Carbon Market Mechanisms Working Group

Background and Objective

In designing the market mechanism set out in Article 6.4 of the Paris Agreement, the Parties are to take into account the experience gained to date under the Kyoto Protocol and build on successful models. One particularly promising approach developed under the CDM is the so-called Programs of Activities (PoAs). This makes it possible to combine many smaller projects into a larger program. Since the administrative burden for each individual measure is significantly reduced, the approach is particularly suitable for use with very small projects.

The programmatic approach has been successfully applied under the CDM and will continue to be of great importance for voluntary cooperation under Article 6 and its goal of increasing climate change ambition. Against this background, BMU supports the Carbon Market Mechanisms Working Group (CMM-WG) established at Innovate4Climate in Singapore in June 2019.

Implementation

The focus of the initiative, which originally focused on improving CDM PoA rules, has been expanded to assess the relevance of programmatic and sectoral approaches to results-based climate finance and Article 6 crediting. The working group, coordinated and led by Perspectives, aims to facilitate an ongoing dialogue among significant stakeholders who have practical experience with upscaled approaches. In this way, the working group contributes to the development of robust rules that ensure environmental integrity for scalable mitigation approaches.

Milestones and outlook

The CMM WG provides a platform for dialogue, enabling the exchange of experiences and coordination of activities to support the role of programmatic and large-scale activities. In regular meetings in informal settings, stakeholders are invited to share experiences, challenges, and success stories of their activities. Background papers on key issues for future international market-based cooperation are prepared and circulated to consolidate a common understanding of technical issues. In addition, Perspectives regularly consults with relevant stakeholders on specific issues and reports to the CMM WG.

Through these activities, the WG aims to support the development of ambitious climate action and help move entire economic sectors toward low-carbon and climate resilient development.