The aim of this paper is to set out the structural capacity necessary
for developing countries to participate in an evolving carbon market.
The main body of this paper looks at the capacity needed for developing
countries to participate in existing market mechanisms (i.e. the Clean
Development Mechanism (CDM)), taking account of the way it may change
over time; and possible new mechanisms such as large-scale crediting and
trading. This analysis will be followed by two in-depth country case
studies: Ghana and Uganda. The case studies will provide a live
illustration of the practical capacity needed for these two countries to
efficiently participate in an evolving carbon market, highlighting
current obstacles and what can be done to overcome them.
This paper takes a macro view of the capacity needs in developing
countries, differentiating between ‘low income’, ‘middle income’ and
‘advanced’ developing countries. Whilst there are exceptions, it is
generally true that advanced developing countries will have greater
capacity for adopting new market mechanisms than low income and middle
income countries because advanced developing countries are at a more
advanced stage of economic development.
Throughout the paper there are a number of recommendations promoting the
establishment of institutional bodies at the developing country level
which could help facilitate the aggregation of data, technical expertise
and other necessary capacity for increased carbon market participation.
The set up of such institutional entities will support the aggregation
of different levels of capacity and be sufficiently flexible to develop
over time with new market mechanisms as they evolve. The main body
concludes with a summary of these institutional recommendations and a
pathway analysis illustrating the capacity requirements at each carbon
market mechanism level.
Marmanie Consulting Ltd, London, UK, 30 pp.