Carbon pricing workshop enables dialogue among countries in the region to explore strategies to strengthen ambition and climate financing in Latin America and the Caribbean

For a week, the first workshop on Carbon Prices and Article 6 brought together decision-makers who met at ECLAC headquarters in Santiago, Chile, to provide an overview of the different carbon pricing instruments; share experiences and knowledge from the implementation of carbon pricing instruments; and strengthen knowledge on Article 6 of the Paris Agreement, explaining its opportunities, challenges, requirements and implications.

The regional workshop was co-organized by the Carbon Pricing Platform in the Americas (CPA), the Regional Collaboration Centre (CCR) for Latin America of the United Nations Framework Convention on Climate Change (UNFCCC), the World Bank and ECLAC, with the support of the Euroclima Programme of the European Union.

The first day of the workshop focused on the importance of international cooperation in carbon markets, a key aspect for the effectiveness of climate policies. Participants analyzed the opportunities that carbon pricing instruments provide to reinforce climate action, mobilize financing and help countries meet their NDCs.

ECLAC presented the publication “Economic Policy and Climate Change: Carbon Pricing in Latin America and the Caribbean” which shows the application of these pricing instruments in countries of the region and highlights the need to apply higher carbon prices that correspond to the costs of the externality generated by carbon emissions.

On the second day, the specific features of the operation of emissions trading systems were presented in detail, including the importance of data, institutional strength and governance. These systems must have an emissions cap, specify the gases covered, define a time period and cover key economic sectors, as well as establish prices that encourage changes in the behavior of the actors.

At the session, Victor Ortiz, director of the International Partnership for Carbon Action (ICAP), highlighted that “emissions trading systems seek to find solutions and mechanisms to reduce greenhouse gas emissions in the most cost-effective way. To do so, all emissions must be justified and supported by the best available information. Furthermore, emissions trading systems must have a monitoring, reporting and verification mechanism, which is the basis for their compliance.”

On the third day, the “REdiCAP” Regional Dialogue on carbon prices was held, where representatives from Brazil, Canada, Chile, Colombia, the European Union and the State of Querétaro in Mexico shared their progress and challenges in the implementation of carbon prices in their respective territories.

At the event, Ana Domínguez, a specialist in cooperative approaches at the Regional Collaboration Centre (RCC) of the United Nations Framework Convention on Climate Change (UNFCCC) for the Latin American region, identified key elements for the success of the various carbon pricing instruments, such as “clear communication of the system’s objectives and purposes, the involvement of key actors and multi-sector coordination with the support of the public and private sectors, the transparency of the system, and the flexibility of the market to involve local actors.”

The fourth day of the workshop focused on the presentation of the context of the Paris Agreement, the NDC ambition cycle and cooperation under Article 6, where Article 6.2, Article 6.4 and Article 6.8 were presented in detail. The importance of ensuring good financing and fostering collaboration among all actors was discussed. It was concluded that establishing a robust monitoring, reporting and verification (MRV) system is crucial to ensure the integrity of emissions reductions and build trust in both the public and private sectors.

On the last day of the workshop, expectations regarding the operation of Article 6 and its potential impact on private financing were discussed. Participants agreed that Article 6 is expected to facilitate access to private financing for climate action, under a clear and robust regulatory framework that supports these efforts.

The event’s conclusions, presented to a panel of experts, reflected a growing push in the region to implement carbon pricing, repeatedly highlighting the need to adjust upwards the carbon prices implemented in the Latin American and Caribbean region to align them with climate objectives. It was emphasized that carbon pricing policies must be integrated into economic and social development strategies to achieve positive and sustainable results.

This event has laid the groundwork for an enriching and collaborative dialogue that will significantly contribute to efforts to address climate change in Latin America and the Caribbean, building a more sustainable future for the region. The workshop underlined that international cooperation and regional collaboration are essential to advance the implementation of carbon markets and identified important challenges to move towards more inclusive, sustainable and fair development.

Participating countries and attendees at the regional event called for the workshop to become an annual event to share progress and challenges regarding carbon pricing and exchange experiences. The presentations from the workshop are available at the following link Workshop on Carbon Prices and Article 6 of the CPA and REdiCAP to review the discussions and knowledge shared, thus facilitating their access.