On June 13-14, 2023, the Global Green Growth Institute (GGGI) and Nepal’s Ministry of Forests and Environment (MoFE) organized the two-day workshop “Mitigation Outcomes Purchase Agreement (MOPA)” as part of the project Mobilizing Article 6 Trading Structures (MATS) funding by the Swedish Energy Agency (SEA). Climate Focus led the training event which included representatives from the Government of Nepal, including MoFE, the Ministry of Energy, Water Resources and Irrigation (MoEWRI), Alternative Energy Promotion Center (AEPC), private sector companies, NGOs, and INGO.
This training event marks an important event for the MATS project in Nepal. The project is developing and implementing the national institutional framework required for Nepal to trade under Article 6 of the Paris Agreement and is supporting AEPC to develop the required Mitigation Activity Design Document (MADD). More specifically, as part of the MATS project, GGGI is supporting MoFE and AEPC to enter into Nepal’s first transaction under the Paris Agreement’s Article 6.2. The training aimed to give the participants the essential skills and knowledge to negotiate carbon agreements and effectively implement mitigation strategies. The training also ensures effective participation in Article 6.2 and help make carbon trading a reality in Nepal.
Dr. Lasse Ringius, GGGI Country Representative in Nepal, said in his opening remarks that “carbon trading is a key mechanism for increasing global ambitions to reduce emissions under the Paris Agreement and Nepal is now taking important steps to engage in carbon trading with the support of GGGI. The MOPA training will help Nepal build the negotiation skills and contractual understanding required to engage in and benefit from both the voluntary carbon market and carbon trading in the framework of the Paris Agreement.” He also introduced the MATS program and briefly summarized the evolution of the global carbon market from the establishment of the Clean Development Mechanism (CDM) to the Paris Agreement’s Article 6.
In his capacity as the MOFE focal for the CDM and Under Secretary at the Climate Change Management Division, Mr. Hari Sharma gave a brief overview of the activities the GoN is currently undertaking to engage in Article 6. As emphasized by Mr. Sharma, “Nepal’s engagement in the international carbon market will support the country in achieving carbon neutrality by 2045, in line with our Long-term Strategy. Understanding terms and conditions under the MOPA is crucial for Nepal to not end up with a sour deal. This MOPA training is the first step towards building the capacity of the country to participate in both the voluntary carbon market and trade under Article 6 of the Paris Agreement.” The training aimed to deepen the understanding among key stakeholders of the legal aspects of Article 6. The broader objective was to empower the participants and support ambitious national climate targets and facilitate the attainment of transformative benefits that can consistently contribute to climate change mitigation efforts.
Apart from examining the terms and provisions of a MOPA, Climate Focus also stimulated group discussion to facilitate further understanding of the contractual risks the participants could be exposed to in a MOPA and how to mitigate risk. “The negotiation exercise was meant to help the participants to put in practice what they had learnt. It was quite impressive to see how the participants were able to identify risks, provide counter proposals and discuss what was unacceptable to them. Quite an engaged audience,” said Lydia Omuko-Jung, a legal expert from Climate Focus. Unquestionably, the goal of this training was to increase Nepal’s readiness to fulfill its obligations under the Paris Agreement.
GGGI is confident that this training will make Nepal better equipped to implement Article 6 and to enter successfully into the first carbon trade under Article 6. The training program underlines GGGI’s commitment to strengthening the capacity of member and partner countries in the area of global carbon finance.