Building up the global carbon market in East Africa

Project description

Title: Global Carbon Market
Commissioned by: German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU)
Country: Uganda, Ethiopia, Rwanda, Kenya
Lead executing agency: Climate Change Department of the Uganda Ministry of Water and Environment
Overall term: 2018 to 2021

Context

With more than 100 projects in the frame of the Clean Development Mechanism (CDM) in East Africa, the region is one of the hubs of CDM projects in Africa. With 25 CDM projects, Uganda has the highest share of these projects.

However, on the international carbon market, Uganda and other Eastern African countries are still underrepresented and do not make sufficient use of new market-based mechanisms to complement their national climate and development strategies. The reasons are varied, but include a lack of capacity on the part of national decision-makers, unfavourable institutional settings and bureaucratic barriers, insufficient financing mechanisms for project ideas and inadequate appraisals of project ideas by project developers, which reduces bankability. 

With the adoption of the Paris Agreement, the relevance of carbon markets has been reaffirmed under Article 6. 

Objective

Public and private decision-makers in Uganda and the East African Region have the necessary knowledge and skills to use carbon market instruments for the implementation of their national climate change mitigation actions.

Approach

The project promotes the use of carbon market mechanisms to implement climate action (including Nationally Determined Contributions, NDCs) by supporting the private and public spheres at the national as well as the regional level. It focuses its activities on the transfer of successful approaches and experiences of the Kyoto Protocol into the Paris Agreement, ensuring the continuity of ongoing CDM projects, as well as contributing to the design of Article 6 through piloting activities as well as supporting Uganda and other East African countries to utilise carbon mechanisms for their NDC implementation.

The support of the private sector focuses on providing local enterprises with information about opportunities and entry requirements for the carbon market.

Regulatory bodies and policy makers receive technical advice on the opportunities that carbon markets entail. Partners are then qualified to create an enabling environment for the use of carbon markets to finance and implement national mitigation targets within their NDCs. 

Moreover, the project aims to enhance regional cooperation among the Eastern African Community (EAC) by promoting the creation of a common vision on carbon mechanisms.

Results

The project has conducted several awareness raising activities and trainings for public and private sector actors, regarding key issues related to market-based approaches for the mitigation of climate change. Many interested companies have also benefited from advice and training with respect to the investment potential of carbon markets. Furthermore, up to 217 parliamentarians from Uganda’s Parliamentary Forum on Climate Change have been beneficiaries. 

Moreover, training events, in preparation of the UNFCCC climate change negotiations (COPs), have built the capacities of regulatory bodies, ministry representatives as well as negotiators from East African countries. Participants were informed about opportunities and future scenarios of the carbon market and the use of carbon market instruments for the implementation of their countries’ NDC.

Furthermore, standardised baselines for various sectors have been developed or revised to enable easier development of carbon projects in the region. For example, the Green School’s NAMA in Uganda, which aims to install improved institution stoves in at least 18,000 schools.