{"id":38853,"date":"2026-03-05T17:15:43","date_gmt":"2026-03-05T16:15:43","guid":{"rendered":"https:\/\/www.co2news.sk\/?p=38853"},"modified":"2026-03-05T17:17:39","modified_gmt":"2026-03-05T16:17:39","slug":"overview-of-actors-in-the-carbon-market-system-who-is-who","status":"publish","type":"post","link":"https:\/\/www.co2news.sk\/en\/2026\/03\/05\/overview-of-actors-in-the-carbon-market-system-who-is-who\/","title":{"rendered":"Overview of actors in the carbon market system: Who is who?"},"content":{"rendered":"

The evolution of global climate policy represents a fundamental shift in how the international community approaches responsibility for emissions. The original Kyoto Protocol<\/b> stood for a "top-down" approach, where goals were directively assigned only to industrially advanced countries. The current Paris Agreement<\/b> However, it has introduced a "bottom-up" architecture that activates all actors and makes the system more inclusive, but also more complex.<\/p>\n\n\n\n\n\n\n\n
Characteristics<\/td>\nKyoto Protocol (Top-down)<\/td>\nParis Agreement (Bottom-up)<\/td>\n<\/tr>\n
Country participation<\/b><\/td>\nIndustrialized countries only (Annex I)<\/td>\nAll Parties (developed and developing)<\/td>\n<\/tr>\n
Responsibility<\/b><\/td>\nInternationally assigned goals<\/td>\nNationally Determined Contributions (NDC)<\/td>\n<\/tr>\n
Compliance mechanism<\/b><\/td>\nStrict enforcement for Annex I countries<\/td>\nTransparency, peer review and cycle of ambition<\/b><\/td>\n<\/tr>\n
Access to markets<\/b><\/td>\nLimited participation of developing countries<\/td>\nBroad cooperation through Article 6 (both bilateral and plurilateral)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Key insight for the student:<\/b> Nationally determined contributions (NDC<\/b>) are the \u201ebackbone\u201c of the Paris Agreement. These are countries\u2019 own climate plans that, combined with long-term low-emission development strategies (LT-LEDS<\/b>) define the path to the 1.5\u00b0C target.<\/p>\n

This policy framework creates a dynamic environment for various actors who translate policy commitments into real market practice.<\/p>\n

\n

Market Dynamics: Who Creates Supply and Demand?<\/strong><\/p>\n

The carbon market functions as a global ecosystem for the exchange of climate change mitigation results. We divide the actors into two main parties based on their function:<\/p>\n

    \n
  • Supply-side:<\/b>\n
      \n
    • Entities:<\/b> Governments, project developers, businesses, non-governmental organizations (NGOs), indigenous peoples and local communities.<\/li>\n
    • Goal:<\/b> Design and implement activities that actually reduce emissions or remove carbon from the atmosphere.<\/li>\n<\/ul>\n<\/li>\n
    • Demand-side:<\/b>\n
        \n
      • Entities:<\/b> Investors, corporations and individuals.<\/li>\n
      • Goal:<\/b> Finance projects by purchasing credits to achieve Net-zero goals, offset footprints, or meet NDC commitments.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n

        \u201e"So what?" moment:<\/b> It is the interaction between these two parties that makes it possible transfer of mitigation results<\/b> across borders. This relationship is a driving force for global mitigation because it moves capital to where emission reductions are most effective.<\/p>\n

        However, the effective functioning of this relationship is conditional on strict supervision by independent institutions.<\/p>\n

        \n

        Supply side: Climate solution makers<\/strong><\/p>\n

        These actors generate the "goods" that are traded on the market:<\/p>\n

          \n
        • Host Country:<\/b> The country where the project is being implemented. Managed by national register<\/b> and has the sovereign right to decide whether to keep the mitigation result for its own NDC or authorize its sale abroad.<\/li>\n
        • Project developers and companies:<\/b> Entities responsible for technical and financial implementation (e.g. RES technologies or forest protection).<\/li>\n
        • Non-governmental organizations (NGOs):<\/b> They often act as expert guarantors and facilitators, connecting communities to international standards.<\/li>\n
        • Indigenous Peoples and Local Communities (IP & LC):<\/b> Their role is crucial for social integrity<\/b>. They are the primary guardians of natural ecosystems, and their informed and meaningful involvement is a prerequisite for the sustainability of projects.<\/li>\n<\/ul>\n

          Key insight for the student:<\/b> The host country is the \u201egatekeeper.\u201c Without its authorization, emission reductions cannot become an internationally tradable outcome (ITMO).<\/p>\n

          However, the capital for these solutions comes from the demand side, which seeks integrity and efficiency.<\/p>\n

          \n

          Demand side: Drivers of investment<\/strong><\/p>\n

          Buyers in the market are not monolithic; their motivations determine the quality of demand.<\/p>\n\n\n\n\n\n\n
          Demand actor<\/td>\nPrimary target market<\/td>\n<\/tr>\n
          Investors<\/b><\/td>\nFinancial returns associated with financing climate solutions.<\/td>\n<\/tr>\n
          Corporations<\/b><\/td>\nAchieving voluntary Net-zero goals and reducing carbon footprint.<\/td>\n<\/tr>\n
          Governments (buyers)<\/b><\/td>\nComplementing domestic efforts to purchase ITMOs to meet our own NDCs.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

          Synthesis: 3 most important benefits of the demand side:<\/b><\/p>\n

            \n
          1. Scaling high-integrity activities:<\/b> Providing the volume of resources needed to expand proven solutions globally.<\/li>\n
          2. Ensuring fair outcomes:<\/b> The demand for quality credit is pushing for finance to be directed towards projects that bring real benefits to people and nature.<\/li>\n
          3. Mobilizing capital for innovation:<\/b> Financing technologies and practices that would not be economically viable without carbon revenues.<\/li>\n<\/ol>\n

            Buyer confidence in the market is directly proportional to the quality of institutional oversight.<\/p>\n

            \n

            Guarantor of quality and integrity: Institutions in the background<\/strong><\/p>\n

            These entities do not regulate the market directly as traders, but define its boundaries as "guardians".<\/p>\n

              \n
            1. Standard-setters:<\/b> They define rules and methodologies (e.g. how to measure carbon leakage or the permanence of sequestration).<\/li>\n
            2. Rating agencies:<\/b> They independently assess the riskiness of projects, thereby increasing transparency for investors.<\/li>\n
            3. Verification and approval bodies (VVB):<\/b> External auditors who confirm that the declared reduction actually occurred in the field or is supported by data<\/b>.<\/li>\n
            4. Integrity initiatives:<\/b> Organizations setting the global bar for "high integrity.".<\/li>\n<\/ol>\n

              Key insight for the student:<\/b> According to the UNDP Toolkit, High-integrity<\/b> starts at social integrity<\/b>. This means that a project is not only of high quality if the "carbon math" is correct, but above all if it respects the rights of indigenous peoples and local communities.<\/p>\n

              \n

              The role of governments and governance under Article 6<\/strong><\/p>\n

              Article 6 of the Paris Agreement is key to international cooperation and includes three different approaches:<\/p>\n

                \n
              • Article 6.2 (Decentralized approach):<\/b> Governments cooperate directly at the bilateral or plurilateral level. The exchange is ITMOs<\/b> (Internationally transferred mitigation results).<\/li>\n
              • Article 6.4 (Centralized access):<\/b> It operates under the supervision of an international Supervisory Body<\/b>. Here an important technical division of units arises:\n
                  \n
                • A6.4 AER (Authorized Emission Reductions):<\/b> Authorized units that become ITMOs and can be used on another country's NDC.<\/li>\n
                • Mitigation Contribution units:<\/b> Unauthorized units that contribute to mitigation in the host country and cannot be used as ITMOs.<\/li>\n<\/ul>\n<\/li>\n
                • Article 6.8 (Non-market approaches):<\/b> It focuses on cooperation outside of direct credit trade, managed Glasgow Committee<\/b>.<\/li>\n<\/ul>\n

                  Key responsibilities of the host country:<\/b> The host country must authorize the transfer of mitigation results, keep accurate records in a national registry, and apply so-called "corresponding adjustments" to prevent double counting of the same emission reduction by two countries.<\/p>\n

                  This entire complex system is directed towards a single goal: the creation of \u201e"ambition cycle"\u201c<\/b>. Collaboration between governments, the private sector and communities enables countries to not only meet current NDCs and LT-LEDS, but also, thanks to market efficiency, to continuously increase these targets at regular five-year intervals. JRi&CO2AI<\/strong><\/em><\/p>","protected":false},"excerpt":{"rendered":"

                  Evol\u00facia glob\u00e1lnej klimatickej politiky predstavuje z\u00e1sadn\u00fd posun v tom, ako medzin\u00e1rodn\u00e9 spolo\u010denstvo pristupuje k zodpovednosti za emisie. P\u00f4vodn\u00fd Kj\u00f3tsky protokol st\u00e1l na pr\u00edstupe \u201ezhora-nadol\u201c, kde boli ciele direkt\u00edvne pridelen\u00e9 len priemyselne vyspel\u00fdm<\/p>","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[26],"tags":[],"class_list":["post-38853","post","type-post","status-publish","format-standard","hentry","category-uhlikove-kredity"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/posts\/38853","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/comments?post=38853"}],"version-history":[{"count":4,"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/posts\/38853\/revisions"}],"predecessor-version":[{"id":38857,"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/posts\/38853\/revisions\/38857"}],"wp:attachment":[{"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/media?parent=38853"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/categories?post=38853"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/tags?post=38853"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}