Transformative Carbon Asset Facility

 

TCAF is an international finance facility piloting innovative, results-based carbon market mechanism under Article 6 of the Paris Climate Change Agreement. TCAF supports developing countries in planning, implementing, and scaling up their Nationally Determined Contributions (NDCs) to accelerate the transition to low-carbon economies. As well, TCAF helps shape international carbon markets for the post-Kyoto era.

 

TCAF at a glance

 

 

 

TCAF's purpose

 

Domestically: supporting mitigation ambitions in developing countries

 

TCAF is an innovative facility that supports ambitious energy programs in developing countries. Larger programs create larger momentum for sustainable development and social transformation. Mobilizing international climate finance, TCAF supports middle-income countries in scaling up their climate commitments and accelerating meaningful socio-economic growth. Working with national policy makers, TCAF helps shape domestic environmental, energy, and climate change policy to reach meaningful scale and create a lasting, transformative social impact.

Helping developing countries implement market-based carbon pricing and sector-wide mitigation measures.

Leveraging public finance to create favorable conditions for private sector investment in low-carbon technologies, provide blueprints for efficient and low-cost mitigation, and achieve lasting transformational impact

 

 Internationally: helping shape international carbon markets post-Kyoto 

 

TCAF’s efforts will inform the international process established in Paris to develop standards and agreements for future carbon crediting instruments and transfer of mitigation assets.TCAF will test various methods to transparently transfer “mitigation outcomes” between parties and to provide stringent accounting and transparency, ensuring the environmental integrity of the assets.

 

How TCAF achieves results

 

  • TCAF develops innovative carbon accounting methodologies to attribute emission reductions of policies and economy/sector-wide programs, going beyond project-based mitigation activities;
  • TCAF supports mechanisms that account for carbon credits from different carbon pricing schemes. It allows countries to implement more ambitious carbon pricing instruments and supports flexibility in market-based climate mitigation.

  • Through its programs, TCAF generates carbon assets (or carbon credits) that have strong environmental integrity and are likely to be compliant with a future international regime. This is achieved by using conservative baselines and stringent monitoring and accounting practices;

  • TCAF buys a portion of the carbon assets generated by the programs. The remaining carbon mitigation outcomes can be used by the host country towards achieving the NDC targets. Contributors to the TCAF may use the acquired assets for their own compliance, to contribute towards their climate finance objectives (i.e. through cancellation),or allow the host country to use them towards their NDC targets.