The carbon market was set up in 2005 by the Kyoto Protocol to help industrialized countries reduce their greenhouse gas (GHG) emissions at the lowest cost possible. Three flexibility mechanisms have been established: the GHG Emissions Trading Scheme, Joint Implementation (JI) and the Clean Development Mechanism (CDM).
The CDM, which concerns developing countries, made it possible to carry out 7578 projects and avoid the emission of 1.5 billion TECO₂ in 94 countries.
The collapse of carbon prices has prompted the emergence of other carbon markets in several countries on the basis of the specificities of the economic and climate policies of each country. About forty countries have been engaged in the development of new carbon market tools covering 7 billion CO₂ emissions, or 12% of global GHG emissions.
The adoption of the Paris agreement on 12 December 2015 made it politically possible to engage the 188 countries in the setting of quantified GHG reduction targets to contain the increase in temperature below two degrees. More than 50% of the specified national contributions (NDCs) submitted to the UNFCCC referred to the use of the carbon market as a means to achieve their GHG reduction targets.
The Paris agreement also foresees two new market-based approaches: ITMOs (Internationally Transferred Mitigation Outcomes) and the Mechanism for Sustainable Development.
With the ratification of the Paris agreement on 17 October 2016, Tunisia confirmed its ambitious commitment to reduce its carbon intensity by 41% in 2030 compared to 2010.
The use of the carbon market represents for Tunisia, as announced in its NDC, an important leverage tool for achieving mitigation targets by encouraging the investment in low-GHG technologies in priority sectors such as electricity generation, cement production and building sector.
To this end, Tunisia is currently seeking to identify and implement the enabling activities enabling it to use market mechanisms. In this context, the PMR is an opportunity to support Tunisia in this process.