The experiences with the Joint Crediting Mechanism (JCM), a bilateral market mechanism promoted by Japan are assessed by means of a multi-criteria analysis. A particular focus is on accounting and baseline/monitoring methodologies. Moreover, the benefits of JCM projects are assessed for the four host countries Indonesia, Vietnam, Ethiopia and Mexico. Taking into account the interests of Japan and the EU which are assesses through their past inputs in the negotiations, proposals for the negotiations on market mechanisms under the UNFCCC are developed that achieve high environmental integrity and could garner an international consensus. A key feature of the project is a multi-level dialogue between Japan and the EU through a government dialogue meeting and two expert workshops.