The Climate Challenge and International Collaboration

Tackling climate change has emerged as one of the biggest environmental challenges we face. For this reason, via the 2015 Paris Agreement,195 countries committed to limiting global warming to well below 2°C, preferably 1.5°C above 1990 levels. Achieving this goal requires a significant reduction of greenhouse gas (GHG) emissions around the world. These emissions should peak as soon as possible, and we should reach climate neutrality by the second half of this century.

Countries are free to choose policies and measures to achieve their own emission reductions as defined by their Nationally Determined Contributions (NDC), which lie at the heart of the Paris Agreement. To support the implementation of the national climate targets and restrict global temperature rises, the Paris Agreement has highlighted the significance of capacity building actions for developing countries as one key pillar in the global climate regime

Emissions Trading Worldwide

There is widespread consensus that achieving climate targets through market-based climate instruments such as emissions trading systems (ETS) offers the opportunity to reduce emissions cost-effectively, incentivise low-carbon investment, and generate sustainable development co-benefits. In 2005, the European Union (EU) introduced the world’s first major ETS. The EU ETS covers the power, industrial, and aviation sectors and regulates approximately 40% of GHG emissions in the bloc. Many countries followed this example; as of 2022, there are a total of 26 ETS in place around the world at the national or sub-national level. Another 23 jurisdictions are actively developing or considering implementing their own system. Sharing knowledge about emissions trading, its characteristics and components, and of experience gained in the implementation of existing systems is vital to support and ease implementation in aspiring countries.

Capacity Building on Emissions Trading Systems by Germany

The German Federal Ministry for the Environment (BMU) began this Capacity Building Programme on Emissions Trading (CB ETS) in 2011. Its aim is to disseminate knowledge, practical experience, and best practices on the subject of emissions trading on an international level, and to support countries in setting up their national ETS. Since December 2021, the CB ETS programme is run by the Federal Ministry for Economic Affairs and Climate Action (BMWK). Starting in 2011, the programme is now in its fourth phase that will run until 2025.

The programme focusses on the organisation, conception, and implementation of capacity building activities offered to countries around the world that are interested in, are considering establishing, or are in the process of developing an ETS. Capacity building activities can take various forms:

The programme activities target both policy makers and private sector representatives.

The programme’s syllabus consists of a wide range of modular teaching materials on all key aspects of designing and implementing an ETS. Many of the ETS experts who developed, tested, and refined the material also deliver the training sessions, building on roughly a decade of ETS training and implementation experience. The programme makes use of a comprehensive tool kit and offers tailor-made support, including interactive elements, such as roleplay activities, exercises and simulations of monitoring, reporting and verification tasks from real implementation or adapted virtual elements for online training sessions.

Under the guidance of the BMWK and in close cooperation with the German Emissions Trading Authority (DEHSt) at the German Environment Agency, long-term carbon pricing experts from the German institutions adelphi consult GmbH, FutureCamp Climate GmbH, Ecologic Institute and Öko-Institut e.V., implement the programme and its activities.