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The Foundation supports the promotion and implementation of market based programmatic climate protection initiatives.
Within the CDM the introduction of Programme of Activities (PoA) represent a landmark decision. The programmatic approach helps to make previously untapped emission reduction potential accessible via the market and to lift the reach of market mechanisms beyond the project level to a new level. Thus, PoAs form an essential stepping stone in the evolution of new mechanisms which, through combination of national policy measures with market based certification approaches, set effective mitigation incentives for entire sectors of the economy. Today, programmatic market approaches can be integrated in particularly progressive national climate initiatives. The Foundation thus also considers funding of programmatic approaches beyond the CDM.
However, programmatic emission mitigation approaches still face difficulties in the implementation. They are subject to specific risks resulting from still unsolved regulatory deficits of the concept, shortcomings with regard to practical implementation, as well as problems related to the exploitation of micro-scale emission reduction potentials. The price decline in the international carbon markets and the slow progress in international climate negotiations bring additional risks for market based approaches.
Significant financing problems are among the most serious consequences for project developers because the actual and presumed risks are too high for potential investors. The purely market-driven establishment of the programmatic approach is therefore making slow progress.