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Transitioning to a low-carbon economy requires over $8.4 trillion annually for the rest of this decade, but current efforts are insufficient, especially in emerging markets and developing economies (EMDEs). Using a theoretical model of the climate finance gap, we identify key factors needed to close this gap and examine how adjustments in carbon pricing could effectively mobilise the required investment. Our findings highlight the importance of strengthening two core elements: (1) Reframing ‘international carbon markets’ to focus on supporting comprehensive, equitable transitions in EMDEs and fostering large-scale systemic cooperation, and delivering real mitigation impacts. (2) Implementing holistic transition plans and cohesive packages of public, private, and market support to create economic, social, and political environments that enable credible and effective policy implementation, while providing the critical technology and skilled labour needed to make private financial flows more responsive to carbon price signals.

Shifting rapidly to a low-emissions global economy could severely disrupt workers’ livelihoods and their communities, exacerbating inequalities and perpetuating injustice. In a Just Labor Transition, strategic policies prepare workers for new jobs, enable inclusive decision-making with meaningful participation of workers and their representatives (including labor unions and other collective organizations), and secure social license for change.

[...]compliance and voluntary carbon markets are growing worldwide, boosting supply of and demand for carbon credits from protecting, managing, and restoring forests. Market design, regulatory, governance, and implementation issues all need to be resolved to scale forest carbon credits as an efficient policy tool with high environmental integrity, which drives down net greenhouse gas emissions, enhances broad climate mitigation ambition, and fosters equitable and sustainable economic development. Haya et al. take stock of the current literature on the principal quality attributes a carbon crediting methodology for improved forest management should aspire to, discuss how main project-based forest carbon crediting methodologies fare relative to recommendations from academic research, and suggest pathways for improvements. Areas where further academic research on forest carbon credits could inform improved policymaking include the setting of crediting baselines; duration-related concepts—risks of emissions reversals and appropriate scales for buffer pools or pricing of insurance against reversals; innovative ways to address duration and leakage; quantification methods for forest carbon stocks and fluxes and carbon content in wood-based products; measurement of forest-related scope 3 emissions in supply chains; transaction costs and ways to minimize them; and disentangling the effects of natural and human disturbances on forests.

The forestry sector has a crucial role to play in mitigating climate change. Given the share of global emissions covered by emissions trading is expected to rise, there is a need to understand how emissions trading might drive behavior change in the forestry sector. To explore this, we analyze the New Zealand Emissions Trading Scheme (NZ ETS) − the only system in the world with symmetrical incentives that reward forest owners who afforest and make liable those who deforest. In theory, these incentives should drive net carbon dioxide removals in the forestry sector, but the sectoral response has proven complex. We evaluate the NZ ETS policies that directly affect forestry and the sectoral response to these policies by analyzing trends in deforestation, afforestation, and participation over 2008 to 2022. Our findings indicate that the forestry sector, and the NZ ETS participants within it, have responded rationally to emissions pricing over time. However, multiple factors such as complex participation requirements, extended periods of policy uncertainty, and weak emissions price signals (particularly over 2011–2016) have likely restricted the effectiveness of the NZ ETS in changing forestry outcomes over much of its operating life. The Climate Change Response (Emissions Trading Reform) Amendment Act, 2020 reformed forestry and other provisions in the NZ ETS to address demonstrated shortcomings, improve policy predictability, and incentivize more ambitious mitigation action in line with Aotearoa New Zealand’s targets. However, the signaling of further changes to NZ ETS forestry policy in 2022 has created new uncertainty for market participants. Despite past challenges, the sector’s dramatic response to rising emissions prices in recent years demonstrates the NZ ETS is changing landowner behavior to produce net forestry removals. The NZ ETS remains a unique and strong model from which other nations can gain insights in how to design and operate emissions trading systems to harness mitigation potential from the forestry sector and help meet their emission reduction targets.

Land use is central to addressing sustainability issues, including biodiversity conservation, climate change, food security, poverty alleviation, and sustainable energy. In this paper, we synthesize knowledge accumulated in land system science, the integrated study of terrestrial social-ecological systems, into 10 hard truths that have strong, general, empirical support. These facts help to explain the challenges of achieving sustainability in land use and thus also point toward solutions. The 10 facts are as follows: 1) Meanings and values of land are socially constructed and contested; 2) land systems exhibit complex behaviors with abrupt, hard-to-predict changes; 3) irreversible changes and path dependence are common features of land systems; 4) some land uses have a small footprint but very large impacts; 5) drivers and impacts of land-use change are globally interconnected and spill over to distant locations; 6) humanity lives on a used planet where all land provides benefits to societies; 7) land-use change usually entails trade-offs between different benefits—“win–wins” are thus rare; 8) land tenure and land-use claims are often unclear, overlapping, and contested; 9) the benefits and burdens from land are unequally distributed; and 10) land users have multiple, sometimes conflicting, ideas of what social and environmental justice entails. The facts have implications for governance, but do not provide fixed answers. Instead they constitute a set of core principles which can guide scientists, policy makers, and practitioners toward meeting sustainability challenges in land use.

There are many choices within the design of an emissions trading system. In this paper we focus on one specific aspect — the point of regulation for the energy sector. This choice affects transaction costs; comprehensiveness, and hence the amount of emissions covered and the extent to which the potential cost-effectiveness gains are realised; and credibility of the system. We discuss how an 'upstream' energy sector emissions trading system works and present arguments for going upstream (in particular, simplicity of administration) while also discussing arguments for other points of regulation in the light of Chinese circumstances. We further present experiences with the New Zealand system, the only system that is entirely upstream for energy, showing ways to address issues that may arise with an upstream system. Ultimately the success of emissions trading depends on flexible markets that operate in a relatively free and competitive way. Simply copying others' systems in the context of a largely controlled economy such as the Chinese one is likely to be ineffective; each system must be uniquely tailored to local circumstances, possibly in China more than ever before.

Theory suggests that economic instruments, such as pollution taxes or tradable permits, can provide more efficient technology adoption incentives than conventional regulatory standards. We explore this issue for an important industry undergoing dramatic decreases in allowed pollution - the U.S. petroleum industry's phasedown of lead in gasoline. Using a duration model applied to a panel of refineries from 1971-1995, we find that the pattern of technology adoption is consistent with an economic response to market incentives, plant characteristics, and alternative policies. Importantly, evidence suggests that the tradable permit system used during the phasedown provided incentives for more efficient technology adoption decisions.

Without effective developing country (DC) participation in climate mitigation, it will be impossible to meet global concentration and climate change targets. However, DCS are unwilling and, in many cases, unable to bear the mitigation cost alone. They need huge transfers of resources — financial, knowledge, technology and capability — from industrialized countries (ICs). In this paper, we evaluate instruments that can induce such resource transfers, including tradable credits, mitigation funds and results-based agreements. We identify key constraints that affect the efficiency and political potential of different instruments, including two-sided private information leading to adverse selection; moral hazard and challenging negotiations; incomplete contracts leading to under-investment; and high levels of uncertainty about emissions paths and mitigation potential. We consider evidence on the poor performance of current approaches to funding DC mitigation — primarily purchasing offsets through the Clean Development Mechanism — and explore to what extent other approaches can address problems with offsets. We emphasize the wide spectrum of situations in DCS and suggest that solutions also need to be differentiated and that no one policy will suffice: some policies will be complements, while others are substitutes. We conclude by identifying research needs and proposing a straw man to broaden the range of \"contracting\" options considered.

In New Zealand, climate change impacts have already been observed, and will increase in future decades. Average air temperature is predicted to warm by 2.1°C by 2090 for a mid-range IPCC scenario (A1B), with larger increases possible for some IPCC scenarios with higher rates of future emissions. Sea-level rise projections range between 0.18 – 0.59 m by 2100, based on six IPCC future emission scenarios excluding future rapid dynamical changes in polar ice-sheet flow. Global surface ocean pH is predicted to decrease by an additional 0.14 – 0.35 units by 2100, with a similar decrease expected in New Zealand waters. Rainfall is predicted to change significantly, with increased precipitation in the west, and reduced precipitation in the east, and more intense rainfall events. Increasing temperature is likely to result in species’ range shifts southward and upward, and mortality during extreme heat events. Ocean acidification is expected to cause declines in carbonate communities, with cold water communities predicted to decline first due to a lower aragonite saturation horizon in cold waters. Sea-level rise is likely to impact on coastal biota, reducing coastal habitats, changing inundation patterns, and increasing vulnerability to storm surges and tides. Changes in storm and rainfall intensity are predicted to increase disturbance to terrestrial and aquatic communities. Areas with increased precipitation will amplify rates of disturbance, erosion and sedimentation into aquatic, estuarine and coastal ecosystems, while areas with low precipitation will experience increased fire risk. In New Zealand, climate change projections are being integrated into management, including increasing protection and improving management of coastal habitats. Contributing to a global reduction in greenhouse gas emissions, New Zealand is the first country to include forestry in their Emissions Trading Scheme, already positively affecting biodiversity by reducing deforestation.