1. Background
The Regional Collaboration Centre for East and Southern Africa (RCC EAS Africa) with financial support from the Collaborative Instruments for Ambitious Climate Action (CIACA) project, would like to hire a short-term consultant to develop a sector-wide National Carbon Market Strategy for Ethiopia. Launched during COP22 in Marrakesh, the CI-ACA project was started with an initial period of 2.5 years from 2017 to mid-2019, with the objective to support Parties in the development of carbon pricing approaches for implementing their Nationally Determined Contributions (NDCs) under the Paris Agreement while fostering collaboration. The project was extended for a second phase, covering the period from July 2018 to December 2020 and a third phase, covering the period from June 2022 to December 2024.
The initiative is voluntary and does not create obligations for jurisdictions supported or for its donors. It is currently funded from voluntary contributions provided by the Government of Germany. The initiative is jointly managed by the United Nations Framework Convention on Climate Change (UNFCCC) secretariat and its Regional Collaboration Centres (RCCs). Under the overall guidance from
the CIACA Team in Bonn, RCC EAS Africa will work directly with Ethiopia’s Ministry of Planning and Development (MoPD) and the consultant to ensure smooth execution of this assignment.
2. Context
A growing number of Parties are considering carbon pricing instruments as an approach for implementing their climate action under the Paris Agreement, even among those which did not mention carbon pricing instruments in their NDC proposals. In its updated NDC, Ethiopia has an emissions reduction target of 68.8% by 2030, and the implementation of the NDC will require USD 316 billion (20% unconditional and 80% conditional financing).
Participation in carbon markets is one of the strategic and innovative financing instruments to raise revenues domestically that can accelerate action and advance global climate ambition. Against this background, Ethiopia is seeking to develop a national carbon market strategy as a guiding document to effectively enable its participation in global carbon markets thereby maximize carbon market opportunities, including Article 6 of the Paris Agreement. The strategy will complement existing policies and efforts such as the Climate Resilient Green Economy (CRGE) Strategy, Ten Year (2021-2030) Development Plan, National Non-Motorized Transport Strategy, Green Legacy Initiative thus position the country to achieve its NDC/LT-LEDS targets.
3.Objectives and Scope of work
The primary objective of this assignment is to develop a national and sector-wide carbon market strategy for Ethiopia to guide its participation in global carbon markets. Specifically, the assignment will;
• Establish the foundation for developing a National Carbon Market Strategy with clear objectives, guiding principles, safeguards, and requirements for participation in international carbon markets.
• Analyse and assess the country’s National policy and governance landscapes in light of the implementation of national carbon market strategy and thus provide recommendation for necessary policy, institutional and governance framework, institutional and operational arrangements, institutional, and technological capacity needs and gaps towards implementation of the National Carbon Market Strategy.
• Analyse the country’s readiness and extent to which it could engage in international cooperation under Article 6 (using national vs. international markets).
• Provide recommendations for necessary institutional and operational arrangements for the national participation in international carbon markets including Article 6.
The Consultant shall be responsible for the following tasks:
a) Work plan and approach
• The consultant will, upon signing the contract, hold a kick-off meeting with the project team to present the workplan highlighting his/her understanding of the task at hand, methodological approaches for successful execution of the necessary tasks and to agree on timelines for submitting the expected deliverables.
b) Inception meeting/ capacity building workshop
Assisted by the Ministry of Planning and Development, the consultant shall organize a physical capacity building workshop to introduce the assignment to participants and solicit their feedback, provide training on carbon market mechanism s and outline the necessary steps to be followed while gathering the requisite information. For inclusivity and ownership of the process, the consultant will ensure that stakeholders’ input obtained at this workshop is
incorporated in the execution of this task as possible.
c) Desk review
The consultant will;
• conduct a country assessment and analyze Ethiopia’s current greenhouse gas (GHG) emissions profile.
• review Ethiopia’s climate-related policy documents, governance frameworks, identify gaps and propose ways in which the country can effectively participate in global carbon markets, including the Article 6.2 framework and the Article 6.4 mechanism.
• review the alignment and any inconsistency of the policy documents, legal frameworks, and initiatives specific to carbon market engagement as a whole.
• assess the country’s carbon market portfolio, potential mitigation activities eligible for generating carbon credits, market opportunities available, ongoing initiatives to promote low-carbon technologies and practices, and prioritized sectors in the NDC/LT-LEDS.
• highlight the technical elements, e.g., specific guiding procedures/principles necessary to participate in carbon markets, including but not limited to, the project cycle, requirements, and processes for reporting to ensure environmental integrity.
• indicate potential readiness considerations that among other things include institutional arrangements, processes for activity approval, registration and authorizations, infrastructure or accounting tools for tracking and monitoring transfer of Internationally Transferred Mitigation Outcomes (ITMOs) to avoid double counting and enhance transparency.
• review international practices and lessons from other countries’ experiences and existing carbon market mechanisms and arrangements, with a view to making recommendations to suit the Ethiopian context.
• engage directly with technical experts throughout the entire development process of the national carbon market strategy, to empower them and develop their skills and knowledge.
d) Draft Carbon Market Strategy
The consultant shall ensure that the following elements are included in the draft:
• Strategic considerations, i.e., level of interest or willingness by the country to engage in global carbon market, including Article 6, and how this aligns with existing policies (e.g., national policy, NDC and LT-LEDS).
• High level eligibility criteria, i.e., participation requirements, prioritization of sectors and activity coverage, financial procedures/fees structures, processes for approval and authorization, technical guidelines on safeguards principles and risk management (e.g., overselling), legal and regulatory framework in terms of existing laws, regulations, rules, policies, and guiding principles.
• Institutional arrangements and governance structure (e.g., roles, mandates, oversight functions and tasks of each relevant ministry), private sector and third-party actor engagement including their responsibilities in Article 6 implementation process.
• Infrastructure such as tracking systems (e.g., registry), MRV data management tools to track mitigation outcomes to ensure compliance with reporting obligations.
e) Stakeholder engagement and Consultation/Validation workshop
• The consultant, supported by the MoPD, will engage with CRGE ministries to collect information and data vetted with the responsible ministries from the outset of the strategy development process.
• The consultant, assisted by the Ministry of Planning and Development, will then map out and identify key sectoral representatives from government, civil society, and private sector to provide the data and information during the preparation of the strategy.
• The consultant in close consultation with the MoPD, will organize a physical consultation workshop at which he/she will present the draft Carbon Market Strategy for stakeholders’ inputs, feedback, and comments.
f) Submission of final report
• Upon successful completion of the validation workshop, the consultant shall submit a final report containing comprehensive, consolidated, and synthesized information on elements reviewed and information obtained from stakeholders. The report also includes an electronic copy of the National Carbon Market Strategy itself, needs and gaps towards implementation of the National Carbon Market Strategy, with recommendations on how Ethiopia can effectively participate in global carbon markets.