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TABLE OF CONTENTS

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UNLOCKING GLOBAL EMISSION REDUCTION CREDIT

Guidance for Countries in Assessing ERC Projects

1. Introduction to Emission Reduction Credits

• The World Bank's Emission Reduction Program

• Emission Reduction Credits

•Classification of Emissions Reduction Credit

• Policy Context of Emissions Reduction Credit

2 . Objective of the Guidance for Countries in Assessing ERC Projects

• Objective of Project Preparation Guidelines

• Introduction to the Project Assessment Framework

• Process to Conducting Assessments

3. Determining Country Inputs

• S1: Green Economy Priorities

• S3: Article 6 Readiness and Eligibility

4. Conducting the Initial Profiling and Making a Preliminary Decision

• F1: Project ERC Value

• F2: Additional Value Enabled by Project

• C1, C2, and C3: Carbon Integrity and Environmental and Social Risk Management

• S2: Socioeconomic Value

5. Conducting the Project Assessment and Making the Final Decision

• F1: Project ERC value and F2: Additional Value Enabled by Project

• Q1: MRV Infrastructure

• Q2: Marketing, Sales, and Pricing

• Q3: Project Governance and Structure

• C1: Carbon Integrity

• C2: Environmental Risk Management

• C3: Social Risk Management and Benefits

• S2: Socioeconomic Value

6. Further Guidance for Application

• Market-Driven Factors

• Country Context-driven Factors

• Considerations for Future Scope

Abbreviations: Guidance for Countries in Assessing ERC Projects

Appendices:

• A: Project Profile Template

• B: Project Assessment Template

• C: PPP Models for ERP

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Considerations for Future Scope

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On this page: In future, a more in-depth review can be built into this Guideline to expand the scope of the assessment to include these analyses, where more resources and expertise will be required. Read more below, or visit Strategic Guidance for Country System Assessments, Guidance for Countries in Assessing ERC Projects, or Mobilizing ERC Finance.

Further due diligence and technical review

As this Guideline is intended as a preliminary exercise to assess the value and preliminary viability of ERC projects with strong potential of fetching high value and attracting high demand, the assessment process does not include a full due diligence that covers transaction and business activity legality. The assessment also does not involve undertaking a technical review of a given project’s carbon integrity. In future, a more in-depth review can be built into this Guideline to expand the scope of the assessment to include these analyses, where more resources and expertise will be required. Conducting due diligence on the project’s transaction and business activity legality, for example, could involve the use of third-party services. The inclusion of this scope could be important in scenarios where countries are looking to invest into ERC projects or create financing instruments for ERC projects where counterparty risks should be more thoroughly assessed. On the other hand, conducting a technical review of a given project’s carbon integrity will require carbon accounting and methodology expertise with experience in the MRV of ERC projects, in addition to the review by VVBs, that might be more impactful for countries looking to support the development of high-quality ERC projects to build capability and increase knowledge and expertise in-country.

Based on new or updated requirements and criteria stemming from Article 6

Similar to the considerations around Article 6 developments for rating strategic national alignment inputs, the scope of the project assessment process may also need to evolve alongside such policy changes. For example, additional factors may be important for Country inputs (S1) used for Step One (Initial profiling). ERC projects with CA eligibility may also fetch a higher price or set a market standard for credit quality that should be reflected in the Project ERC value (F1) and Carbon integrity (C1) criteria.

Note(s):

This section is intended to be a living document and will be reviewed at regular intervals. The Guidelines have not been prepared with any specific transaction in mind and are meant to serve only as general guidance. It is therefore critical that the Guidelines be reviewed and adapted for specific transactions. Unless expressly stated otherwise, the findings, interpretations, and conclusions expressed in the Materials in this Site are those of the various authors of the Materials and are not necessarily those of The World Bank Group, its member institutions, or their respective Boards of Executive Directors or member countries. For feedback on the content of this section of the website or suggestions for links or materials that could be included, please contact the Public-Private Partnership Resource Center at ppp@worldbank.org.