- The Project Developer Forum (PD Forum), which represents the collective interests of companies developing greenhouse gas emission reduction projects in international markets, has carried out new analysis that raises important questions about the balance between environmental integrity and project viability in the emerging Paris Agreement Crediting Mechanism (PACM).
PD Forum’s technical analysis of an improved cookstove project, an example of a crucial climate finance initiative in developing countries, reveals that PACM’s conservative baseline requirements could reduce credit volumes by approximately 27% compared to already conservative market practices.
Link to the case study analysis: 2025-10-03 Annex 1 PDF Case Study
While PD Forum fully supports the principle that a science-based conservative approach is essential for environmental integrity, this research suggests potential over-correction may undermine the mechanism’s goals of encouraging broad participation, particularly among small businesses in least developed countries.
Key findings include:
- PACM adjustments applied to already conservative methodologies may deliver limited additional integrity benefits while significantly impacting project economics
- The cumulative effect of multiple conservative adjustments requires careful assessment to avoid over-correction.
- Balance needed between scientific rigour and practical implementation, especially for projects serving vulnerable communities.
This analysis represents the first in a planned series examining PACM’s real-world implications. A letter to PACM’s governing bodies, which is co-signed by the International Emissions Trading Authority (IETA), outlines PD Forum’s technical findings and constructive recommendations for ensuring carbon markets can effectively mobilise climate finance while maintaining environmental integrity.
Link to the letter here: 2025-10-03 PDF Letter to PACM SB
Crucially, both PD Forum and IETA are calling for more structured stakeholder engagement—offering extensive field and policy experience to support robust standard development that works in practice.
Given the critical role of carbon markets in financing climate action in the Global South, these findings have significant implications for both climate policy and development finance. PD Forum and IETA believe this merits wider discussion as international carbon market frameworks take shape.
Author: Bryan Groenendaal
