Design principles to guide Indo-Pacific Carbon Offsets Scheme

The Indo-Pacific Carbon Offsets Scheme has reached a new milestone by developing 4 draft design principles.

The scheme is an Australian Government strategy to support climate action in the Indo-Pacific. Australia will partner with countries in the region to develop a carbon market that supports emissions reduction projects.

We are co-designing the scheme with partner countries, the private and not-for-profit sectors, and industry stakeholders.

Draft scheme design principles

The Carbon Market Institute hosted the first co-design workshop for the scheme on 19 October. Stakeholder feedback helped us develop the following draft principles to guide the scheme design. The principles will be refined as we keep consulting with our partners.

Transparent and inclusive governance

• The Indo-Pacific Carbon Offsets Scheme is a partnership arrangement between the private and not-for profit sectors, Australian Government, and Indo-Pacific countries hosting projects.
• Governance arrangements must give a voice to peoples and communities impacted by projects and deliver market assurance while respecting countries' sovereignty and acknowledging project host countries' circumstances.

Aligned with the Paris Agreement and Sustainable Development Goals

• The Indo-Pacific Carbon Offsets Scheme will align with Article 6 of the Paris Agreement, including the application of robust accounting to ensure the avoidance of double counting. Projects should endeavour to deliver co-benefits which contribute to Sustainable Development Goals.

Responsibility and cooperation amongst parties

• Partners must support and cooperate with each other through the design of the Indo-Pacific Carbon Offsets Scheme. A partner usually responsible for a sector or activity in a host project country should also have corresponding responsibility under the Indo-Pacific Carbon Offsets Scheme. Partners have a responsibility to participate actively and engage constructively. Scheme design will create opportunities for participation.
• Where possible, the use of existing public and private infrastructure, frameworks and policies should be used to optimise engagement of, and use of, existing knowledge, experience, information and data.

High-integrity units

• Scheme design must recognise the importance of environmental integrity, social and environmental safeguards, and participatory and equitable community benefit-sharing arrangements, for the successful implementation of emissions reduction projects in the region.
• Abatement will be real, measured, reported and independently verified with no advanced or retro-active crediting. Reporting of abatement should be accurate, conservative, and timely.
• The abatement should be permanent with risk assessments and treatments, such as buffers and reversal requirements, safeguards for permanence after crediting periods, and notification of reversals.
• Projects must not already be required by law and must be additional. Leakage should be assessed and treated, monitored and deductions made as appropriate. Indo-Pacific Carbon Offset Scheme units are only issued once and not simultaneously sold to multiple parties (i.e. no fraudulent creations or transactions) with realistic and credible project baselines that are conservative, updated over time and nested within Nationally Determined Contributions.