Background and Objective
More and more countries are planning or considering the use of carbon pricing to meet their nationally determined contributions (NDCs). The World Bank’s Partnership for Market Implementation (PMI) responds to this increased demand for implementation support.
The PMI was launched at COP25 in Madrid as the successor programme to the Partnership for Market Readiness (PMR), which helped 23 countries to develop ‘readiness’ for innovative carbon market instruments. The PMI became operational in early 2021. The new 10-year programme, with a capitalization target of USD 250 million, aims to assist participant countries in designing, piloting and implementing domestic carbon pricing instruments aligned with national development priorities, while also facilitating their participation in global carbon market and pricing regimes.
The main focus of the PMI is to facilitate direct implementation of countries’ carbon pricing policies and instruments via technical assistance and capacity building. Through provision of grant funding, the PMI will assist countries in three programme windows: implementation support, readiness support and targeted support.
Implementation support will be provided for countries which have already achieved ‘readiness’ in terms of domestic capacity and institutional architecture (for instance under the PMR or similar programmes) and are able to demonstrate strong political commitment to move to implementation. The PMI will assist countries in, among other things, strengthening domestic implementation capacity, supporting legislative and policy review functions or scaling and expanding the carbon pricing scheme to new sectors.
Readiness support is open primarily for new countries that have included carbon pricing as an option to achieve their mitigation targets but are yet to begin or accelerate their carbon pricing activities. Readiness support activities include determining which instruments to adopt, building stakeholders’ support and assessing non-climate benefits.
Targeted support will be provided at regional and subnational level in a third programme window. The PMI will aid harmonization of carbon pricing infrastructure, adoption of innovative tools and the development of transparent accounting procedures to facilitate regional cooperation on carbon pricing.
Milestones and Outlook
The PMI builds on the achievements of the PMR, which since 2011 has supported readiness roadmaps for 23 countries, built the capacity of over 3,000 technical professionals, and produced and disseminated a vast body of knowledge on carbon pricing and markets. With its operationalization, the PMI will help countries to move towards implementation of domestic carbon pricing policies and instruments. It also encourages international and national cooperation, and informs both domestic and global policy discussions on GHG mitigation by sharing lessons learned and providing a platform for collective innovation on carbon pricing instruments.