Article 6.4 of the Paris Climate Agreement to allow private companies to access this new market is being configured, a Senegalese official announced.
The carbon market is a mechanism for trading greenhouse gas emission rights. It is one of the incentives provided for by the Kyoto Protocol to encourage states to reduce their emissions and opt for new, lower-cost technologies.
In Senegal, this market, which until now has only been accessible to the state, will very soon be open to the private sector. “Very soon, the private sector will be able to use the 6.4 mechanism that governs this market and that is currently being configured to sell carbon credits,” announced Abdoulaye Seck, head of the project to develop policy approaches in the framework of Article 6 in Senegal.
Abdoulaye Seck was speaking on Tuesday at a training workshop initiated by the Global Green Growth Institute (GGGI) on Article 6 of the Paris Climate Agreement as part of the development of policy approaches under this provision.
Before any project can begin to issue UN-recognised credits, it must be approved by both the country where it is implemented and the UN supervisory body. These credits, also known as A6.4ER, can be purchased by countries, companies or even individuals.
Carbon revenues are rising sharply, reaching about US$56.8 billion in 2020, up from US$48 billion in 2019. Fifty-two per cent of this will come from taxes and 48 per cent from allowance markets.
“The financing opportunities are huge. And if we manage to capture them, this will allow us to have resources to implement energy efficiency or sustainable development projects in our country,” said Mr Seck.
On this basis, GGGI’s resident representative in Senegal, Assana Magagi Alio, stressed the need to “put in place a robust infrastructure to support the implementation of a technical assistance and technical capacity building programme for key stakeholders including their involvement in the achievement of the Nationally Determined Contribution (NDC)”.
Therefore, his organisation is engaging in a series of training sessions to sensitise stakeholders to the NDC implementation process as part of the project to design policy approaches on Article 6 of the Paris Agreement.
After this first training session, others are also planned to address Article 6 ground rules, governance of carbon markets and procurement contracts among others.