Lesson 2: The Fundamentals of Carbon Markets

OBJECTIVE & KEY LEARNINGS

The main goal of this training is:

• To provide a summary of key concepts and definitions used by participants in carbon markets.

At the end of the training, participants should be able to:

• Recall the role of carbon pricing and net zero commitments to mitigate climate change.

• Describe the different carbon pricing mechanisms and their contribution in the development of the compliance and voluntary carbon markets.

• Describe the steps, actors, and financial models of project-based crediting mechanisms.

• Summarize the different project types and their corresponding carbon pricing.

DOCUMENT REFERENCE AND CHECKLIST

• For more detailed information on carbon pricing, please visit: https://carbonpricingdashboard.worldbank.org/  
• For access to a harmonized database of carbon dioxide equivalent emissions, please visit: https://edgar.jrc.ec.europa.eu/dataset_ghg70
• Partnership for Market Readiness. 2011. Crediting Mechanisms Overview. Accessed: http://thepmr.org
• Net Zero Tracker. 2023. Net Zero Stocktake 2023: NewClimate Institute, Oxford Net Zero, Energy and Climate Intelligence Unit and Data-Driven EnviroLab.
• Abatable. 2023. The State of the Carbon Developer Ecosystem.
• World Bank, 2022. Carbon Pricing Leadership Report 2021/22. World Bank, Washington, DC.
• World Bank Group. Climate Change. 2023. State and Trends of Carbon Pricing 2023.
• Gold Standard Foundation. Carbon Pricing: What is a Carbon Credit Worth? Accessed: https://www.goldstandard.org/blog-item/carbon-pricing-what-carbon-credit-worth