The overarching goal and vision of this Policy is to set out a structured framework that catalyses cost-effective climate action through a high-integrity, inclusive carbon market that accelerates national decarbonisation goals while delivering sustainable development co-benefits. The guiding principles are common but differentiated responsibility and respective capabilities; just and equitable transition; whole of society and national approach; and integrated and multi-sectoral solutions.
The Policy introduces a National Marginal Abatement Cost Curve, which ranks decarbonisation solutions based on the affordability of abating one tonne of emissions, to assess which types of projects are suitable for international agreements. Low-cost abatement options are prioritised for domestic mitigation, while higher-cost and hard-to-abate measures are most suitable for international cooperation under Article 6. Cost-effective solutions include energy-efficiency improvements, renewable-energy deployment, and waste management measures. Higher-cost abatement options include carbon capture, utilisation and storage (CCUS) and large-scale nature-based solutions.
