Although the Latin America and the Caribbean region is responsible for only 7% of global GHG emissions, it has great potential for climate change mitigation. About 22% of global carbon credit issuances come from this region. This can be explained in large part by its large endowment in Natural Climate Solutions.
Aware of this potential and the capacity of market instruments to attract resources that support NDC achievement, more and more governments are evaluating, developing, or implementing local regulations on carbon pricing instruments and project development. Indeed, eight countries are involved in bilateral agreements or memorand a of understanding to develop cooperative approaches under Article 6 of the Paris Agreement: Chile, Colombia, Costa Rica, Dominica, Dominican Republic Mexico, Peru, and Uruguay.
This policy brief provides an overview of the context and the main developments in the region over recent months. Although significant progress has been made, efforts must be intensified to expeditiously scale carbon pricing instruments as one of the tools to ensure the mobilization of resources for emission reductions and removals.
