Free allocation in the Phase IV of the EU ETS: I4CE contributed to the meeting of experts organized by DG Clima in April 2016

Climate negotiations are taking place next week in Bonn, with finance once again high on the agenda. COP 29 ended last year with a New Collective Quantified Goal (NCQG) –revised climate finance target to replace the USD 100 billion goal. The NCQG decision put forward a commitment by developed countries to lead in providing USD 300 billion per year by 2035 for developing countries, as well as a proposal to work on a roadmap to scale up climate finance for developing countries to reach a level closer to the estimated needs –the ‘Baku to Belem Roadmap to 1.3T’ (USD 1.3 trillion). The latter must be delivered at the end of the year at COP 30, and strong efforts are being put in the task by the Brazilian Presidency.

Six years after its inception, this study aims to review this mechanism and its projects: what activities are being implemented in the field, what impact are they having on the climate, with what robustness or, on the contrary, what limitations in terms of measurement, environmental integrity, accessibility, etc.? This exercise is also intended to feed into the process of continuous improvement of the scheme and to provide feedback for the current implementation of the European carbon certification framework (Carbon removals and carbon farming: CRCF).

This 2025 edition of the Global Carbon Accounts presents a landscape of carbon pricing instruments through the lens of their current and potential contribution to scale up climate and development finance. Several jurisdictions are already using carbon revenues to support a range of policy objectives, including decarbonization efforts and support for economic actors most affected by the transition. Yet there is still potential for them to further contribute to fill the gap.