Peru seeks World Bank carbon market support
SAO PAULO, Oct 30 (Reuters Point Carbon) - Peru's government has requested technical and financial support from the World Bank to support its plans to study the adoption of a greenhouse gas emissions trading system, according to official documents.
The South-American country requested support from the World Bank's Partnership for Market Readiness (PMR), an initiative that provides financing and technical assistance to countries to explore market tools to cut their carbon emissions.
Peru has turned to the PMR at a time with the European emissions trading system, the world's biggest carbon market, struggles with excess supply and the U.N. carbon offset market fetches all-time low prices.
Peru and more than a dozen developing countries who have received PMR support have shown they are still willing to explore carbon markets as an option for climate mitigation.
The Andean country is the 16th seeking to enter the World Bank's initiative, despite the fact that the the PMR had an initial target of issuing 15 grants.
"Given the level of interest, the PMR secretariat is currently exploring options for expanding participation beyond 15," said the World Bank in a statement.
Peru asked for support on "research and design of an (emissions trading system) ETS, including the appropriate type, scope and scale."
The country also wants to evaluate complementary mechanisms, such as scaled-up crediting.
If accepted, Peru would be the sixth Latin-American country to have support from the PMR to evaluate market mechanisms to reduce emissions.
Brazil, Chile, Colombia, Costa Rica and Mexico have already received PMR support.
The government will explore how to use market mechanisms in three major sectors - land use, transportation and energy.
Peru holds 13 percent of the Amazon rainforest, or roughly 70 million hectares, and although 50 percent of its emissions come from land use and deforestation, a growing share of emissions is coming from the energy and transport sectors.
Peru also said it wants to establish a monitoring, reporting and verification system (MRV) to track emissions, with a registry system consistent with the requirements of international carbon markets. (Reporting by Marcelo Teixeira; Editing by Valerie Volcovici)