Africa’s carbon market achievements and potential: Key insights on existing portfolios and potential for transition to Article 6

Sep 26, 2021 @ 14:00 - 15:00

• 26 September 2021, 2 PM CET / 3 PM EAT
• Africa Climate Week 2021, Virtual Thematic Sessions

Tracking dynamic data (and establishing data sharing practises) across the various standards is a critical base process for countries;
All countries built up invaluable experience under the CDM and VCM from prior consideration to registration and issuance;
VCM is more significant in issuance volumes terms than the CDM;
There were dominant sectors (but variation): CDM – IPPs, cook-stoves, Water Purification, GS – Cookstoves and VCS and PlanVivo – Forestry;
Despite the successes much of the emission reduction potential remains locked in the pipeline which in part (CDM projects) is reaching the end of its shelf life;
Recent activity from new demand centers and emerging mitigation actions (mini-grids) is encouraging in a very dynamic region, especially considering the ability for existing PoAs (e.g. cookstoves) to scale.

When an activity is eligible for transition, it may continue to apply the currently approved CDM methodology either until of the end of its current crediting period or until 31 December [2023], whichever is earlier. Afterwards, it shall apply an A6.4M methodology.
The issue of baselines and additionality is linked to principles of transparency and conservativeness. Several baseline approaches have been proposed and current discussions focus around availing menu of different approaches versus a single approach
There is an established definition of additionality under CDM however, how to link to NDC and long-term strategies is unclear
The transition of carbon credit units – pre 2020 CERs is highly contentious. There is debate as to whether pre-2020 CERs can be used toward NDC targets and strong stands ‘against’ and ‘for’ transition of units. As of COP 25, compromises put forward include cut-off dates for registered projects and having a reserve.

Panelists: Herman Hakuzimana (Rwanda), Issa Nyashilu (Tanzania)

Both panelists highlighted that article 6 of Paris Agreement will play an important role in the achievement of NDC targets through cooperative approaches, building upon the experience of the Clean Development Mechanism (CDM) and other existing market mechanisms.

Rwanda:

Basing of Standardized Crediting Framework (SCF) pilot, Rwanda is assessing requirements for its participation under Article 6 of the Paris Agreement. Rwanda is currently discussiong with Partners to put in place the necessary infrastructure and governance arrangements, building on the piloted SCF done in 2018
In terms of capacity building, there have not yet developed clear modalities, guidelines and legal framework and operational procedures for the approval of internationally transferred mitigation outcomes (ITMOs).
Issuance and authorization of ITMOs will need deeper technical analysis to understand implications of their transfers and how to avoid double accounting. Capacity support is required to strenghen Rwanda’s readineass for Article 6 implementaiton.

Tanzania:

Article 6 is not yet well mainstrained in the national policies. Currently the country is using CDM market guidleline
Capacity building support is required in order to strenghen Tanzania’s readiness for Article 6 implementation.

Going forward in the PA regime the national approval of project will play a critical role in transition of existing project to Article 6. Are countries prepared to play this role in anticipation of positive outcome of COP26?

Many countries, including Rwanda and Tanzania, have not yet developed the procedures. Countries expect clearer guidance on the procedures from COP26.

STEPHAN HOCH
Perspectives Climate Group

TOM COWMAN
ClimateCare

Below you can watch the recording of the event.