Options and Guidance for the Development of Baselines

PMR Technical Note 5, Options and Guidance for the Development of Baselines, is designed to support PMR “Implementing Countries” that are considering the establishment of new mechanisms for climate change mitigation. It may also assist other policy makers and policy analysts involved in mechanism design or review, practitioners developing baseline methodologies, and actors implementing mitigation initiatives whose impact needs to be quantified.
Emissions baselines form the basis for the quantification of the greenhouse gas (GHG) mitigation impact of activities and are thus fundamental to market-based climate policy instruments, as well as to non-market-based ones such as results-based payments. For crediting mechanisms, they set the reference level that is used to determine the quantity of credits that will be awarded for a given mitigation action or effort for the associated emission reductions achieved. For trading mechanisms, baselines can help to establish the emissions target and to distribute emissions allowances to covered entities. For non-market mechanisms, baselines can be used to calculate the emission reductions associated with specific policies and actions and, in the case of results-based finance, as the basis to allocate financial payments.