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Defining the Carbon Pricing Instrument Road Map in the Dominican Republic
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The Ci-ACA initiative was announced during COP22 in Marrakesh and was initially established for 2 years. However, considering the demand from member countries, it was renewed in 2019 until December 2021. The initiative is purely on a voluntary basis and is jointly managed by the UNFCCC secretariat and its Regional Collaboration Centres. Under this project one of the countries supported by RCC St. George’s is the Dominican Republic. The project was launched in December 2017, when RCC St. George’s, together with The National Council for Climate Change and the Clean Development Mechanism (CNCCMDL) conducted a national consultation on the topic of carbon pricing instruments in Santo Domingo. The tools evaluated in the framework of the Ci-ACA 2.0 Dominican Republic project include the potential implementation of:

  • Carbon Tax to incentivize reducing emissions through a price signal;
  • Emission Trading Scheme with the establishment of a limit on direct GHG emissions to the identified sectors; and
  • The implementation of a market for Clean Energy Certificates, linked to the objectives of renewable energy in the Dominican Republic and their respective involvement in reducing emissions.

Those are aligning and will support the achievement of the objectives defined in the National Development Strategy and in the Nationally Determined Contribution (NDC).

On 12 August 2020, the Strategic Steering Committee for Ci-ACA 2020 presented the preliminary results from the work done interviewing key stakeholders on many aspects to define the Carbon Pricing Instrument Road Map in the Dominican Republic; 22 persons participated in the Steering Committee meeting. Introducing the session, Mr. Federico Grullón, head of Mitigation Department, from the CNCCMDL, explained the meeting objectives, expressed his gratitude for the participation of representatives of different organizations and mentioned the importance that economic instruments have for the Climate Change Mitigation Strategy MexiCO2 (the company leading the technical work in close collaboration with national consultants). He also provided an overview of the project activities and achievements, which included some preliminary results which indicate there are several positive conditions for the implementation of a carbon pricing implementation instrument in the Dominican Republic.

The project team conducted more than 32 interviews with key stakeholders on policy implementation against climate change. Most of the stakeholders consulted expressed their preference for the use of revenues of carbon pricing application (carbon tax or selling carbon emission permits) in mitigation and adaptation actions and poverty alleviation. They wanted to have more clarity on conditions of a carbon market's operations and transactions, specifically under Dominican Republic national conditions. There were some concerns raised on legislation, specifically about the use of existing legal and regulatory framework on securities versus making a new framework and governance model that included private and public entities. Also, the stakeholders highlighted synergies with the national MRV (Measurement, Reporting, and Verification) System, especially in collecting data and establishing information protection standards, as well as interoperability with other national systems and the need for impact studies to ensure driving the results. Further key areas were highlighted for the roadmap to introduce a carbon pricing scheme, these include:

  • Maintain a dialogue with stakeholders;
  • Development of impact studies on fiscal and macroeconomic indicators;
  • Assess tax burden by sectors in an economic reactivation scenario;
  • Capacity-building and institutional strengthening;
  • Comprehensive communication and awareness strategy; and
  • Share governance space to ensure the equal weighting to public-private participation.

Conscious that the current economic landscape is complex and different scenarios at the macro level are foreseen, governments and private sectors are now discussing the pathway to choose incentives to build into their economic recovery policies and to adapt to the new trends with creativity and speed. The encounter of the steering committee signalled their intent to continue considering carbon pricing as a policy tool to enrich its climate policy mix and incorporate it into their economic recovery plans and strategy.

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