Contact: Katie Kouchakji, press@ieta.org  

TORONTO, 22 September – A planned link between Ontario’s nascent carbon market and those of California and Québec is a positive step forward for North American climate cooperation and expanding regional carbon markets. 

The agreement to link, formally signed today, is planned to be made in 2018. Ontario’s economy-wide cap-and-trade program, launched earlier this year, was designed to link to California and Québec’s existing greenhouse gas market. 

“Sub-national climate change action continues to go from strength to strength across North America,” says IETA’s CEO and President Dirk Forrister. “The trilateral link between Ontario, Québec and California is major step forward and embraced by business on both sides of the Canadian-US border.”

At the core of IETA’s mission is the call for linked carbon markets. Such connectivity offers greater flexibility to market participants, which results in lower costs for compliance – and thus households and consumers – as well as the opportunity to achieve greater emissions cuts at a lower cost than if jurisdictions operate unilaterally. 

“The last two years have seen a surge in carbon pricing initiatives, not just in North America but globally,” says Katie Sullivan, Managing Director of IETA. “With this increased activity, we are seeing more interest in linking markets, as policymakers recognise the benefits of a wider and deeper marketplace.”

She adds: “IETA has long advocated for linked markets – this development is a significant milestone for carbon markets, cooperation and climate leadership in North America.”

To keep up to date with IETA’s work, follow us on social media. IETA has accounts on Instagram, LinkedIn and Twitter.

LONDON, 20 September – IETA is today launching a facility to gather business thoughts on how Article 6 of the Paris Agreement should be operationalised.

The web facility, added in the course of an overhaul of IETA’s website, was designed in response to observers being excluded from the formal UNFCCC submission process on the implementation of Article 6, which itself relates to market mechanisms. The publically accessible portal is launching with six submissions already, and will be open for further proposals in the run up to COP23 in Bonn.

“Observers, and the business community in particular, have a lot to add to the UN climate process, particularly with regards to Article 6,” says Dirk Forrister, IETA’s CEO and President. “There is a wealth of thought leadership and experience among observers that we need to draw on if the Paris Agreement is to be a success.”

Over the coming weeks, the information gathered via this facility will further inform IETA’s work on Article 6. IETA plans to produce a synthesis report of all submissions received, aimed at drawing governments’ attention to the unique insights the business community has to offer.

To keep up to date with IETA’s work, follow us on social media. IETA has accounts on Instagram, LinkedIn and Twitter.

Contact: Katie Kouchakji, press@ieta.org  

BRUSSELS, 13 September – EU negotiators made progress tonight in talks to strengthen the bloc’s carbon market, a development which will build confidence in the long-term operations of the system, says IETA.

Representatives from the European Parliament, the Council and the European Commission reached a conditional agreement on doubling the rate at which surplus emissions allowances will be removed from the market and placed in the Market Stability Reserve during the first five years of operation – a proposal which IETA supports.

To address competitiveness concerns of trade-exposed industries, EU leaders also made progress on a set of measures: dynamic allocation, maintaining the current list of sectors at risk of “carbon leakage” until 2020, and rules for carbon leakage assessment at sectoral level.

Negotiators also reached a provisional compromise to allow Member States to cancel allowances voluntarily when other national measures cause electricity generators to shutter, adding surplus to the carbon market. This aims to address the concern raised by IETA and other business groups about the need to address market impacts caused by overlapping policies.

IETA welcomed tonight’s breakthrough, which came after several months of stalemate in the negotiations. Several issues still remain under discussion and the negotiations are not yet finalised, with further talks scheduled for 12 October.

“The progress achieved is a welcome step towards enhancing the effectiveness of the EU ETS,” says Julia Michalak, IETA’s Director of EU Policy. “Parties should seize the momentum to bring the negotiations on EU ETS reforms to a swift conclusion. We urge European policymakers to accelerate their negotiations and finalise the EU ETS reform process well ahead of the UN climate talks in Germany in November.”

She adds: “European businesses need certainty and clarity, and they need these sooner rather than later. Business plans and financial decisions are already being made for beyond 2020, which will be impacted by these reforms.”

Contact Katie Kouchakji, press@ieta.org

BRUSSELS, 13 September – In developing measures adopted to buffer the bloc’s carbon market from a so-called hard Brexit, policymakers should make every effort to promote market stability and build confidence in the EU ETS.

Today, the European Parliament will hold a plenary vote on amendments to legislation underpinning the aviation sector’s involvement in the EU ETS. One proposed amendment seeks to ensure that any allowances issued by the UK from 1 January 2018, to any EU ETS participants, will be nullified if the UK will not remain a part of the EU ETS after it quits the bloc.

While still analysing the full ramifications of the proposed amendment, IETA is firm in its belief that a hard Brexit would work to the detriment of the EU ETS. By dividing the currently harmonised market, a hard Brexit would add complexity in compliance and impair market functioning, reducing the economic efficiency of the programme. This is why IETA broadly promotes market solutions that extend across international borders, so that the long-term effort to meet Paris goals can be cost effective.

IETA urges all policymakers to ensure that any measures adopted ensure stable market performance and sustain confidence in the market. IETA is concerned that the proposed amendment offers few details on critical features regarding its operation, making it complex to analyse.

Julia Michalak, IETA’s Director of EU Policy, comments:

“We appreciate that lawmakers are considering how to mitigate the impact of a ‘hard’ Brexit on the EU ETS. Given that this proposal, if adopted, would have a significant impact, we urge the European institutions to urgently clarify how it would be implemented without disrupting market performance. We also call on the UK Government to provide clarity on whether the UK intends to remain a part of or linked to the EU ETS, which would be the preferred solution until the current trading phase ends in 2020 – and ideally beyond.”

IETA stands ready to work with lawmakers to ensure that post-Brexit arrangements do not undermine the smooth functioning of the market.

More information on IETA’s position on the Brexit arrangements is available on our website.

Contact: Katie Kouchakji, press@ieta.org  

LONDON, 16 August – IETA welcomes today’s agreement to link the Swiss and EU carbon markets. It may offer a model for other systems to connect to Europe’s market in the future. 

Under the agreement, participants in the EU ETS will be able to use Swiss allowances for compliance, and vice versa.

“Today’s development is a welcome step, both for the EU ETS and proof of concept for linking,” says IETA’s CEO Dirk Forrister. “This first link by the EU ETS to another market is an important milestone for the 12-year old market. The agreement could act as a template for other systems to connect to the EU ETS more quickly.”

He adds: “IETA has long called for markets to link, as a wider pool of participants can lead to lower prices, greater market stability and improved liquidity. The linkage of carbon markets is good both for the environment and for businesses.”

The five-year technical negotiations between the two parties concluded in 2016, and work began on an agreement and criteria for linking. Today, the European Commission adopted a proposal to sign the agreement and another to ratify it. The Council of the European Union will now need to discuss the proposals, and the European Parliament needs to consent to their signing.

Upon signing, technical arrangements for the linkage will be made. Only once these are complete will the agreement be ratified. After ratification, the agreement will enter into force at the start of the following calendar year. Linkage is not expected to take place until at least 2019. 

Contact: Katie Kouchakji, press@ieta.org  

LONDON, 26 July – Proposed reforms to the New Zealand Emissions Trading Scheme (NZ ETS) will create a more dynamic market and offer business more clarity over the system’s future, IETA says today.

The government today announced the final changes it will seek to the market’s design, following a comprehensive two-phase review of the NZ ETS. The first phase of changes were announced last year. Today’s announcement concerns the second part of the review.

The four changes the government has agreed are to: introduce auctioning; allow international units again from 2020, but with restrictions; introduce a different price ceiling, replacing the current NZ$25 (US$18.57) fixed price option for participants; and make decisions on the supply for the NZ ETS on  a five-year rolling basis.

“The changes proposed by the New Zealand government will make the market more flexible, adaptable to changing circumstances, and more predictable,” says Dirk Forrister, IETA’s CEO and President. “Enhanced clarity over the future of the NZ ETS is good for businesses which are making decisions about tomorrow’s investments today.”

The NZ ETS began in 2008 and was the first carbon market in the Asia-Pacific. This is the second review of the programme since its inception, and the most extensive changes to its design. These changes, pending further consultation over the next 12-18 months, will make the market more readily able to link to others internationally.

“IETA supports changes to make the NZ ETS more dynamic and outward looking,” says Stefano De Clara, director of international policy at IETA and coordinator of the Australia and New Zealand working group. “The proposals will align the market more closely with the Paris Agreement and strengthen New Zealand’s leadership role on carbon markets internationally.”

TORONTO, 18 July – The California state legislature’s approval to extend the state’s cap and trade law until 2030 is a welcome boost for market confidence, says IETA.

The state Senate and Assembly approved the extension of the market last night. In a bipartisan vote supported by two-thirds of each body, the approval brings to an end months of uncertainty over the market’s future and gives clarity to businesses operating in the state.

“We applaud the effort by California Democrats and Republicans to secure passage of the legislation to continue the state’s carbon market until 2030,” says Dirk Forrister, IETA’s CEO and President. “Business needs clear rules and predictability, and that is what the California state policymakers have provided.”  

California’s cap-and-trade program began in 2012, covering large power and industrial facilities, before broadening coverage in 2015 to include transportation fuels and natural gas. Today, the program caps 85% of the state’s total emissions. In 2014, it linked with Québec’s market, and it is expected to link to Ontario’s new cap-and-trade program in 2018. Other jurisdictions, such as Oregon, Nova Scotia and Mexico, are eyeing a link as well.  

“Now that we have clarity on California’s future direction, efforts to expand the reach of the linked market can ramp up,” says Katie Sullivan, Managing Director for IETA. “There is a great opportunity to build a market with sizeable impact – one which can lead to meaningful emissions reductions at a lower cost than if each jurisdiction acted alone.”

She adds: “IETA is ready to support the next wave of carbon markets in North America, and to help business uncover new opportunities in the low-carbon future.”

LONDON, 5 JULY - IETA congratulates the Pacific Alliance countries of Chile, Colombia, Mexico and Peru on the Cali Declaration, signed at their Presidential Summit on 30 June. The formal declaration seeks to strengthen regional climate action and cooperation, including the explicit move towards a regional voluntary carbon market.

“We applaud Presidential leadership across these four countries for establishing an impressive high-level mandate to cooperate on greenhouse gas Measurement, Reporting and Verification (MRV) and voluntary market mechanisms to tackle climate change,” said IETA President and CEO, Dirk Forrister. “This initiative could lay the groundwork for deeper regional cooperation on carbon pricing to emerge – not only across Latin America, but also beyond”. Associate members of the Pacific Alliance currently include Australia, Canada, New Zealand and Singapore.”

To date, more than 40 countries are implementing carbon pricing policies, according to the advance brief of the World Bank’s Carbon Pricing Watch 2017. Chile, Colombia and Mexico are the first three countries in Latin America to enact carbon pricing policies. Mexico has announced plans to launch a national pilot emissions trading system in 2018.

“We hope that cooperation through the Pacific Alliance, and facilitated by the new Cali Declaration initiative, will lead to successful carbon pricing policy alignment and convergence of a regional carbon market in Latin America and around the Pacific Rim,” added Katie Sullivan, IETA Managing Director of the Americas.

Download a PDF version of this press release.

Contact: Katie Kouchakji, press@ieta.org  

LONDON, 14 June – IETA regrets to announce that Jeff Swartz, Managing Director, is leaving the organisation.

Jeff has been a part of the IETA team since 2011, spearheading our work on international climate policy, China and the Business Partnership for Market Readiness (B-PMR). He was instrumental in our work on how market mechanisms could be included in the Paris Agreement, which contributed to Article 6 of the final agreement.

He will be leaving at the end of August to take up a post with South Pole Group as Director for Climate Policy and Carbon Markets.

“Jeff has made a tremendous contribution to IETA, notably through his work in the run up to the Paris climate talks and via the B-PMR, which has opened the door to IETA in many new countries,” says Dirk Forrister, IETA’s President and CEO. “We wish Jeff all the best for his next move, and look forward to continuing to work with him as an IETA member.”

IETA is recruiting now for his successor. The job posting is available on our website and the deadline for applications is 28 June.

Contact: Katie Kouchakji, press@ieta.org  

WASHINGTON, DC, 6 June – IETA applauds the formation of the US Climate Alliance, a bipartisan coalition of governors from across the country.

Following last week’s announcement by President Donald Trump that the United States will be withdrawing from the Paris Agreement,  the governors of 12 states, along with Puerto Rico, have announced their intention to work together to further climate actions.

This builds on existing state efforts, including California’s carbon market and the north-east’s Regional Greenhouse Gas Initiative (RGGI) cap-and-trade system for power generators. Both of these efforts were formed in the wake Federal inaction on climate change.

“RGGI states and California joining with several others to form the US Climate Alliance provides an opportunity for their existing state carbon markets to expand and potentially converge,” says IETA President and CEO Dirk Forrister. 

“These governors recognise that businesses and governments working together can tackle the climate challenge as we continue to grow our economies and create jobs. IETA and its business members stand ready to help states take the lead and make the most of the opportunities before us.”