Two projects can both reduce emissions, but that doesn\u2019t mean the ITMOs associated with them will have the same value.<\/p>\n\n\n\n
The project may be different. The country may be different. The cost of achieving the emissions reduction may be different. And buyers may be looking for different things.<\/p>\n\n\n\n
There isn\u2019t a single formula that sets the value of an ITMO. Several factors can influence what a buyer is prepared to pay.<\/p>\n\n\n\n
\u2022 The project<\/strong> Two projects can both reduce emissions, but that doesn\u2019t mean the ITMOs associated with them will have the same value. The project may be different. The country may be different. The cost of achieving the emissions reduction may be different. And buyers may be looking for different things. There isn\u2019t a single formula that sets […]<\/p>\n","protected":false},"author":1,"featured_media":33867,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[272,254,289],"tags":[],"class_list":["post-33866","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-350-ppm","category-clients","category-itmo"],"yoast_head":"\n
What is actually creating the emissions reduction? Renewable energy, agriculture, forestry and other activities have different costs, technologies and ways of reducing emissions.
\u2022 The mitigation outcome<\/strong>
What emissions are being reduced, how much is being reduced, and how is the reduction measured and accounted for? The mitigation outcome also needs to meet the relevant requirements for international transfer under Article 6.
\u2022 The country<\/strong>
The country where the activity takes place matters. Its NDC, national policies and approach to Article 6 form part of the framework within which the mitigation outcome can be authorised and transferred.
\u2022 The authorisation<\/strong>
An emissions reduction does not automatically become an ITMO. The host country needs to authorise the international transfer, and the scope of that authorisation matters.
\u2022 The buyer<\/strong>
Different buyers have different requirements and different reasons for acquiring ITMOs. What one buyer is prepared to pay may not be the same as another.
\u2022 The economics<\/strong>
The cost of creating the emissions reduction matters too. A mitigation activity that is expensive to deliver has different economics from one that can achieve the same reduction at a lower cost.
These factors don\u2019t give us a fixed formula for the value of an ITMO.
They help explain why one ITMO may be more attractive to a buyer than another.
And that\u2019s important for investors.
You\u2019re not simply looking at an emissions reduction. You\u2019re looking at the project, the framework around it and the market for the resulting ITMOs.
Next: Who pays for emissions reductions?<\/p>\n","protected":false},"excerpt":{"rendered":"