Country Program

Building Readiness: The Nuts and Bolts of an MRP

Readiness can have cross-cutting benefits that support domestic efforts to implement low emission strategies and mitigation efforts

Participants follow six Building Blocks to create an MRP. These Building Blocks help shape a comprehensive proposal and ensure that proposals are consistent in structure, even as they are tailored to each country’s unique circumstances. Countries complete all Building Blocks, with the exception of Building Block 4, which is optional. This Building Block is reserved for countries that have already made a decision on what kind of carbon pricing instrument to implement.

Building Block 1 (BB1): The Big Picture – Country Context

BB1 is used to outline development and climate change mitigation objectives, including stock taking of a country’s mechanisms and strategy for achieving existing mitigation pledges. The goal of BB1 is to identify how and where carbon pricing could be used to achieve mitigation and to pinpoint the readiness activities that are needed to support carbon pricing.

Building Block 2 (BB2): Policy Landscape and Objectives – Preparatory Work to Support and Inform Policy Decisions

Policy interaction is important to understand prior to the introduction of a carbon pricing instrument. Countries use BB2 to assess the potential impact of mixing existing policy with proposed carbon pricing policies. This assessment can help inform policy decisions. Support from the PMR’s Policy Work stream complements BB2 by providing in-depth modeling and analytical guidance.

Building Block 3 (BB3): Core Technical and Institutional/Regulatory Market Readiness

BB3 is used to identify the core “readiness” components that a country plans to invest in as part of its PMR activities. These components also inform the Technical Work Program, which aims to address capacity gaps that are common among countries. Components vary among countries but include:

  • Data management
  • Target/goal-setting for market instruments
  • MRV
  • Registries and tracking tools
  • Cap, tax rate or baseline setting
  • Regulatory and institutional framework
  • Stakeholder engagement

Building Block (BB4): Planning for a Market Instrument – Assessment and Rationale for Focus on Sector/Program/Region Policy Decisions

Countries that have made a decision about adopting one or more carbon pricing instrument use BB4 to rationalize the selection of the sectors, sub-sectors, programs, or regions that will be targeted by the instrument. BB4 also informs the Technical Work Program’s agenda on market-based instruments.

Building Block (BB5): Organization, Communication, Consultation and Engagement

Countries that have successfully implemented carbon pricing recognize the importance of stakeholder engagement and public communication strategy when it comes to building support for carbon pricing policies. BB5 helps countries scope organize and engage in this consultation process for the activities outlined in BB2 – BB4.

Building Block (BB6): Summary of Activities, Timeline and Budget Sector/Program/Region Policy

Countries are eligible to apply for a funding grant of US$3 million, US$5 million, or US$8 million for the implementation of the MRP. Countries meet these criteria for grants of US$3 million and these additional criteria for funding of US$5 or US$8 million.

Visit Participant Process to learn more about the development and feedback process of an MRP, as well as the criteria used for funding allocation.