Objective of Country Assessment Guidelines

These Guidelines are primarily intended to provide governments with a strategic and holistic understanding of how the demand-side participants of the global emission reduction credit (ERC) markets perceive local policies and institutions in their ability to support the generation of high-quality ERCs. For this reason, these Guidelines take the view of parties, across both private and public entities, intending to invest in or purchase emission reduction credits from the target country and lay out the policy and institutional components that will be critical for such parties to make their investment and purchase decisions.

As set out in Introduction to the Country System Assessment Framework, the process of conducting the Country Assessments requires inputs and data from multiple sources and stakeholders. The Assessment will start with a baseline of the country’s participation in the global ERC markets, as well as establishing an in-depth understanding of the country’s current legal and institutional frameworks. This baseline will consider under which crediting mechanisms - whether international, domestic, or independent - local ERC projects are able to register to access international ERC markets, to determine which components of the framework are most important to make the country an attractive source for the global ERC market. The assessment is followed by recommendations for policy actions and a proposed roadmap for the country to implement a reform program to maximize benefit from the sale of ERCs to the global markets. Stakeholder engagements are recommended throughout the process to ensure that the right data is used, and to ensure that the local context is continuously incorporated.

After completing the Assessment for the first time, country governments are recommended to utilize these guidelines and conduct the assessment process on a periodic basis and as part of a continuous reform program to test its ongoing implementation and achievements. The periodic review will enable the implementing institutions in the government to (1) objectively gauge progress against the aims set out in the policies enacted; (2) enable an understanding of how new policies or reforms (such as new Article 6 mechanisms and/or trade agreements) may impact how the country’s overall landscape is perceived by the global markets; and (3) produce a refreshed view of policy actions needed as the markets continue to evolve.

These Guidelines are recommended for use by governments to support climate financing objectives, in relation to the carbon markets. Hence, they are intended to be complementary to the different programs and initiatives offered by the World Bank in relation to climate policy and financing, including: