Background and Objective
Carbon markets represent a valuable opportunity for states in the Caribbean to tap into additional financing needed to fund needed to fund climate mitigation, sustainable development, and the renewable energy transition. To date, many Small Island Developing States (SIDS) in the Caribbean have seen only marginal representation in the global carbon market. Most Caribbean SIDS did not participate in the Clean Development Mechanism (CDM) and have yet to realize substantial investment from international carbon markets. However, there is a strong regional interest in using market mechanisms, particularly under Article 6 of the Paris Agreement, to mobilize financing that is increasingly needed for SIDS that are already facing significant impacts from climate change. To scale such investments in the region, countries require adapted institutional structures, policies, strategies, and monitoring, verification and reporting (MRV) systems. The Global Carbon Market project supports countries in the region with developing these frameworks and institutional capacities to enable their active participation both in the voluntary carbon market and in novel economic mechanisms, such as those under Article 6.
Implementation
In the Caribbean, the project supports the identification and dissemination of information on market opportunities in key sectors relevant for the region, such as tourism, e-mobility, and mangrove conservation and reforestation. The project conducts studies and engages public and private sector stakeholders to promote knowledge exchange and collaboration on possible future carbon market scenarios in the Caribbean. The project aims to foster a regional approach to Article 6 by providing recommendations and support for the establishment of a Caribbean Alliance on Carbon Markets and Climate Finance. To this end, the project also collaborates with the Organization of Eastern Caribbean States (OECS) and the Regional Collaboration Centre (RCC), among others, to build regional capacities for the design and use of Article 6 and other novel economic climate protection instruments.
Milestones and Outlook
As part of the project, public and private sector stakeholders from the Caribbean have received training on carbon pricing and on Article 6. Private sector representatives have received specific guidance on carbon markets in the tourism sector. An initial youth workshop has been conducted to encourage youth to get involved in international climate negotiations and the shaping of carbon markets in the Caribbean. Support was also provided to CARICOM for the publication of a regional Article 6 negotiations handbook.
The project worked with government officials in six OECS member states to provide recommendations for integration of carbon pricing into their Nationally Determined Contributions (NDCs). Ongoing support is being provided to the OECS for the establishment of a Caribbean Alliance on Carbon Markets and Climate Finance. This platform will enable improved regional and country-specific capacity building for Article 6 readiness.
The project has conducted an assessment on the potential of carbon offsetting through mangrove restoration and conservation in Saint Lucia, which is intended to serve as the foundation for a regional approach. Findings have been presented to the Ministry of Forestry and other regional stakeholders for discussion. Looking forward, the project will support scoping on project proposals and regionally appropriate financing sources. Support will also be continued in terms of recommendations for the establishment of institutional structures and a regional Article 6 strategy.