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A Framework for Various Approaches under the UNFCCC Necessity or luxury?
The Framework for Various Approaches (FVA) under the UNFCCC will only cover mitigation actions, which produce units that are used for compliance with international obligations by a jurisdiction other than the one where they were created, or issued. These Approaches can be market- or non-market-based.
The FVA will be needed not only to create a liquid global carbon market, but also to allow some of the emerging national carbon markets to function properly. Many national carbon markets will find it challenging to be liquid on their own, and a market without liquidity will be dysfunctional, and give wrong price signals. The FVA is therefore not a luxury, but a necessity.