Session 1A presentation from the 8th Strategic Dialogue of the Carbon Market Platform, 23-24 October 2023

1. G7 Presidency on
Principles of High Integrity Carbon Markets
Government of Japan
Takayuki SHIGEMATSU
Office of Director for International Cooperation for
Transition to Decarbonization and Sustainable Infrastructure
2023 8th Strategic Dialogue of the Carbon Market Platform
Session1A: the G7 Principles & CMP Analysis

2. 2
Background –Discussion on High Integrity Carbon Markets at G7
2021 UK Presidency
 G7 Climate and Environment Ministers’ Meeting Communiqué
24. We affirm the fundamental importance of environmental integrity and sustainable
development in the design of high integrity carbon market mechanisms, including those
used for voluntary purposes, which should be based on robust rules and accounting that
ensure avoidance of all forms of double counting.
2022 German Presidency
 G7 Climate, Energy and Environmental Ministers’ Communique
59. We reaffirm the fundamental importance of environmental integrity and sustainable
development in the design of high integrity carbon market mechanisms…
 G7 Finance Ministers and Central Bank Governors Statement on Climate Issues
5. We reaffirm the potential of high integrity carbon markets and carbon pricing to foster
cost‐efficient reductions in emission levels, drive innovation and enable a transformation
to net zero, through the optimal use of a range of policy levers to price carbon.

3. 3
 We underscore the role that high integrity carbon markets can play in achieving net‐zero
emissions by 2050, in enhancing the implementation and ambition of 2030 NDCs, including
beyond their current levels.
 The implementation of Article 6 guidance and rules provides a robust framework for carbon
markets under the Paris Agreement to ensure environmental integrity and promote sustainable
development.
 In order to promote the development of carbon markets while ensuring their environmental
integrity, we adopt the “Principles of High Integrity Carbon Markets”, and will facilitate their
implementation in carbon credit markets, including by sharing experiences through discussions of
the Carbon Market Platform.
 We will collaborate to promote international coordination among various initiatives related to
capacity building, including through the “Paris Agreement Article 6 Implementation
Partnership”.
 For providing sustained activities at the Partnership, we welcome Japan’s initiative to establish
the “Article 6 Implementation Partnership Center”, in this regard as a secretariat for the
Partnership in supporting capacity building towards implementing Article 6 of the Paris
Agreement.
2023 G7 Sapporo Communique
Para57. Carbon Markets and Ariticle 6 of the Paris Agreement
G7 Climate, Energy and Environment Ministers’ Communiqué adopted on April 16, 2023

4. 4
Communiqué Annex and related initiatives
Communiqué annex
Relevant initiatives
The G7 Alliance on
Nature Positive
Economy
Circular Economy
and Resource
Efficiency
Principles (CEREP)
Conclusions
regarding the
Industrial
Decarbonization
Agenda
Principles of High
Integrity Carbon
Markets
Five‐Point Plan for
Critical Minerals
Security
G7 Roundtable on
Subnational
Climate Actions
G7 Inventory on
Climate Disaster
Risk Reduction,
Response and
Recovery
The G7
Workshop on
Invasive Alien
Species
Article 6
Implementation
Partnership
Center
Workshops on
CCU/carbon
recycling
technologies
G7 platform for
net‐zero and well‐
being in life

5. 5
Principles of High Integrity Carbon Markets
1. Overall message
• The ambitious climate goals can be advanced by supporting GHGs mitigation actions that generate
high integrity carbon credits.
• High integrity carbon credit markets need to be consistent with a pathway toward overall net‐zero
emissions.
• We acknowledge the vital contributions of organizations and initiatives advancing principles such as
these to amplify environmental integrity in the creation and use of carbon credits, whether for
voluntary or compliance purposes.
• We will strive to promote these principles where appropriate in the development of carbon credit
markets.
2. Components of the Principles
The principles apply to strategies and standards guiding their supply, demand, and market infrastructure to
improve credibility, transparency, and overall confidence in the markets.
• Supply‐side integrity
• Demand‐side integrity
• Market integrity
*Principles of High Integrity Carbon Markets: https://www.env.go.jp/content/000128283.pdf

6. 6
Principles of High Integrity Carbon Markets
3. Summary of “Principles of High Integrity Carbon Markets”
I. Supply‐side Integrity
• A robust certification standard for activity design and MRV of emission reductions or
removals:
- Crediting levels: consistency with the 1.5℃ goal of the Paris Agreement and global net‐
zero emissions by 2050.
- Underlying activities and condition: contribution to host country mitigation, avoidance of
lock‐in of high emission pathways, mitigation strategies in place with an emphasis on
direct mitigation action.
- Alignment with international requirements: Article 6 rulebook, the CORSIA emissions
units criteria and guidelines
- Governance: robustness, transparency, public accountability, and long‐term
administration.
- Sustainable development: disclosure of objectives and resulting benefits.
‐ Safeguard: Appropriate measures are in place to address environmental and social
impacts (including respect for human rights, gender equality, and the rights of Indigenous
Peoples).

7. 7
Principles of High Integrity Carbon Markets
3. Summary of “Principles of High Integrity Carbon Markets”(Cont.)
II. Demand‐side Integrity
• Prerequisites: alignment with the 1.5℃ goal and global net‐zero emissions by 2050, use for
unavoidable emissions, science‐based strategies and targets in place with priority on direct
mitigation action.
• International mitigation purposes: for NDCs and other international mitigation purposes,
use credits authorized according to the Article 6.2 rules.
• Disclosure: publicly disclose the information (types, sources, and quantities) for public
accountability and encourage investments in mitigation actions such as beyond the value
chain.

8. 8
Principles of High Integrity Carbon Markets
3. Summary of “Principles of High Integrity Carbon Markets”(Cont.)
III. Market Integrity
• Tracking credits: registries publicly track information necessary for compliance and
voluntary carbon market integrity (market eligibility, the status of authorization and
corresponding adjustments, and the purpose of use).
• Disclosure beyond credit usage: scope 1‐3 emissions and associated targets, and strategies
and annual progress for enhancing integrity and appropriate signaling between supply‐ and
demand‐side participants.
• Cooperation: reduction of market fragmentation and promotion of a uniform shift to high
integrity.