Catalyzing market mechanisms to help deliver NDC commitments and crowd in the private sector

The NDC partnership pavilion held an event on catalyzing market mechanisms to help deliver NDC commitments and crowd in the private sector, it was aimed at showcasing how carbon mechanisms can align with countries’ NDCs and climate finance plans. This was a side event organized by CMIA and Gold standards on 4^th November 2021 in Glasgow Scotland.

The event focused majorly on NDC commitments in the private sector, carbon pricing and carbon mechanisms. Panelists also discussed voluntary carbon markets involvement, and the importance of carbon markets in energy efficiency.

Strengthening private sector engagement in Eastern Africa with the growing momentum to participate in Article 6

There has been growing interest and momentum from private sector stakeholders to participate in international carbon markets following COP 26 in Glasgow, which finally adopted the guidance and rules for Article 6 of the Paris Agreement after six years of negotiations. 

While the fundamental rules of Article 6 are now agreed upon, the specific details for their operationalization are still to be determined in a subsequent work programme.  Private sector actors are reaching out to Governments for guidance on implementing cooperative approaches and voluntary carbon market activities, the transition of Clean Development Mechanism (CDM) activities to Article 6 and requesting authorization for international transfer of mitigation outcomes. On the other hand, the public sector actors have significant capacity-building requirements on their institutional, infrastructure, and legal frameworks to fit the new Article 6 provisions.

Given the foregoing, the Eastern Africa Alliance on Carbon Markets and Climate Finance, with support from the GIZ Global Carbon Markets Program, commissioned by the German Ministry of Economic Affairs and Climate Action, together with the UNFCCC-Regional Collaboration Centre, Kampala held a regional private sector workshop on 16-17th March 2022 in Entebbe, Uganda. The main purpose of this workshop was to discuss and analyze the relevance of COP26 Outcomes for Article 6 implementation, CDM transition, and voluntary carbon markets (VCM) in Eastern Africa. It brought together more than 60 participants, including, private and public sector actors, representatives from development partner agencies, multilateral institutions, and civil society from Eastern Africa and beyond.

Participants presented case studies of CDM and Article 6 pilot projects and innovative projects, for example in e-mobility, that could potentially participate in these market mechanisms, to synthesize lessons learned and discuss how these can inform future Article 6 VCM activities.

The key messages from the session are as follows;

• Article 6 implementation will be a learning-by-doing process. Participants expressed the need to maintain public-private dialogue to build knowledge on the new markets and share experiences on what works and what may not.
• Whereas uncertainty remains on advancing technical rules and procedures for Article 6, it is essential for the private sector to accelerate the deployment of carbon market activities already while public institutional capacity is being established.
• There is a need to strengthen Designated National Authorities’ capacities to effectively manage and monitor Article 6 activities and regional institutions to undertake validation and verification audits. 
• Capacity building for the private sector is needed to transition CDM activities, develop Article 6, and acquire authorization for the international transfer of ITMOs.
• Pilot projects are a practical approach to shaping the elements of Article 6 while building host country capacity.

The workshop was closed with remarks from the Representative of the Ugandan Government who emphasized the importance of public-private sector cooperation in ensuring rapid development of the Article 6 landscape and realization of country NDC targets.

TedxDalbergCatalyst talk: Getting carbon markets right in Africa

Through the theme ‘the surprising power of small to save the planet’, this talk on carbon markets, given to a general audience, demystified how the instrument, when used well, could contribute to climate action. The Coordinator of the Eastern Africa Alliance on Carbon Markets gave her take on the beneficial use of market mechanisms to contribute to NDC implementation in the Paris Agreement while understanding and taking lessons from the history of market activities in the Eastern Africa region. The video aired on 3rd November during COP 26. However, the message remains relevant now that there is a decision on Article 6.

Watch the video Here

Enhancing NDC ambition through Article 6 cooperation in Africa

An online event on enhancing NDC ambition through Article 6 cooperation in Africa was conducted on 3^rd November 2021, its main aim was to establish how article 6 cooperation can scale up mitigation activities and promote sustainable development in Africa under the Paris Agreement. This was a side event at the COP26 in Glasgow organized by MDB pavilion

The event mainly focused on the ongoing initiatives in Africa, key opportunities with host countries and Africa’s view on Article 6 piloting and highlight the importance of these activities for enhancing market readiness.

Nordic approaches to support global carbon market cooperation under the Paris Agreement

An event on Nordic approaches to support global carbon market cooperation under the Paris Agreement organized at the Nordic pavilion on 9^th November 2021 was aimed at discussing the role of Article 6 and Carbon markets. The event was attended by different stakeholders i.e., NEFCO, NICA and Bianca coordinator for Eastern Africa Alliance for Global carbon markets and Carbon Finance.

The session’s focus was on mitigation, reduction of emission and achieving sustainable development goals including gender equality and women empowerment, and private sector involvement in solving climate change.

Capacity building for Article 6 readiness

A side event on capacity building for Article 6 readiness at the PCCB pavilion was co-organized by perspective climate group and Vietnam on Tuesday 9^th November 2021 at COP26 in Glasgow. This event was organized with the aim of discussing Article 6 readiness and CDM transition, capacity building, and technicalities on Article 6 regulation.

The session involved discussing among others, Article 6 challenges that could reduce ambition contribution, the importance of CDM transition, transparency and regulatory certainty for Paris Agreement carbon markets and Vietnamese experience with the NDC and status on carbon markets.

Watch the event Here

PreCOP26 Negotiators training

A workshop comprising of three virtual session was conducted with the aim of increasing the understanding and knowledge of East African negotiators’ capacity to effectively engage in the international climate change negotiations relating to Article 6.

The workshop, which has become a recurrent Alliance activity, was aimed at strengthening the skills of EAA member countries’ negotiators to effectively contribute to the discussions at COP 26 and during AGN meetings while at the same time remaining grounded in their common regional position and national priorities.

It involved an update on the current status of UNFCCC negotiations, deep diving on the crunch issues to simulate the preparation of a technical briefing paper on key issues in Article 6 negotiations and strengthening of the regional positions ahead of COP 26.

This was organised by the Eastern Africa Alliance on Carbon Markets and Climate Finance with support from GIZ Global Carbon Markets Programme on behalf of the German Federal Ministry of Environment, the and the UNFCCC Regional Collaboration Centre in Kampala.

Video available here

Article 6 Workshop Uganda

The Climate Change Department (Ministry of Water and Environment, Uganda) organized a one-day meeting on Article 6 of the Paris Agreement on 4th October 2021 at Mestil Hotel Kampala. Given that the rules and guidance under Article 6 are the last piece of the Paris rulebook to be resolved, the meeting with relevant stakeholders and negotiators on key issues was timely. It was an important step in strengthening national coordination on matters related to carbon markets under the Paris Agreement.  Parties will come together at COP26 in high hopes of finally coming to a decision on Article 6.

The meeting took attendees through Article 6 negotiations matters from the SB 52 sessions and inter-ministerial meetings, a deep dive into Article 6 crunch issues in relation to Uganda’s priorities and discussed position points around 6.2, 6.4 and 6.8 of Article 6. This year at COP 26 will take place in Glasgow, UK, from 31st October to 12th November 2021.

Private sector regional carbon markets engagements 2021

The online dialogue and peer to peer exchange for regional carbon project developers was organized by Eastern Africa Alliance on Carbon Markets and Climate Finance with support from GIZ Uganda and UNFCCC RCC Kampala. Its main purpose was to strengthen eastern Africa private sector stakeholders’ knowledge on carbon markets as well as the capacity to engage in article 6 carbon markets.

The dialogue focused on knowledge of carbon markets amongst Eastern Africa’s public and private sector stakeholders in order to strengthen their capacity to proactively participate in emerging article 6 landscape including the transition from CDM to the Paris Agreement mechanisms. It was stressed that Article 6 was a crucial element of the UNFCCC negotiations at COP 26 and an entry point for private sector engagement under the Paris Agreement.

The private sector was encouraged to contribute to national implementation of the future Article 6 guidance. In other words, COP 26 will likely not be a single event that fixes everything though will offer higher level guidance upon which the operational rules need to be fleshed out a process in which the private sector can play an important role.

The private sector should be searching for provision of regulatory clarity on the market rules with the NDC context as a potential game changer, efforts to build on existing foundations for example, the hard fought and high-quality African pipeline should be recognized and leveraged on grounds for opening up new opportunities like the emerging sub-sectors such as e-mobility.

There were many sectors that had not been supported by the CDM and therefore in realizing new opportunities under Article 6, there is the need for comprehensive capacity building efforts involving the private sector.

Find the video recordings here

Corresponding Adjustments Training

Countries decided to use corresponding adjustments to avoid double counting of internationally transferred mitigation outcomes (ITMOs); however, this has raised several questions about what corresponding adjustments are and how to apply them. The Alliance organized a three-day virtual training workshop on Corresponding Adjustments (CAs) from 30^th August to 1^st September 2021, 10 am EAT. The sessions’ objectives were to strengthen the understanding of the Alliance member counties on CAs as a critical issue relevant for national Article 6 readiness and institutional capacity development.

During the first day of the training, Amy Steen of the UNFCCC introduced the participants to the topic of CAs, updated on the current status of the agreement, open issues for Art.6, enhanced transparency meeting, expected reporting requirements and roles of CAs and finally on the expectations for COP 26. Axel Michaelowa from Perspective Climate Group enlightened the participants with the role of CAs in the Voluntary Carbon Market (VCM). Regionally, 6 out of the 7 EAA member countries have activities. The countries have the following issuance: Ethiopia 9%, Kenya 27%, Rwanda 34%, Tanzania 7%, and Uganda 24%. The region hosts 169 certified Gold Standard projects, and more than 16.7 million credits have been issued.

Participants engaged in discussion around the role of Individual countries and country’s negotiating groups in the negotiations about article 6, the advice that can be given to countries in transition and trying to develop new VCM projects, and the possibility of two countries sharing emission credits. Details of day one of the corresponding adjustment training can be found here.

On the second day of the training, Sina Wartmann representing Perspective Climate Group, introduced the participants to the draft templates for performing CAs and the different methodologies. Perspective Climate Group developed a draft table for CAs to understand what data is supposed to be collected and calculate and track the CAs. Questions were on how to differentiate between conditional and unconditional NDC targets. More details about the second day session can be found here

On the third and the last day of the training, Sina started by giving a brief review of the exercise from the previous session and gave a general overview of her findings. El Hadji Mbaye Diagne shared Senegal’s experience in Article 6 and Corresponding adjustments for ITMOS transfers stating that Senegal submitted its NDC in December 2020. Senegal has a wide range of activities under Article 6 first, a project with the World Bank which set up a standardized crediting framework. Senegal has successfully signed a bilateral agreement with Switzerland on Article 6. A readiness assessment of Article 6 in Senegal was done as part of a wider study on the region undertaken by the Western Africa Alliance. More details of day 3 session can be found here