Contact Katie Kouchakji, press@ieta.org

WASHINGTON, DC, 1 June – The Trump administration’s decision to pull out of the Paris Agreement is disappointing, says IETA.

After several weeks of discussion, US President Donald Trump decided to withdraw the country from the 2015 agreement. According to the agreement’s provisions, the soonest any country can withdraw is 9 November 2020.

“The decision to pull the US out of the Paris Agreement is disappointing, but we believe other international leaders will rally to advance this hard-won international deal,” says IETA President and CEO Dirk Forrister. “IETA will continue to engage with the rest of the international community on turning the agreement’s words into action.”

He adds: “We encourage the US administration to consult with state officials and corporate leaders on an action agenda that can draw on the many successes around the country in tapping market forces for climate protection. US action remains important for the climate challenge, and it merits a market-based approach that leverages the country’s strengths of technology innovation, financial prowess and the entrepreneurial spirit.”

Contact Simon Henry, henry@ieta.org

GENEVA, 1 June – ICROA analysis of voluntary carbon market data shows that 43.5 million carbon credits were retired¹ in 2016 across the major voluntary market standards.

The total volume retired is equivalent to removing 9.3 million cars from the road for one year. However, this is a slight dip in levels from 2015 which, at 45.9 million carbon credits across the same standards, was a record high for the voluntary market.

“The voluntary carbon market continues to deliver strong results,” says ICROA Programme Director Simon Henry. “Credit retirement data is the clearest measure of the size of the market, and the data indicates volumes are very close to the record high we saw in 2015.”

ICROA’s analysis uses data from the public registries of the major voluntary market standards: American Carbon Registry (ACR), Clean Development Mechanism, Climate Action Reserve (CAR), Gold Standard, and the Verified Carbon Standard (VCS). All these standards are endorsed within ICROA’s Code of Best Practice for Carbon Management Services.

“ICROA is optimistic of future growth in the voluntary carbon market, particularly since there is an ambition gap in the Paris Agreement that requires more than has been pledged by countries so far,” Henry adds. “ICROA’s members are seeing that the private sector is willing to play a role in helping close that gap.”

“The voluntary market will still have a role to play in engaging business in the climate fight even under the Paris Agreement,” says Dirk Forrister, IETA’s President and CEO. “It allows private sector actors from all over the world to step into a leadership role and find new ways of responding to climate change. 

“There is a disconnect between where science says we need to be and how far the Paris Agreement will take us, and the voluntary carbon market will be crucial in bridging that gap.” 

NOTES 

1  A carbon offset credit is classed as retired when it is permanently removed from the marketplace, such as to voluntarily reduce or neutralise the emissions from an individual, government, corporate, or other organisation.

Contact Katie Kouchakji, press@ieta.org

BRUSSELS, 1 June – European policy-makers need to step up the pace of negotiations on reform to the EU Emissions Trading System (ETS) and reach a common position this summer, says IETA.

This week's planned meeting for the negotiations between the Council and the European Parliament to strengthen the EU ETS was delayed at the last minute. Talks are now set to resume on 27 June, with British Conservative MEP Julie Girling taking over from Ian Duncan as the Parliament’s rapporteur.

“We strongly encourage the new management to hasten the work on reform to the EU’s carbon market,” says IETA’s European policy director Julia Michalak. “Businesses are already making investment decisions for the period in which the changes will take effect and need the regulatory clarity that a compromise will bring.”

“Both the Parliament and the Council should keep in mind that more time taken for these discussions now will mean less time for work on implementation,” she adds.

More information on IETA’s position on the EU ETS Reform is available on our website.

FOR IMMEDIATE RELEASE
Contact Katie Kouchakji, press@ieta.org

BARCELONA, 24 May –  Two-thirds of respondents to IETA’s annual GHG Market Sentiment survey think that the rise of populist political movements globally are a threat to action on climate change, despite a high level of executive engagement.

Conducted by PwC, the survey of 135 IETA members from across the globe raised widespread concerns that an increase in nationalist policies could hinder an international response to climate change, with one respondent urging market participants to go on a “PR offensive” extolling the virtues of emissions trading.

However, over three quarters (77%) of respondents said that climate change is a board-level priority – and 90% said board engagement on the issue has either increased or remained the same year-on-year.

“The high of seeing the Paris Agreement enter into force last year was tempered by an increase in populist political movements that have pushed climate change down the agenda,” says IETA President and CEO Dirk Forrister. “While the changing political headwinds are cause for concern, we are encouraged by those that are stepping up to lead on climate action. Nationalism and isolationism won’t solve this global problem.”

He adds: “International collaboration is essential to drive action under the Paris Agreement and, as we saw in Bonn these past two weeks, countries are continuing to work on the rules for implementing the Agreement. High levels of board engagement with climate change and action will only boost these efforts.”

Survey respondents are more optimistic about national and sectoral efforts, such as China’s planned national emissions trading system, efforts across Canada, and a new market for aviation. In Canada, 69% of respondents expect the federal Pan-Canadian Framework on Clean Growth and Climate Change to drive action by the provinces and territories, while an overwhelming majority expect Ontario’s new market to link to those of Québec and California.

Meanwhile, respondents’ Phase III EUA price expectations have fallen slightly this year, but remains in the €8-11 range, consistent with the past four years. Expectations for prices out to 2030 also dipped, while the majority of respondents agree that a carbon price floor is needed in the EU ETS.

“When it comes to Brexit, 60% of respondents think that the UK will leave the EU Emissions Trading System. But linking UK climate policy to the EU ETS would be the most cost-effective approach according to some,” says Jonathan Grant, Director, PwC, who performed analysis on the survey.

 “EU carbon price expectations are still in the doldrums and once again IETA members have highlighted the yawning gap between current prices and what’s needed to achieve the Paris objectives. But despite global economic uncertainties, it’s encouraging to see that business is still focused on climate action and stepping up to support the Paris Agreement.”

The survey report will be released at the Pitch Hub at Innovate4Climate in Barcelona on Wednesday 24 May at 11am CET. Hard copies will be available at the launch and it can also be downloaded from the IETA website.

NOTES

This year’s IETA survey was conducted among IETA members only, with more than one response per organisation possible, and open from Thursday 30 March 2017 to Wednesday 26 April 2017. We received responses from 135 IETA member representatives, from a broad range of locations and organisation types. Participants were given some freedom to select which sections and subject matter they answered on, and therefore a number of statistics are based on samples smaller than 135.

Key findings from this year’s survey

• 64% of respondents expect populist political movements to limit action on climate change. As quoted by respondents, “emissions trading needs to go on the PR offensive and advocate its achievements more strongly or it risks being undermined during times of political uncertainties.”
• Climate change is a board-level priority for 77% of respondents. Furthermore, 90% of respondents have said that board-level engagement on climate change has either increased or remain unchanged in the last 12 months, indicating that corporates are stepping up.
• 60% of respondents expect the UK to leave the EU ETS following Brexit. Many think the UK will implement a national market but link it back to the EU ETS.
• 59% of respondents expect the EU ETS reform to be in line with the Paris goal of limiting warming to well below 2°C. However, majority of respondents think that the EU ETS needs a price floor.
• China is seen as an emerging leader on climate action: 83% of respondents expect the Chinese ETS to encourage other countries to adopt a carbon price. The majority of respondents agree that the launch of the Chinese ETS will reduce competitiveness concerns in other countries.
• State-level initiatives and the private sector are seen to continue to drive climate action in the US. Despite threats of litigation, 90% of respondents expect the California market to exist post-2025.
• Canada’s carbon markets are expected to grow: 69% of respondents expect this to be driven by the recent Pan-Canadian Framework on Clean Growth and Climate Change. Moreover, 77% of respondents think that Ontario will link its cap-and-trade programme to the California-Québec market.
• CORSIA is expected to be the second largest source of demand for international units after the Paris Agreement. Almost half of respondents think that the IMO will implement a carbon price, mainly inspired by CORSIA. 

FOR IMMEDIATE RELEASE
Contact Katie Kouchakji, press@ieta.org

BARCELONA, 22 May – IETA is proud to release its first Carbon Market Readiness Training Guide, featuring corporate experts who share their market experiences through the Business Partnership for Market Readiness (B-PMR) global outreach.

The guide, commissioned by the World Bank’s Partnership for Market Readiness (PMR), is aimed primarily at private sector actors in regions where carbon markets are planned or under development. Tackling issues such as offset strategies, competitiveness concerns, risk management, carbon accounting, and internal governance, each chapter was written by a private sector carbon market practitioner.

Each author also filmed a brief video, highlighting their chapter. The videos are available on both on the training guide’s webpage and YouTube.

“The BPMR has been helping businesses in developing countries prepare for emissions trading since its launch in 2012, and this guide is the next step in our outreach and educational efforts,” says Jeff Swartz, Managing Director at IETA who oversees the initiative. “We hope these resources will continue to be of use and value for years to come.”

He adds: “IETA’s membership has a vast and diverse experience with the world’s carbon markets to date, and many valuable lessons to share. This guide draws on their years of being at the frontline of emissions trading and the best practice solutions they have found for their businesses.” 

“For carbon pricing to be politically and operationally viable, efforts by governments and businesses cannot take place in isolation. We are pleased to be working with IETA’s B-PMR and its member companies to facilitate public-private interaction in countries pursuing such policies,” says Venkata Putti, Manager of the World Bank’s Carbon Markets & Innovation Unit, who oversees the PMR. “The training guide will be used in countries to train tomorrow’s corporate climate champions.” 

NOTES

IETA launched the B-PMR in 2012, to enhance the work of the PMR by educating the private sector in countries developing carbon markets. Through its outreach missions, the B-PMR brings representatives from businesses with experience in emissions trading in Europe, the US, Canada and Australia to share knowledge and best practice with local counterparts.

Contact: Katie Kouchakji, press@ieta.org 

BARCELONA, 22 May – IETA is proud to present its new quarterly publication, IETA Insights.

As carbon pricing efforts ramp up around the world, spurred in part by the Paris Agreement, IETA Insights will provide a regular update on the latest developments, innovative approaches to the use of market-based mechanisms to cut emissions, and best practice solutions.

“Promoting market mechanisms remains at the core of IETA’s ethos, and IETA Insights will allow us to shine a light on key developments and new ways of using market forces to fight climate change,” says Dirk Forrister, President and CEO of IETA. “This first edition also sets out IETA’s guiding principles on carbon pricing, and why we still believe market measures are the best tool to cut emissions at lowest cost.”

Other articles in this first issue include an analysis of the legal options and obstacles for the US to exit the Paris Agreement – a move we oppose. It also offers an economic review of Canada’s national carbon pricing plans, a first-hand update on the EU ETS reform negotiations, and an update on how the aviation sector is rising to the challenge.

The next edition will be released in July. For more information or content suggestions, please contact Katie Kouchakji on press@ieta.org. For sponsorship opportunities, please contact Lisa Spafford at spafford@ieta.org.

NOTES

IETA Insights replaces IETA’s annual GHG Market Report, typically published ahead of the UN climate negotiations towards the end of the year. An editorial committee, drawn from IETA’s membership, advises on the content and performs peer review. The 2017 editorial committee are: Kavita Ahluwalia, Uniper; Evan Ard, Evolution Markets; Jessica Butts, Delphi; Jean-Yves Caneill, EDF; Sophie Lu, BNEF; Mark Proegler, IETA Fellow; Judith Schröter, ICIS; Naomi Swickard, VCS; and Li Yifeng, Shanghai Zhixin. 

Contact: Katie Sullivan, sullivan@ieta.org  

TORONTO, 7 April - A ruling in favour of allowance auctions in California’s emissions trading system is a welcome boost to confidence as it provides market clarity, says IETA.

The state’s Court of Appeals ruled yesterday that the sale of allowances for California’s cap-and-trade system at auction do not constitute a tax, upholding an earlier court ruling that rejected the claim by the California Chamber of Commerce.

IETA had filed an Amicus supporting the State position, asserting that allowances are different than taxes in their legal nature. The Court’s ruling found a number of distinctions between emissions trading and taxation, consistent with IETA’s arguments.

“The purchase of allowances is a voluntary decision driven by business judgements as to whether it is more beneficial to the company to make the purchase than to reduce emissions,” the court wrote in its opinion.

“The court’s ruling will go a long to increase confidence in the market,” says IETA President and CEO Dirk Forrister. “This allows it to continue as it has been, without the specter of a rollback of auctions hanging over the program.”  

California’s cap-and-trade program began in 2012, covering large power and industrial facilities, before broadening coverage in 2015 to include fuels. 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. 

“The Court’s judgement is a significant hurdle jumped," says Katie Sullivan, Managing Director for IETA. “There is a big and welcome sigh of relief – not only among California market participants, but also across current and future North America markets.

“While there is still the possibility that petitioners will pursue a California Supreme Court ruling, in the meantime we can get back to business with a bit more confidence.”

Contact: Katie Kouchakji, press@ieta.org

BRUSSELS, 4 April – The next step in the EU ETS reform process gets underway today, as discussions begin on a compromise package between the European Parliament, the Council and the European Commission.

The so-called trilogue aims to conclude before the European legislative summer recess in July.

Commenting on the start of the talks, IETA’s European policy director Julia Michalak says:

“We are encouraged by the momentum from action this year in the European Parliament and the Council. We urge policymakers to complete work on the compromise promptly, which will help Europe advance its climate leadership and boost market confidence.

“Maintaining a strong EU ETS as the cornerstone of Europe’s climate change action agenda must be at the heart of the package, combined with measures to ensure that European businesses do not face a competitive disadvantage in the future.”

BRUSSELS, 1 March - IETA welcomes European environment ministers’ adoption of a position on the EU ETS reform, and urges the European Parliament and Council to finalise work on the EU’s carbon market review promptly.

Environment ministers agreed yesterday evening to double the rate at which the Market Stability Reserve withdraws surplus allowances from the market for five years, and from 2024 onwards to annually cancel a number of allowances held in the Market Stability Reserve. That number would be the difference between the number of allowances in the reserve and the number of allowances put for auctioning the previous year.

They also approved a decrease in the share of allowances to be auctioned by 2% and agreed that partial compensation for indirect EU ETS costs by Member States is desirable. Such measures further strengthens the protection of European industry against the risk of carbon leakage.

“IETA is pleased that the Environment Council endorsed measures we have been supporting, such as doubling the Market Stability Reserve intake rate, combined with increased protection for European industry at risk of carbon leakage,” Dirk Forrister, CEO of IETA, said today.

“As the European Parliament and the Council share views on these key matters we are hopeful that work on the EU’s carbon market reform can be completed soon”.

“Yesterday’s decision is a big step towards finalising work on market reform that aims to strengthen the system for years to come,” said Julia Michalak, IETA’s EU Policy Director. “The doubling of the MSR’s intake rate will help deliver a smooth transition over time and a better balance between supply and demand."

“These reforms put Europe in good company. Many other jurisdictions are taking action this year. From California to Korea, China and Canadian provinces, governments are developing their own market programs to deliver their commitments to implement the Paris Agreement and maintain their own competitiveness,” Forrister said.