Carbon payment for development

Leveraging carbon markets to enable private investments in support of the SDGs

Established in 2021, UNDP's Carbon Payments for Development Facility is a powerful catalyst for innovative public-private partnerships that curb carbon emissions and advance the Sustainable Development Goals (SDGs). Guided by Article 6 of the Paris Agreement, this framework aligns with the global commitment to combat climate change.

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GO TO CARBON COOPERATION PLATFORM

Capacity Building: ITMOs for Development

In order to target its assistance most effectively, the CP4D Facility first performs capacity gaps and needs assessments in each of the countries it supports. These assessments, which are designed to identify gaps and technical assistance needs, are carried out in close collaboration with key national stakeholders and development partners. . The results of the assessments also help to identify areas where further improvement is required to strengthen the readiness of each country to participate in cooperative approaches under Article 6.2.

Enabling
Technology

Technology and digital solutions are essential for implementing Article 6 of the Paris Agreement. They play a crucial role in facilitating and managing the exchange of ITMOs while ensuring integrity, trust, and avoiding double counting. These solutions enable transparent tracking, efficient transactions, secure data management, and real-time monitoring. By leveraging technology, buyers and sellers can confidently participate in the carbon market, ensuring accurate accounting and contributing to global climate action goals. The UNDP/CP4D Facility developed the digital Platform for Voluntary Bilateral Cooperation to support the implementation of national ITMO (Internationally Transferred Mitigation Outcomes) project implementation processes in host and buying countries.

Targeted financial incentives

Internationally Transferred Mitigation Outcomes (ITMOs) refer to a newly established framework within Article 6 of the Paris Agreement. ITMOs utilize a carbon dioxide equivalent (CO2e) metric and encompass various market provisions and other outcomes aimed at mitigating greenhouse gas emissions. Beyond emissions reductions, climate mitigation projects that generate ITMOs can directly or indirectly yield many development benefits – including job creation, access to energy, support to livelihoods and food security, gender empowerment and more. This new agreement through the CP4D Facility aims to boost the development benefits associated with climate mitigation projects. Through this initiative, UNDP is among the first to create concrete demand for ITMOs.

Within this framework, enterprises can undertake diverse initiatives such as improving efficiencies in the industrial sector, switching from fossil fuel to renewables or mitigating greenhouse gas emissions from wastewater. The idea is to generate carbon mitigation outcomes while creating value for development.

Through its implementation of Article 6, the CP4D Facility contributes to the global effort of creating a low-carbon and prosperous future, translating the principles of the Paris Agreement into tangible, financially additional actions and impactful and correspondingly adjusted results. The Facility participates actively in the annual Conferences of the Parties to the Climagte Change Convention (COPs) the apex decision-making body of the United Nations Climate Change Framework Convention (UNFCCC). For example, UNDP/ CP4D collaborated with UNFCCC, the European Bank, and the World Bank Group to participate in COP27 in Sharm el-Sheikh, Egypt, where the topic was ‘Digital MRV for Inclusive Climate Action.’