Option B (paragraphs 5-59):
A. General provisions
5. [In adherence to the Bali Action Plan mandate and recognizing that existing market mechanisms exist under the Kyoto Protocol, there is no need to develop new mechanisms.] [Parties [shall][should] cooperate to enhance the cost-effectiveness of, and to promote, mitigation actions through the use of market-based approaches that engage private-sector participation and promote the flow of funding to developing country Parties to catalyze mitigation actions, with a view to establishing a global carbon market through the progressive implementation of instruments based on the following market-based approaches:
(a) [Existing mechanisms under the Kyoto Protocol, namely, joint implementation (JI), the clean development mechanism (CDM) and international emissions trading;]
(b) [New mechanisms established hereunder.]]
6. Market-based approaches shall ensure:
(a) Participation by Parties on a voluntary basis;
(b) Additionality of mitigation actions;
(c) A net global mitigation benefit;
(d) Environmental integrity and accountability;
(e) Incentives for investment and technology transfer;
(f) Fair and equitable distribution of activities across regions;
(g) Upfront financing;
(h) Promotion of co-benefits;
(i) Technology neutrality;
(j) Simplicity of administration and implementation;
(k) That mitigation actions are country-driven.
7. New market mechanisms shall complement other means of support for implementation for nationally appropriate mitigation actions (NAMAs) by developing country Parties.
Eligibility criteria
8. Developed country Parties [including those which are not Parties to the Kyoto Protocol] may [participate in existing and new mechanisms] [trade units with Parties to the Kyoto Protocol] subject to:
(a) [The submission of the most recently required national inventory] [The measurement, reporting and verification of emissions by sources and removals by sinks];
(b) [The establishment of assigned amount pursuant to a binding national cap for [developed country] [Annex I] Parties] [The issuance of units];
(c) [The approval of the system of trading with Parties to the Kyoto Protocol by the Conference of the Parties serving as the meeting of the Parties (CMP) to the Kyoto Protocol;]
(d) No units generated by reducing emissions from deforestation and forest degradation being used or converted into other units;
(e) Further criteria as may be defined by the [supreme body].
9. [[Developing country Parties] [Economically more advanced developing country Parties] [Developing country Parties that undertake tier III NAMAs] may [participate in [NAMA] [sectoral] mechanisms] [participate in existing and new mechanisms] [trade units with Parties to the Kyoto Protocol] subject to:
(a) The establishment of a [national] system for the estimation of anthropogenic emissions by sources and removals by sinks of all greenhouse gases not controlled by the Montreal Protocol, in accordance with guidelines to be adopted;
(b) [The submission of the most recently required national inventory] [The measurement, reporting and verification of emissions by sources and removals by sinks];
(c) The establishment of a national registry;
(d) The [issuance of units];
(e) [The approval of the system of trading with Parties to the Kyoto Protocol by the CMP to the Kyoto Protocol;]
(f) [No units generated by reducing emissions from deforestation and forest degradation being used or converted into other units;]
(g) Further criteria as may be defined by the [supreme body].]
