Title: Global Carbon Market Commissioned by: German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) Country: Global Lead executing agency:
Uganda: Climate Change Department of the Uganda Ministry of Water and Environment
India: Ministry of Environment, Forests and Climate Change
Chile: Ministerio de Energia
Tunisia: L‘Agence Nationale pour la Maîtrise de l’Energie Overall term: 2018 to 2022
Carbon markets are an effective and inexpensive instrument for climate change mitigation. Together with other instruments for pricing greenhouse gas emissions, such as CO2 taxes, they provide incentives for climate-friendly investment. As a result, carbon markets can contribute to states setting more ambitious climate targets.
The global carbon market is regulated by Article 6 of the Paris Agreement. Its aim is to enable signatory states to utilise global market mechanisms. Various international, national and sub-national market mechanisms are currently under development around the globe. The increasing heterogeneity of carbon markets requires a robust regulatory framework to avoid risks such as activities being counted twice.
Since 2008, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, on behalf of the German Environment Ministry, has been supporting partner countries in using market mechanisms for reducing greenhouse gas emissions. It aims to enable the partner countries – Uganda, Chile, Tunisia and India – to link activities in the carbon market with their respective national climate protection policies.
Public and private decision-makers are able to use national and international carbon market instruments for the implementation of their climate change mitigation activities.
In the partner countries, the project supports the further development of market mechanisms and promotes innovative climate protection projects. Planning for cooperation with the Caribbean has been under way since 2021.
Through studies and analyses, the project strengthens the ability of public decision-makers in the partner countries to make use of new and existing carbon market instruments. It advises government agencies and private sector actors on the opportunities provided by market-based instruments. Experiences and lessons learned are shared with relevant actors at conferences and workshops. The project also strengthens the participation of the partner countries in international negotiations and South-South knowledge exchange.