Project description

The report provides a critical analysis of the concept of opportunity cost in the context of Article 6 (as opposed to principles such as OMGE, SOP, limited crediting periods, conservative baselines, environmental integrity, sustainable development, etc.) to inform SEA decision-making around host country compensation. It addresses key issues such as the approaches that other relevant actors have taken in relation to opportunity cost and resulting compensation, the principles and arguments that both buyer and host countries can take into account when assessing opportunity cost and compensation, the approach to host country compensation in practice, the models that could be used to estimate appropriate compensation/pricing, simplifications for the total cost of ITMOS, among others.