For the German Government, a global carbon market is an important instrument for international climate change mitigation. It helps to realise climate protection efficiently. Emissions trading has the advantage that emissions reduction takes place first where it is least expensive. This makes climate change mitigation less costly, with the result that effective carbon markets can contribute to states setting more ambitious emission reduction targets and the private sector making more climate-friendly investments.
Since 2008, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, on behalf of the Federal Ministry of the Environment, has been supporting partner countries in using market mechanisms for reducing greenhouse gas emissions. Above all, it aims to link activities in the carbon market with the respective national climate protection policy in the partner countries.
The project also supports the further development of market mechanisms and promotes innovative climate protection projects. The partner countries involved in the project are Uganda, Chile, Tunisia and India.
Market mechanisms and other forms of cooperation are also mentioned in Article 6 of the Paris Agreement. As such, the parties to the Agreement have asserted their intention to make these mechanisms a fixed part of the new climate regime. This project contributes to putting Article 6 into practice.
Public and private decision-makers have the necessary knowledge and skills to use existing and new carbon market instruments for the implementation of their national climate change mitigation activities.
The project supports the public decision-makers in partner countries in using existing and new carbon market instruments for their national climate change mitigation activities. It also supports the strategic development of new instruments. At the same time, the project promotes the participation of the private sector in developing and implementing carbon market mechanisms.
The project advises government agencies and private sector actors in the partner countries on the potential benefits of the carbon market, including the use of new market mechanisms, as well as the linking of nationally appropriate mitigation actions (NAMAs) and 'Programme of Activities' approaches. These approaches entail the bundling of similar small-scale project activities into one programme. In addition, through studies and pilot activities, the project promotes the design of the mechanisms laid down by Article 6 of the Paris Agreement.
In the partner countries, the project has provided training for public and private sector actors. Training topics included new market mechanisms and climate finance instruments. The participants from government agencies, ministries and companies attended training workshops and dialogue forums, where they acquired new knowledge and the use of feasibility studies and market analyses supported the development of emission trading instruments. The actors in the partner countries have been made aware of the potential held by Article 6 of the Paris Agreements.