Developing countries wanting to use market instruments to scale up their mitigation efforts will soon have access to financial and technical support arising from a new global partnership launched today.
World Bank Group President Robert B. Zoellick announced the establishment of the Partnership for Market Readiness at an event on the sidelines of the UN Framework Convention on Climate Change conference in Cancun.
The Partnership received pledges of more than $20 million by Australia (A$10m), the European Commission (€5m) and the United States ($5m) in Cancun today, which builds on an early pledge of $5 million from Norway. In addition, Germany, Japan and the UK announced their intention to support the initiative financially.
The Partnership is aiming for a total capitalization of $100 million. It is expected to become operational in early 2011 and will support a range of carbon market readiness initiatives ranging from technical to policy to institutional interventions.
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“This new Partnership – which brings together developed and developing nations – will help countries get ready to put in place domestic trading schemes and other market-based instruments to meet national mitigation objectives,”Zoellick said. “The fact that developing countries are looking for market-readiness support is testament to the drive for climate action at the national level – these countries are not waiting, they’re getting on with it as part of their development goals.”
A number of countries, such as China, Chile, Indonesia, and Mexico are exploring the use of carbon market instruments and emissions trading mechanisms as a way of encouraging investment in alternatives to carbon-emitting technologies. They are looking to build on lessons from the 10 years of experience of the Clean Development Mechanism under the Kyoto Protocol, and adapt them to their local contexts. For example, Chile’s government is exploring the establishment of a domestic emissions trading scheme; India, similarly, is putting in place a trading scheme for renewable energy and energy efficiency certificates.
Furthermore, China is joining the Partnership. “China has launched low carbon economy pilots in five cities and eight provinces. China intends to explore feasibility of domestic emissions trading schemes to achieve mitigation,” said Mr. Xie, Vice Chair of the National Development and Reform Commission. “The Partnership for Market Readiness will provide timely support for the initiative.”
In announcing Australia’s A$10m contribution, Minister for Climate Change and Energy Efficiency, Greg Combet, said “a broad and well-functioning carbon market will help countries reduce carbon pollution in the fairest, most efficient and cost effective way. Australia looks forward to working with other partners in building capacity to establish and expand carbon markets.”
Zoellick was joined at the launch event by Raineri Bernain, Chilean Minister of Energy who presented his country’s national emissions trading initiative. Other participants included ministers and senior representatives from the European Commission, Australia, China, Colombia, Germany, Indonesia, Japan, Mexico, Norway, South Africa, Spain, Sweden, the UK and the US.