Program Overview
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Countries across the Middle East, North Africa, Afghanistan & Pakistan (MENAAP) region are increasingly aligning their climate and development strategies with updated Nationally Determined Contributions (NDCs) and Long-Term Low-Emission Development Strategies. However, progress on carbon pricing remains constrained by institutional capacity gaps, fossil fuel dependence, and energy subsidies that weaken price signals. As major trading partner of the EU, many countries in the region also face increasing exposure to the Carbon Border Adjustment Mechanism (CBAM), while, growing interest in Article 6 of the Paris Agreement and voluntary carbon markets is outpacing the institutional capacity needed to participate credibly.
Objective and Activities
The objective of the MENAAP PMI Regional Program is to strengthen national and regional readiness to design and implement carbon pricing policies and carbon market mechanisms, by building institutional and technical capacity, aligning policies with climate and trade goals, and promoting peer learning and regional cooperation. The program supports regional cooperation across three country clusters: the Maghreb, the Mashreq, and the Gulf Cooperation Council, reflecting diverse economic structures and different stages of carbon pricing and markets readiness.
Activities
The MENAAP Regional Program is structured around four interlinked components:
- Component 1: Domestic Carbon Pricing and I Domestic Resource Mobilization supports rapid diagnostics, fiscal impact assessments, and country-level options notes to support policymakers in designing and sequencing carbon pricing instruments aligned with development and revenue mobilization objectives.
- Component 2: CBAM Preparedness assesses sectoral exposure, implicit carbon pricing, and MRV gaps, producing actionable guidance and facilitating regional technical dialogue to help countries respond effectively to evolving EU carbon border requirements.
- Component 3: International Carbon Market Readiness builds regional capacity for credible participation in Article 6 and voluntary carbon markets through country readiness assessments, good practice guidance, and a regional dialgoue of designated national authorities and market stakeholders.
- Component 4: Regional Cooperation and Knowledge Exchange support innovative capacity-building modalities tailored to the MENAAP context and assesses demand for a dedicated regional platform for carbon pricing and market advisory services, positioning the region for sustained, institution-led progress.