Abstract

Article 6.4 of the Paris Agreement introduces a baseline-and-crediting mechanism, the so-called sustainable development mechanism (SDM), which allows parties to meet their nationally determined contributions (NDCs). Currently, various options for baseline methodologies are being considered and negotiated as a part of the implementation rules of Article 6.4 of the Paris Agreement for greenhouse gas emission reduction projects. The best available technology (BAT) baseline methodology has been increasingly emphasized as an alternative to historical emission, business-as-usual (BAU), and performance-based baseline methodologies. However, the application of the BAT baseline methodology in the international carbon market remains under-explored. Also, the rise of the BAT baseline methodology had attracted attention to the concept of BAT in environmental policies and practices. Therefore, this paper attempts to examine the meaning of the BAT concept and BAT application in related environmental policies to ultimately explore strategic ways that the BAT baseline methodology can be used under the SDM in an integrated manner amongst related policy fields. First, this paper sets three policy areas where the concepts of BAT are applied, and they are the i) integrated pollution and prevention control policy, ii) cap-and-trade policy in the carbon market, and iii) baseline-and-crediting mechanism in the carbon market. Second, a comparative analysis is carried out on BAT application in three respective policy areas of the European Union (EU) and Korea. Analytical results revealed that the EU has strengthened BAT application in three policy areas based on their inter-linkage and accelerated technology innovation in those areas towards the level of BAT. Korea has also attempted to adopt the BAT approach in these three policy areas, but political measures as well as actual BAT practice are still limited. The policy implications of this study are that Korea needs to plan strategies for the use of BAT baseline methodology under the future SDM and also that the interconnections among BAT-related policies in Korea can enhance the efficiency of their implementation.

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