Authorities and experts discuss capacity building and strengthening cooperation on carbon pricing in the region

Decision-makers from more than 20 countries in Latin America and the Caribbean have been participating since Monday, July 22, in the first regional workshop on Carbon Pricing and Article 6 of the Paris Agreement, which will be held until Friday, July 26, at the headquarters of the Economic Commission for Latin America and the Caribbean (ECLAC) in Santiago, Chile.

The event is 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.

In its first edition, the workshop aims to provide an overview of the different carbon pricing instruments, with a particular focus on the implementation of Emissions Trading Systems (ETS). Carbon pricing helps to incentivize the reduction of greenhouse gas emissions and facilitate the achievement of the Nationally Determined Contributions (NDC) of Latin American and Caribbean countries.

At the opening session, Chilean Environment Minister Maisa Rojas addressed the Global Carbon Pricing Challenge, noting that carbon pricing instruments and the carbon market are key tools to foster private sector participation towards decarbonization.

“Given the importance of public and private sector leadership in climate change, it is important to establish a clear signal and regulation of these instruments to generate private sector investment opportunities and mobilize the efficient allocation of capital to meet the NDC commitments,” said the Minister.

For his part, the Officer in Charge of ECLAC’s Sustainable Development and Human Settlements Division, Carlos de Miguel, referred to the need to be ambitious in the fight against climate change, with new commitments that trigger financing, investment and transformative changes in the development model.

“Implementing carbon prices in Latin America and the Caribbean will help meet climate goals and promote sustainable development. Despite some progress, such as the implementation of carbon taxes in five countries, their application remains limited and fossil fuel subsidies outweigh climate financing,” said Carlos De Miguel.

The ECLAC official stressed the importance of coordinating efforts between ministries to internalize the social costs of emissions in investment decisions in the region.

“At ECLAC we are supporting countries in the region in setting Carbon Pricing Instruments through collaboration with different actors, including the Ministries of Environment and Finance, as well as the National Public Investment Systems. We seek to ensure that decision-making in each of these ministries is oriented towards internalizing the social costs of carbon emissions in decisions on production, consumption, investments and even in the allocation of the public budget,” he said.

Fabiana Rodrigues, Head of the UNFCCC Latin America Regional Collaboration Centre, said that “carbon pricing is a key policy tool to achieve the goals of the Paris Agreement and lay the foundations for a climate governance regime.”

“While Article 6 offers an opportunity to enhance global climate action under a level of trust that encourages investment in clean technologies, several countries are considering bilateral cooperation and voluntary cooperation permitted under Article 6, and carbon credits have been identified as having the potential to generate positive results,” he said.

Myriam Savard-Lajeunesse, Director of the Quebec Office in Bogotá, also highlighted Quebec’s strong presence in Latin America in key sectors such as the economy, education, environment and energy transition.

“On the carbon market, Quebec has introduced an internationally recognized cap-and-trade system, and we are always ready to share our expertise and explore opportunities for collaboration to develop innovative and sustainable solutions. I also think the importance of the diplomatic and technical collaborations that will take place this week is evident,” he added.

During the five-day event, the Regional Dialogue on Carbon Pricing (REdiCAP) will be held, which is aimed at sharing practical experiences and knowledge gained in the implementation of carbon pricing instruments. This initiative aligns with the broader global effort to promote carbon pricing as a crucial tool to address climate change, building on key lessons from the UNFCCC Secretariat’s Collaborative Instruments for Ambitious Climate Action (CiACA) programme, which emphasizes the effectiveness of regional exchange of experiences from national and subnational perspectives.

The event will also seek to demystify Article 6 of the Paris Agreement, offering perspectives on its opportunities, challenges, participation requirements and implications.

Finally, the workshop presented the document “Economic Policy and Climate Change: Carbon Pricing in Latin America and the Caribbean”, which provides an overview of carbon pricing in the region, as well as other associated economic policies. This document includes an examination of the state of explicit carbon prices, such as taxes and tradable emissions permit systems, as well as implicit prices, such as the social price of carbon, which is considered in the evaluation of public investment.

The first regional workshop on Carbon Pricing and Article 6 of the Paris Agreement represents a significant step in building capacity and strengthening cooperation around carbon pricing in Latin America and the Caribbean. By fostering dialogue and the exchange of experiences, participants are expected to not only increase their knowledge, but also establish lasting relationships that contribute to the effectiveness of their climate policies and the fulfillment of international commitments by Latin American and Caribbean countries. Collaboration and joint learning are essential to face the challenge of climate change and move towards a more sustainable future for the region.

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