Sectoral crediting, sometimes referred to as 'sectoral no-lose target', works on the premise of installations emitting less GHG emissions than a so -called baseline. The sectoral baseline is a negotiated target which lies below the business-as-usual scenario for a specific region and sector. This allows government to distribute credit to industries that achieve a reduction of emissions levels below the baseline. The following two criteria are important design features of sectoral crediting:
1) The carbon units are issued at the end of the period; and
2) There is no obligation on the government to purchase carbon units from elsewhere if it did not achieve its baseline
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