Global Carbon Market – Uganda

Project description

Title: Global Carbon Market
Commissioned by: German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB)
Country: Uganda
Lead executing agency: Climate Change Department of the Uganda Ministry of Water and Environment
Overall term: 2015 to 2018

Context

For the German Government, a global carbon market is an important instrument for international climate protection. The trading of emissions allows mitigation activities to take place first in places where they are least expensive. This makes mitigation activities less costly, with the result that effective carbon markets can contribute to states setting more ambitious climate targets and the private sector making more climate-friendly investments.

In 2008, the German Federal Environment Ministry launched the CDM /JI Initiative to support its partner countries in using the flexible mechanisms of the Kyoto Protocol – the Clean Development Mechanism (CDM) and Joint Implementation (JI). The Global Carbon Market project is part of the CDM/JI Initiative, and supports its objectives in Uganda, Chile and India.

Uganda and other least developed countries are underrepresented on the international carbon market and hardly use the CDM or new market-based mechanisms for the achievement of their climate and development goals. For this reason, the European Union decided that, to be eligible for inclusion in the EU Emissions Trading System, new CDM projects must be located in these countries. Thus East Africa has a high potential to become a hotspot of CDM activity.

Uganda is conducting 25 CDM programme and project activities, the largest number in East Africa. A climate change bill is currently being developed to supplement the National Climate Change Policy adopted in 2013. The consultation process linked to this law provides a chance to work towards more conducive conditions for carbon market instruments.

Objective

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

Approach

The project supports the development and implementation of CDM projects and other carbon market instruments, both in Uganda and in the wider East African region. It is sensitising policymakers about carbon market mechanisms and provides training for Uganda’s Designated National Authority, the agency in charge of authorising and approving CDM projects. The project also encourages greater private sector involvement, for example, supporting commercial stakeholders in identifying and developing project ideas. Furthermore, it is promoting the harmonisation of carbon markets and emission trading systems in the region.

Results

The project has conducted awareness-raising and training for public and private-sector actors, regarding key issues related to market-based approaches for the mitigation of climate change. For example, it has run training events for members of parliament involved in the Parliamentary Forum on Climate Change, and it has built the capacities of Ugandan delegates in advance of international negotiations.

The Energy Ministry received support for the development of its proposal for a nationally appropriate mitigation action in the transport sector. The main focus here was on assessing how the planned activities could be linked to carbon markets.

Interested companies have benefited from advice and training with respect to CDM investment potentials. Moreover, the project’s support for the East African Carbon Fair in July 2015 did much to bring commercial players from the region into contact with the promoters of the carbon markets.