Emergent).Emergentisanon-profitfacilitydedicatedtofacilitatingtransactionstoraiseglobalcli-mateambitionandcontributetohaltingtropicalandsubtropical14UNDP’sHigh-IntegrityCarbonMarketsInitiativedeforestationandforestdegradationby2030.UNDPassistsfromthepurchasewillbechanneledtothecountrybyUNDPcountriesintheireffortstohavetheirREDD+resultscertifiedun-toimplementpoliciesandmeasurestoadvancetherespectivederTREESandpotentiallysoldtoLEAF,ortootherbuyersinter-country’sNDCcommitments.Figure11belowshowshowUNDPestedinhigh-integrityjurisdictionalREDD+credits.canactasthefinancialintermediarythroughexistingmodalities.UNDP’skeyroleinthepartnershipistoactasfinancialintermedi-Wellmanagedproceedsfromthesaleofvoluntarycarboncred-aryandmanageemissionsreduction(ER)purchaseproceedstoitswillincreaseinvestors’confidenceinusingtheVCMasasupportimplementationofpoliciesandmeasuresofthepartici-mechanismtofinanciallycontributetotheimplementationofpatingcountryNDCand/orjurisdictionalREDD+strategy,ensur-thehost-country’sNDC.ThiscouldhaveamultipliereffectforingcompliancewithUNDPSocialandEnvironmentalStandardsmuch-neededinvestmentsfrominternationalprivatecorporationsaswellappropriatefiduciarymanagement.Thefirstcountriesintonationalprivatesectorlow-carboninitiatives.UNDPcanassistidentifiedtobenefitfromtheproposedpartnershipwithEmer-countriesinthedevelopmentoffinancingstrategiesandbusinessgentareEcuadorandGhana.EmergentwillpurchaseERsfrommodels,includinginthecontextofblendedfinance,withtheaimthesecountriesonbehalfoftheLEAFCoalition.TheproceedsofattractingprivateclimatefinanceforNDCimplementation.FIGURE11:UNDPasfinancialintermediaryGOVERNMENTSFinancialguarantee1FinancingAgreementUNDPFinancialresources(E.G.NORWAY)Financialresources3ProdocCarboncreditsretired(notusedbycountry)EMERGENTPRIVATEFinancialresourcesEmissionReductionPurchaseCOUNTRY/COMPANIESCarboncredits2Agreement(ERPA)JURISDICTIONCarboncreditsBeyondthequalityofcarboncredits,VCMcredibilityreliesalsoandenvironmentalsafeguards;respectfortherightsofIndige-ondemand-sideintegrity,i.e.,privatesectorclaimsandtheircli-nousPeoplesandlocalcommunities(includingfree,priorandin-matechangemitigationcommitments.UNDPencouragescom-formedconsent(FPIC))andwomen;establishingequitablebene-paniesusingvoluntarycarboncreditsfortheircorporatecommit-fitsharingarrangements,stakeholderengagementplatformsandmentstofollowtheVCMIclaimscodeofpractice.effectivegrievancemechanisms,aswellastechnicalassistancetoensurethequalityandtransparencyofcarbonaccountingforThisofferbuildsonUNDP’swellestablishedForestCarbonresults-basedfinanceandcarbonmarkets.Portfolio14,whichhashadacommitmenttohighintegrityfromitsstart,andaworld-classtrackrecorddemonstratinganabilityFigures12and13describetheforestservicedeliveryofOffer3todeliveronthosecommitments,notablyonthetopicofsocialandtheexpectedresults,respectively.14UNDPhassupported31countriesandanadditional35subnationaljurisdictionsfinalizingsocially-inclusiveREDD+StrategiesorActionPlans;14countriesestablishingcostedREDD+implementation/investmentplans;20countriesenhancingtheroleofforestsandlanduseintheirupdatedNDCs(2021);TheDemocraticRepublicofCongodesigningandoperationalizingapioneerNationalREDD+Fundandaccessingover$150millionthroughtheCentralAfricanForestInitiative(CAFI)toimplementitsnationalREDD+investmentplan;4countriesaccessingREDD+results-basedpaymentsfromtheGCF,withUNDPasAccreditedEntity:Brazil($96million),CostaRica($54million),Ecuador($18.5million)andIndonesia($103.8million);and3pioneercountriesenteringintoforest-carbonpurchaseagreementdiscussionswiththeLEAFinitiative(over$200milliontotal).15UNDP’sHigh-IntegrityCarbonMarketsInitiativeFIGURE12:UNDPservicedeliveryforOffer3Convening,knowledgesharing,capacitybuildingonapplicablecarbonstandardrequirements,methodologiesandapplications.Assessingfeasibilityofcarbonprogramtomeetcarbonstandardrequirements.Roadmapandtechnicalsupporttoensurecarbonprogrammeetscarbonstandard.Safeguardsassessmentsandinstitutionalcapacitybuildingtoimplementplansforconformance.NegotiatingthetermsoftheERPA,includingnavigatingcomplextopics(e.g.sovereignty,immunities,legaljurisdiction)Actingasafinancialintermediary.Supportingnationalentitiestoestablishframeworkstogaindirectaccesstoclimatefinanceinthefuture.FIGURE13:Offer3strategicoutcomes231Greatersupportandon-the-groundEffectiveuseofperformance-basedinvestmentsforlow-carbontechnologies.finance.Enhancedinternationalprivateclimatefinance.©UNDPZambiaKarinSchermbrucker16UNDP’sHigh-IntegrityCarbonMarketsInitiativeOffer4:Implementation-Domesticcarbonmarkets&emissiontradingschemesDomesticmarket-basedmechanismscanmobilizeprivatefinancedevelopedguidancefordevelopingnationalcarbonfootprinttosupportNDCimplementationandhelpcountriesreachtheirprogrammesinLatinAmerica.Oneofthemaincomponentsofnet-zerotargetsbymid-century.Domesticmarket-basedmecha-thesenationalcarbonfootprintprogramsistoincentivizeorgani-nismscanbeeithercompliance(withtargetssetbylawsandreg-zationstomeasureandreducetheircarbonfootprintandmobilizeulationsonspecificsectorsorthewholeeconomy)orvoluntarynationalprivateclimatefinanceforNDCcompliance.InEthiopia,(opentoparticipationfromtheprivatesectorbutwithnospecificUNDPhassupportedthegovernmenttoset-upavoluntarycar-targetsorobligations).Thesemarket-basedmechanismsareim-bonmarketschemeforbusinesses,identifiedeligibleprojectsplementedbynationaland/orsubnationalgovernments,withnoandprovidedtechnicalassistancewiththecalculationofemissioninternationaltransferofthemitigationoutcomes(i.e.,noimpactreductionsandassessmentofSDGimpacts.onNDCaccounting).Despitethevoluntaryformat,carbonfootprintprogrammescanThereareabout30emissiontradingschemes(ETS)orcapandbeameansforpilotingandbuildingcapacitiesfortheETS.Intradeprogramsaroundtheworld,implementedatsubnationalgeneral,theseprogrammesprovideanonlinetoolforcalculatingornationallevels,thatsetalimitorcapontotalGHGemissionsemissionsandawardsealstoorganizations,territoriesand/orthroughregulation.Allowancestoemitaredistributedtoliableen-productsthatreport,reduce,orneutralizetheircarbonfootprint.titiesthatmustredeemtheseforeveryemittedtonneofGHG.En-Inaddition,thesenationalcarbonfootprintprogrammesofferaf-titiesthatuselessallowancesthantheyhave,maysellittoentitiesfiliationincentivesbasedonincreasingreputationandgeneratingthatneedtoemitmore.Thepriceoftheallowanceandthecostsaddedvalue.TheseprogramsusuallyfollowISO14064andISOofreducingGHGemissionswillinformtheentity’sdecision.An14067andwellasGHGProtocolguidance.ETS–asopposedtoatax–limitsorcapstheallowedamountofGHGemissionsandleavesittothemarket(i.e.,“trade”)tosettheOverall,engagingdomestically,countrieshavetheabilitytotestpriceofcarbonthroughemitterstradingemissionsallowances.thedifferentoptionswithoutnegativelyimpactingtheirabilitytoachievetheirNDCtargets.Todothat,countriesneedtohaveaUNDPcarbonmarketssupportistailoredtocountries’contextsminimumlevelofGHGemissionscomingfromprivatesectorac-andintermsofdomesticmechanisms.Examplesofsupporttotivitiesthatjustifiesthecreationofamechanism,i.e.,thereneedscountriesonETSincludeMalaysiawhereUNDPprovidedtechnicaltobebothsupplyanddemand.Pilotingadomesticmarket-basedadviceforthesettingupofthedomesticcompliancecarbonmar-mechanismforafewsectorswhileconsideringtaxingcarbonketswithafocusontheforestsector,includesthedevelopmentofemissionsinanothersectormightbeagoodwaytolearnbydo-protocolsandrecommendedinstitutionalarrangements.Anotheringandtesttheoptions.Insomecountries,subnationalETSand/exampleisinIndonesia,whereUNDPhassupportedthefeasibilityorvoluntarycarbonfootprintprogramswerecreatedbeforetheassessmentsandtechnicalrecommendationsforanETS.nationalETScameintoforce.Ifthedomesticschemedoesn’trelyoninternationalstandards,governmentsalsohavetheadvan-Outsidetheregulatoryframework,severalcountrieshavesetuptagetoavoidthelengthoftimeneededtohavecarboncreditsnationalvoluntaryschemestoencouragenon-stateactorstosup-certified,bycreatingsimplerprocessestoaccountforemissionsportdomesticmitigation.These“carbonneutrality”programssetandissuecredits.Thiswouldalsosignificantlyreducecostswhileguidanceforthevoluntarymeasurementofthecarbonfootprintallowingtheprivatesectorinthatcountrytogetreadytoengageofprivatesectorentitiesandguidelinesoncreditsthatcanbeincarbonmarkets.accruedtocompensatefortheseemissions.UNDPhassupportedtheimplementationofVoluntaryNationalCarbonFootprintPro-Figures14and15describetheservicedeliveryofOffer4andthegramsinChile,CostaRica,Ecuador,PanamaandPeruandhasexpectedresults,respectively.17UNDP’sHigh-IntegrityCarbonMarketsInitiativeFIGURE14:UNDPservicedeliveryforOffer4Technicalassistancefortheaccountingofemissionsandremovalsfromcompaniesorjurisdictionsinaparticularsector.DevelopmentofpositivelistsofprojectsandprogramsinalignmentwiththeNDC.Assessmentandsupportforaligning,clarifyingorproposinginstitutionalarrangementsforimplementation.Accreditationofvalidatorsandverifiers.Legalfeasibilityassessmentoncarbonrightsandsupportforcreatingtheseschemesalignedwithnationallegislation.Settingupofregistries,toolsandinstrumentstotrackprogressinimplementationandpromotetransparencyoftransactions.FIGURE15:Offer4strategicoutcomes231GovernmentcapacitytoengageinPublicawarenessisraisedwithcarbonmarketsisenhancedwithoutconsumersbecomingmoreconsciousPrivatesectorengagementinclimatenegativelyimpactingtheNDC.oftheirclimateimpact.mitigationopensnewmarketstolocalcompaniesandproducts.Cross-cuttingapplicationofhigh-integrityguardrailsUNDPsupportoncarbonmarketswillbeguidedbytheapplica-accounts.Inthecaseofleakage,thereshouldbeanestablishedtionofthefollowinghigh-integrityguardrails.processforassessingandmitigatingleakageofemissionsthatmayresultfromtheimplementationofacarbonprojectorprogram.CarbonaccountingandtransparencyTheGHGemissionreductionsorremovalsfromthesupportedmit-High-integritycarbonmarketsrequirehigh-qualitycarboncredits.igationactivitiesshallnotbedoublecounted,i.e.,theyshallonlyThisentailsseveralkeycomponentsorconsiderations,whichwillbecountedoncetowardsachievingmitigationtargetsorgoals.guideUNDP’sengagementandsupportoncarbonmarkets-relat-Doublecountingcoversthreemaincategories:(1)doubleissu-edwork.Emissionreductions/removalsmustbeadditional.Whileance;(2)doubleclaiming;and(3)doubleuse.Thecarbon-creditingtherearevaryingdefinitionsofadditionality,UNDPappliesthefol-programshallhaveprovisionstoensurethat:1)itdoesnotissuelowing:ThecarboncreditrepresentsGHGemissionsreductionscarboncreditsforGHGemissionreductionsorremovalswhereorcarbonsequestrationorremovalsthatexceedanyGHGreduc-anotherprogramhasissuedcreditstothesamemitigationactivi-tionsorremovalsrequiredbylaw,regulation,orlegallybindingtyand/orforthesameGHGemissionreductionsorremovalsandmandate,andthatexceedanyGHGreductionsorremovalsthathasnotcancelledthosecredits(doubleissuance);(2)thesamewouldotherwiseoccurinaconservative,business-as-usualsce-emissionreductionisnotclaimedbytwoormoreentities(doublenario.claiming)and(3)auniqueunitisnotusedtwice(doubleuse).Closelyrelatedtoadditionality,therobustquantificationofemis-Transparencyiscriticalforhigh-integritycarbonmarkets.Onsionreductionsandremovalsisessential.Thistranslatestoquan-thegovernment-side,thefocusofensuringthisguardrailwillbetificationthatisbasedonconservativenessandcompleteness,technicalassistanceonreporting,toenhancetransparencyandanduseofsoundscientificmethodsthatareconsistentwithIPCCaccountability,whichwillcomplementUNDP’sbroadertranspar-guidance/guidelines.Credible,updatedbaselinesthatreflectencyportfolio.Onthedemandside,itwillfocusonensuringthecurrentconditions,robustMRVprotocols,anddiscountingforun-transparencyofcompanies’reportingoncarbontransactions.certaintyandleakagemustbeapplied.CarboncreditsneedtoProjectorprogrammedocumentationneedstobemadepublic-addressnon-permanence,ortheriskofreversals.Inotherwords,lyavailableinelectronicformat(unlessconfidentialbusinessin-thecreditsmustrepresentlong-termmitigationbenefits.Thisisformation)anditshouldbeofsufficientdetailandclaritytoallowoftendefinedas100years.Thecoreissueforpermanenceisnot,scrutinyofmitigationactivitiesbynon-specialisedaudiences,ashowever,whetherthereisreversalrisk,butrather,ifsuchrisksarewellassufficientdetailforthedataandinformationforatechnicalcoveredbycompensationmechanisms,typicallymandatorybufferexperttoreplicatethemethodologicalapproach,calculations,etc.18UNDP’sHigh-IntegrityCarbonMarketsInitiativeEachcarboncreditgeneratedmusthaveclearandtransparentcreditedinstitutionorcompany,designatedviatheapplicablechainofcustody.Aregistryneedstobeutilizedtouniquelyidenti-standardorprogramme.fy,recordandtrackmitigationactivitiesandcarboncreditsissuedtoensurecreditscanbeidentifiedsecurelyandunambiguous-Toaddresstheseelementsofhighintegrityanddelivertheactivi-ly.Acountryneednotnecessarilydevelopitsownregistry;buttieslistedbelow,UNDPwillapplytheAssessmentFrameworkforinstead,maymakeuseofaprogramme-specificregistry(VCM)theCoreCarbonPrinciplesestablishedundertheIC-VCM.TheIn-and/orArticle6registry,asrelevantandapplicable.Inthecon-tegrityCouncil’sCoreCarbonPrinciples(CCPs)andAssessmenttextofitsdigitalstrategy,UNDPhasbeendevelopinganopen-Framework(AF)aimtoestablishaconsistentandstandardizedsourcesoftwaresystem,whichhasbeenaccreditedasadigitalguidetoassessthequalityofcarboncredits.Whererelevantandpublicgoodandallowscountriestoeffectivelymanagenationaldeemednecessary,thiswillbesupplementedwiththeCarbondataandprocessesforcarboncredits,aspartofabroaderopenCreditQualityInitiativeScoringTool.Thisisafree,interactivetoolsourceintegratedMRVsystemfortrackingemissionsandremov-toscorethequalityofcarboncredittypes.alstoassessprogresstowardNDCmitigationgoals/targets.Figure16describesthecarbonaccountingactivitiesthatUNDPFinally,athirdpartyentitymustconductvalidationandverifi-willdeliveracrossitscarbonmarketsportfolio.cationofanycarboncreditingprojectorprogramme,viaanac-FIGURE16:UNDP’scarbonaccountingandtransparencyactivitiesApplicationofgloballyrecognizedframeworksandtoolsforcarboncreditqualitytothecarbonprogramsitsupports.AssessandstrengthentechnicalcapacityandinstitutionalandgovernancearrangementsforMRV,inlinewithapplicablestandardsEstablishorimproveuponsystems,procedures,guidelinesrolesandresponsibilitiesforgathering,processing,andreportingonGHGemissionreductionsandremovals,inalignmentwiththerequirementsforvalidationandverificationbythirdpartiesunderapplicablestandards.HarmonizeandsimplifythelinkagesbetweenthediversesetsofrequirementsandnationaleffortstoaddressMRVofemissionsreductions/removals,reducingtheburdenoncountries.Providetrainings,webinars,South-Southlearningexchangesrelatedtoalloftheabove,forgovernments,IndigenousPeoples,localcommunitiesandotherkeystakeholders.©UNDPHondurasRafaelRivera19UNDP’sHigh-IntegrityCarbonMarketsInitiativeSocialandenvironmentalsafeguardsandsustainabledevelopmentbenefitsTheimportanceofsafeguardsandenhancedSDGimpactinthecisionmaking);socialandgenderinequalities;weakmonitoringcarbonmarketisunquestionable.Thereisgrowingrecognitionframeworks;andinsufficientleveragetocatalyzetransformation-thatthequalityofacarbonunit(anditsassociatedprice)needsalchangerequiredtoaddressdeeperrootedormorecontestedtobedefinedbytheextenttowhichtheactionsleadingtoresultsissues(e.g.,tenurereform,carbonrights).Effectivelydemonstrat-effectivelyapplysocialandenvironmentalsafeguardsandem-ingcompliancewithsafeguardsrequirementsundercarbonmar-bedcoreinternationalstandardsrelatedtohumanrights,equity,ketstandardsandbeingabletoprovideupdated(participatory,participation,andgovernance,amongothers.However,countriesqualityassured,disaggregatedandaggregated)informationonfacechallengesonmultiplefrontsinbeingabletomeettheseacontinualbasisrequiressubstantialinstitutionalstrengtheningexpectationsandrequirements.andcapacitybuildingfromgrassrootstoprovincialtosubnationalandnationallevels.Onekeychallengeisthediversityofstandardsandmethodolo-giesthatapply.Differencesofapproachesareevidentinexpecta-Ifcountriesaregoingtobeabletomeetdemandfromprivatetionswithregardtosafeguardscontentandprocess;monitoringsectorbuyers,market-basedstandards,NGOs,andlocalstake-andreporting;andqualityassuranceandcompliancereview.Mul-holdersalikeforhigherqualityunitswithdemonstratedadditionaltipleandoverlappingstandardsatvariouslevels(national,subna-sustainabledevelopmentimpacts,thereneedstobegreaterup-tional,project)oftenapplysimultaneouslyandinparallelratherfrontinvestmentincapacitiestobuildrobustandintegratedsys-thanwithcomplementarity.temstobeabletoeffectivelyimplementinlinewithexpectations,whilealsoallowingforastepwiseapproach.Besidesthisfragmentationofrequirements,theperennialchal-lengesrelatedtosafeguardsimplementationpersist,namely:in-Figure17describesthesocialandenvironmentalsafeguardsandsufficienthumanandfinancialresources;inadequatestakeholdersustainabledevelopmentbenefitsactivitiesthatUNDPwilldeliv-engagement;localelitecapture(ofbenefits,representation,de-eracrossitscarbonmarketsportfolio.FIGURE17:UNDP'sservices:socialandenvironmentalsafeguardsandsustainabledevelopmentbenefitsApplicationofUNDP’sSESandSDGimpacttoolstocarbonprogramsitsupports.Assessandstrengthenlegal,policy,institutionalandgovernancearrangements,inlinewithapplicablestandards.ApplypracticalprogrammingexpertiseonconsultationandFPIC;genderequalityandwomen’sempowerment;socialandenvironmentalriskassessment,managementplanning,monitoringandreporting.EnsurecarbonmarketarrangementsareconsistentwiththerightsofaffectedIndigenousPeoplesandlocalcommunities.Establishdedicatedsystems,procedures,guidelines,rolesandresponsibilitiesforgathering,processing,andreportingonsafeguard-relatedinformationandSDGs,inalignmentwithannualvalidationandverificationbythirdpartiesunderapplicablestandards.Establishdedicatedplatforms,proceduresandguidelinesthatguaranteethemeaningfulengagementofIndigenousPeoples,localcommunities,andotherstakeholdersincarbonmarketactivities.Establishprocessesforthedesignofequitablebenefit-sharingarrangementsinawaythatrecognizesandfurtherincentivizesIndigenousPeoples,localcommunitiesandwomen’scontributiontoemissionsreductions.Establishinstitutionalarrangementandproceduresforreceiving,responding,andreportingongrievancesrelatedtocarbonmarketactivities,alignedwithUNGuidingPrinciplesonBusinessandHumanRights.ProvidededicatedgrantstoIndigenousPeoplesandlocalcommunities,inlinewithself-definedobjectivesrelatedtocarbonmarketreadinessandimplementation.Harmonizeandsimplifythelinkagesbetweenthediversesetsofrequirementsandnationaleffortstoaddresssocialandenvironmentalissues,reducingtheburdenoncountries.Providetrainings,webinars,South-Southlearningexchangesrelatedtoalloftheabove,forgovernments,IndigenousPeoples,localcommunities,womenandotherkeystakeholders.20UNDP’sHigh-IntegrityCarbonMarketsInitiativeInallcountries,IndigenousPeoples,localcommunities,andlocaltatedialogueandengagementinprogram-andjurisdictional-lev-municipalitiesdonothaveadequateresources,accesstoinfor-elplanning.UNDPhasastrongtrackrecordinprovidingsupportmationortechnicalexpertisetoengageeffectivelyeitherdirectlypreciselyalongtheselinesinthecontextofboththeregulatoryinthemarketorinbenefitsharingarrangements.Theseinstitu-andvoluntarycarbonmarket.Dedicatedsupportwillbeprovidedtionsneedresources,andcountries,provincesandmunicipalitiestostrengthenindigenouspeoples’overallengagementincarbonneedprocessessuchasroundtablesorcitizenscouncilstofacili-markets,asoutlinedinFigure18below.FIGURE18:DedicatedservicesforIndigenousPeoplesPolicydialogue⊲Facilitatediscussionswithgovernmentactors(whererequestedbytheconcernedIndigenousPeoples),withtheinvolvementofexperts,ontherelationshipbetweencarboncreditingprojectsandtheneedforpolicies,regulationsandlawsaddressing:FPIC,landtitling,foresttenurerights,landrestitution,carbonrights,theextenttowhichIndigenousPeoples’rightsareaddressedinNDCs,andtherisksofnot,andbenefitsof,addressingtheserights.Assertingrights⊲ProvidesupportforthedevelopmentofindigenousPeoplesautonomousFPICprotocolsandself-determinedlifeplansandprioritiesfortheirfuturesthatcanguidetheirdecision-makinginrelationtocarboncreditingprograms.Facilitatetechnicalandfinancialsupportforlandclaimsprocessesandfortheresolutionofoverlappingclaimsorcontestedborders.⊲Assistcommunitiestostrengthenandformalizetheirgovernancestructures,includingwomen’sinvolvementinthem.⊲BuildIndigenousPeoples’capacitytoconductaspectsofhumanrightsimpactassessmentsofcarboncreditingprogramsthatrelatetotheirsocial,cultural,andspiritualwell-being.⊲EnableaccesstolegalexpertstosupportIndigenousPeoples’assertionsofcarbonrightsinlightoftheircustomarylaws,internationalhumanrightslaw(IHRL),historicalorcontemporarytreatiesandagreements,historicalsovereigntyclaims,andindigenousrightsconsistentwithelementsofnationallaw.Fundmanagement⊲BuildfinancialandtechnicalcapacitiesofIndigenousPeoplestoreceiveandmanagelargefunds.⊲FacilitatetheprovisionoffundstoIndigenousPeoples’representativebodiesatnationalorregionallevelstomanagesmallgrantsforIndigenousPeoplestoequipthemtodevelopself-determinedplans,FPICprotocolsandperformcommunitymapping,tobepreparedfordecision-makinginrelationtoparticipationincarbonmarkets.Informationand⊲Facilitatenational,regional,andinternational“IndigenousPeoplestoIndigenousPeoples”exchangesknowledgeonFPICandcarbonmarketstoenablelearningfromeachother’sexperiencesandstrategizinginrelationsharingtotheirengagementincarbonmarketsand/oralternativenon-marketoptions.⊲IdentifybestpracticeinformationsharingrequirementsinthecontextofseekingFPICforcarboncreditprograms,spanningareasincluding:⊲ModelsofengagementavailabletoIndigenousPeoples(jurisdictional,subnational,centralizedanddecentralizednestedprojects,andstandaloneprojects).⊲Informationontheintegrityofcarboncredits,includingimplicationsofconsiderationssuchaspermanence,baselines,leakage,andadditionalityforIndigenousPeoplesenteringintocarbonmarketagreements.⊲Actorsinthecarbonmarketlandscape,includingcarbonbuyersandtheirresponsibilitytoconductduediligenceinrelationtocarboncreditsthatpotentiallyimpactonindigenouspeoples’rights.⊲TheconsistencyofvariouscarbonstandardswithIHRLonIndigenousPeoples’rights,andwiththeUNDP’sSocialandEnvironmentalStandardsandIndigenousPeoplesSDGindicators(e.g.,thoseestablishedintheIndigenousnavigatororbyspecificpeoplesintheirself-determineddevelopmentplans).⊲Potentialimplicationsofcarboncreditsforrightstolivelihoodsandcultures,land,territoryandresources,self-determinationandtherightsofIndigenouswomenandgirls,andthedeterminationofthesethroughparticipatoryimpactassessmentstoensureconsentisfullyinformed.⊲HowthreatstoforestsareassessedandmeasuredandwhattheimplicationsareforeligibilityforcarboncreditingprogramsforIndigenousPeopleswhohavesuccessfullycontinuouslypreventeddeforestation,andiftherearecarboncreditmodelsorothermechanismsthatwouldenabletheirparticipation.⊲LegalbasisforIndigenousPeoples’claimstocarbonrightsandhowtheserightsarerecognizedinnationallaworcouldbeincorporatedintocontracts.⊲Indigenouscontroloverdatarelatedtotheirterritoriesandimplicationsfordatasovereigntyandprivacyofthird-partyforestmonitoring.⊲Bestpracticeinrelationtonegotiationofbenefitsharingagreementswithinanon-goingframeworkofFPICtocaterforchangingconditionsandoutcomes.21UNDP’sHigh-IntegrityCarbonMarketsInitiative6.WhyUNDP?ThereareseveralfactorsthatplaceUNDPwithacomparativeadvantagetosupportcarbonmarketwork.Figure19illustratesthesereasons.FIGURE19:UNDPcomparativeadvantageoncarbonmarketsGlobalmandatetosupportcountriesinenhancingtheirNDCS,throughtheClimatePromise,supporting120+countries.GlobalmandatetoprovideleadershipinachievingtheSDGs–withdetailedSDGdataandanalyticsformorethan100countries.LeadershipinraisingtheglobalbaronsafeguardsthroughitsSocialandEnvironmentalStandardsPolicy,ProceduresandGuidance–withatrackrecordinestablishingequitablebenefitsharingarrangements,stakeholderengagementplatforms,grievancemechanisms,andpromotinggenderequalityandwomen’sempowerment.Trackrecordoftechnicalassistancetomorethan40jurisdictionsindevelopinghigh-integrityforestcarbonresults-basedfinanceandprograms(thelargestandfastestgrowingsectoroftheVCM).Demonstratedexperienceinsupportingmorethan20hostcountriesonArticle6readiness,andlessonsfromitssupporttotheworld’sfirstprojectsunderArticle6cooperativeapproachesforemissionsreductions.Keyroleinfacilitatingnegotiationsandcontractswithcarbonmarketactors,includingprojectdevelopers,donors,andhostcountries.Commitmenttoahuman-rightsbasedapproachtodelivery,includingensuringinclusivity,gender,transparencyandaccountabilityprinciplesacrossitstechnicalandadvisoryservices.World’slargestandwell-establishedmechanismtodeliveryfundstoIndigenousPeoplesandlocalcommunities,throughitsSmallGrantsProgramme,whichhassubstantialsupporttolocalcommunitiessinceitsestablishmentin1992.Trustedrelationshipswithbothgovernmentandnon-governmentactors,includingIndigenousPeoplesandlocalcommunities.Partnershipswiththeworld’sleadinghighintegrityinitiatives,includingIC-VCMandVCMI.Extensivenetworkofexperts,consultantsandadvisorswhocanbedeployedtosupportcountries,basedondemand.AdditionalguidanceandUNDPpolicies⊲UNDPClimatePromise⊲UNDPSocialandEnvironmentalStandards⊲UNDPSDGImpact⊲UNDPSustainableFinanceHub⊲UNDPClimateandForests22UNDP’sHigh-IntegrityCarbonMarketsInitiative7.NextStepsUNDPwelcomesfeedbackontheInitiativepresentedherein,inparticular,thefocusonhighintegrityandthefouroffers.UNDPisparticularlyinterestedinengagingfurtherwithpartnersseekingtocollaborateorco-createnewpathwaystoachieveoutcomesakintotheonesdescribed.Inthecomingmonths,asUNDPcontinuestoimplementitsexistingcarbonmarketsportfolio,UNDPwillassessdemandfromhostcountries,localstakeholder,andbuyersalikeonwhattheInitiativeproposes,tofurtherhonethefourserviceoffers,theirrolloutandmeansofoperation.©UNDPMalawi©UNDPMarkGarten23UNDP’sHigh-IntegrityCarbonMarketsInitiativeReferencesBostonConsultingGroup,2023.IntheVoluntaryCarbonMarket,BuyersWillPayforQuality.CarbonGrowthPartnersandBloomberg,2023.InvestinginCarbonMarkets:ClearedforTake-Off.EcosystemMarketplace,2023.AllinonClimate:TheRoleofCarbonCreditsinCorporateClimateStrategies.EnvironmentalDefenseFund,2023.CarbonCredits101forInvestors.TroveResearch,2023.PotentialImpactoftheCoreCarbonPrinciplesontheGlobalCarbonCreditMarket.UNDP,2021.High-IntegrityVoluntaryCarbonMarkets(VCM):EmergingIssuesinForestCountries.24UnitedNationsDevelopmentProgramme1UnitedNationsPlaza,NewYork,NY10017www.undp.org©UNDPclimatepromise.undp.org©UNDPClimate
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