📍 Back in 2021, KAS hosted a Dialogue which considered the challenges and opportunities of implementing appropriate, inclusive and beneficial carbon pricing approaches in Least Developed Countries and Emerging Economies. More than 100 experts and policymakers from all around the Globe discussed:

• the differences between various carbon pricing approaches,
• their relative advantages and disadvantages for LDCs and Emerging Economies contexts, and
• potentially unique LDC/Emerging Economy considerations that might inform the approach to carbon pricing in such countries.

📌 Key takeaways and recommendations:

• Appropriate, inclusive and beneficial domestic carbon pricing approaches in Emerging Economies and LDC contexts must fully consider local circumstances and in-country dynamics, warranting a deeper examination of the conceptual bases and relative merits of alternative forms of carbon pricing.

• It is important to continue engaging in dialogue with relevant in-country experts and key policy decision makers to shape how notions of carbon pricing are conceived at a developed country level and experienced in developing country contexts. This would include ongoing engagement and further research to gain a better understanding the barriers that LDCs and Emerging Economies are facing when it comes to choosing, designing and implementing a carbon pricing approach.

• Dialogue participants underscored that effective carbon pricing in countries with low aggregate GHG emissions requires that greater attention should be devoted to instruments that price emissions removals and avoided emissions, such as projects supporting afforestation, reforestation and revegetation.

• Given that adaptation tends to be a greater political and climatic priority in LDCs and Emerging Economies, for carbon pricing to have political traction and public support it should be accompanied by resilience co-benefits, e.g., by supporting the planting of coastal mangrove forests to build coastal resilience to rising sea levels coupled with sequestration of emissions.

• Dialogue participants expressed the view that shadow pricing could assist LDCs and Emerging Economies in overcoming the MRV challenge by helping to build appropriately capacitated and sophisticated structures, and once successfully implemented could serve as a primer for the adoption of more complex systems over time. 

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