From credits to coherence: Applying the policy coherence approach to prevent problem‐shifting in the Paris Agreement Crediting Mechanism

Abstract Carbon crediting mechanisms can deliver cost‐effective climate mitigation but risk ‘problem‐shifting’ by worsening environmental harms such as biodiversity loss and water pollution. This article assesses whether the Paris Agreement Crediting Mechanism (PACM) is better equipped than the Clean Development Mechanism (CDM) to prevent such trade‐offs. Drawing on policy coherence approaches developed by international institutions, it evaluates the PACM's legal framework, including its Sustainable Development (SD) Tool, Activity Standard, Validation and Verification Standard and Appeal and Grievance Processes, to determine the sufficiency of its safeguards. The article concludes that the PACM contains strong safeguards: a mandatory ex ante risk assessment that triggers compulsory mitigation and monitoring plans if trade‐offs are identified; sustainable development indicators that are subject to third‐party verification; and appeal and grievance processes that provide avenues for redress and oversight. These features position the PACM to reduce problem‐shifting relative to the CDM, provided they are applied rigorously and transparently.