About us
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.
In establishing the Foundation Future of the Carbon Market, BMUB in conjunction with KfW has now created a facility that makes it possible to provide start-up finance for a limited number of exemplary programmes. Since we want programmatic initiatives to be realized as a self-funding market instrument without subsidies, the start-up finance shall be repaid by subsequent delivery of emission certificates.
The Foundation strives for demonstrating that the development risks can be overcome and that problems arising from implementation by market actors can be resolved. The Foundation is therefore seeking to collaborate with market actors from the beginning.