International carbon market mechanisms in a post-2012 climate change agreement

This background paper provides an overview of the role and profile of international carbon market mechanisms in a new international post-2012 climate change agreement. The paper first reviews the three market-based instruments under the Kyoto Protocol and then examines a range of possible market mechanisms under consideration in the international climate change negotiations. The concluding section discusses critical issues that will need to be considered in choosing and further developing international market mechanisms for a new climate regime.