Contact Katie Kouchakji, press@ieta.org 

BONN, 23 October – Commenting on the close of this week’s climate negotiations in Bonn, Germany, IETA’s Director of International Policy Jeff Swartz says:

“We welcome progress made this week on advancing the text for the Paris agreement, despite divisions over climate finance. Parties managed to focus on the job at hand, and made headway on the negotiating text for Paris.”

“IETA is particularly pleased to see a more robust section on mitigation that clarifies the market provisions.  It now makes clear that countries can cooperate on markets with proper accounting of transfers, and it sets policy to avoid double-counting of emissions reductions. It also creates a sustainable development crediting mechanism. All three of these provisions are similar to what we and 19 other business groups called for at the start of the week in a letter sent to more than 90 governments.  

“There are also several references to ‘international transferrable mitigation outcomes’, which is in line with what IETA has been proposing to governments for more than a year. This new text is a solid basis to work from going in to the Paris talks in five weeks’ time.”

The new text is available on the UNFCCC website.

Contact Katie Kouchakji, press@ieta.org

LONDON, 20 October – Business-focused organisations and associations from around the world joined forces today to call on governments to ensure that the Paris climate change agreement supports international cooperation through market-based measures.

In a letter issued to more than 90 governments at the start of negotiations in Bonn this week, the group¹ urged ministers to include elements to undergird markets in both the Paris Agreement and Decisions relating to the deal. The letter was sent to Ministers in the US, China, India, Indonesia, Russia, the EU, Canada, Mexico, South Korea, Brazil, along with more than 80 other countries. A copy was also sent to UNFCCC Executive Secretary Christiana Figueres.

The letter came in response to a new draft that the Co-Chairs of the ADP talks released earlier this month. Their proposed texts made significant strides in consolidating the core elements of the agreement into a few short pages. However, the draft contains few provisions to support the use of market mechanisms. For example, the Agreement text lacks clear rules on how to account for international emissions reduction unit transfers between countries. Similarly, their proposed draft Decisions include a mention of a potential crediting mechanism for emission reduction projects, but it is conditioned on future decisions before becoming operational.

“Businesses around the world remain concerned that, at this late juncture of the negotiations, important market provisions remain unclear,” says Dirk Forrister, IETA’s President and CEO. “Given the need to ensure any future climate change policies achieve their objectives while keeping costs down, market mechanisms need to be part of the solution.”

“Carbon pricing is one of the most powerful mechanisms we can put in place to reduce emissions and speed the transition to a low-carbon economy,” says Peter Bakker, President and CEO of the World Business Council for Sustainable Development. “Many companies are already using internal carbon prices, and the external call for a formal carbon price has grown stronger across the world during 2015. This is a united call for action from the business community as we head towards the historic climate negotiations in Paris this December.”

“As more and more governments move forward with carbon pricing, the Paris agreement offers a critical opportunity for strengthening the global carbon market,” says Bob Perciasepe, President of the Center for Climate and Energy Solutions. “By requiring sound accounting of international trading, the agreement can facilitate the growth and credibility of the carbon market, a critical tool for cost-effective emissions reduction.”

“We believe that market-based mechanisms, such as carbon markets, are the most effective tool for mitigating greenhouse gas emissions and stimulating investments in low-carbon technologies and energy efficiency,” says Hans ten Berge, Secretary General of EURELECTRIC. “The importance of carbon markets should be anchored in the new climate change regime with a view to enabling the development of a global carbon market in the longer term.”

“Australian businesses recognise the importance of having robust and credible processes to underwrite international linkage of efforts to reduce greenhouse gas emissions,” say Jennifer Westacott, Chief Executive of the BCA, and Innes Willox, Ai Group’s Chief Executive.

“The Council believes that market-based mechanisms are proven, cost-effective tools for achieving national mitigation goals,” says Lisa Jacobson, President of the Business Council for Sustainable Energy. “Countries are setting the global pathway forward in Paris and market-based mechanisms should be recognised as tools to help transform the energy sector and grow national economies.”

“Carbon markets and carbon pricing are the creation of policy-makers,” says Richard Folland, Executive Director, Climate Markets and Investment Association. “Market participants around the world will be looking for signals from the negotiators in Bonn this week that they support carbon pricing as a key instrument in tackling climate change at the global level.”

“Market-based instruments, such as the EU ETS, are of key importance in order to reduce emissions and deploy climate solutions cost-efficiently,” says Troels Ranis, Director of the Confederation of Danish Industry. “Efforts and initiatives to promote this tool internationally are most welcome and supported by Danish Industry.” “Sound and efficient carbon markets continue to be the most cost-effective way to reach the world’s agreed climate goals,” says Beate Raabe, Secretary General of Eurogas.

“Businesses and investors around the world are calling for carbon pricing is one of the key policies to help harness the power of markets in tackling climate change,” says Nigel Topping, CEO of We Mean Business. “Over 1000 companies are already implementing internal carbon prices, in anticipation of regulation. Whether in the form of carbon taxes or cap-and-trade systems, smart carbon pricing policies will be fundamental in giving investors, businesses and governments a clear economic signal to drive investment in a cleaner energy future.”

“We look forward to the Paris conference, as the commitments submitted by the Parties have generated a positive setting,” says Juha Naukkarinen, Managing Director of Finnish Energy. “However, we are concerned whether the agreement will convince investors all around the globe that carbon price will become a significant factor in their business. Clear support for global market mechanisms will help Europe to continue strengthening its market-based climate policy with a view to carbon neutral energy by 2050.”

NOTES

1 The full list of signatories is: Aluminium Association of Canada; Australian Industry Group (Ai Group); Business Council of Australia (BCA); Business Council for Sustainable Energy; BUSINESSEUROPE; Canadian Chamber of Commerce; Carbon Market Institute; Center for Climate and Energy Solutions (C2ES); Climate Markets and Investment Association (CMIA); Confederation of Danish Industry (Dansk Industri); Confederation of Finnish Industries; Edison Electric Institute; EURELECTRIC; Eurogas; Federation of German Industries (BDI); Finnish Energy; IETA; SWITCH; World Business Council for Sustainable Development (WBCSD); We Mean Business.

LONDON, 5 October – Today’s release of a new draft agreement and decisions for the upcoming Paris climate talks is an important step towards a new international agreement on climate change, says IETA. However, it is critical that negotiators provide clear rules for countries that intend to cooperate through market-based approaches.

The new text, released on Monday morning, is more streamlined than previous versions, running to only nine pages for the draft agreement and an additional 10 pages on draft COP decisions. It spells out elements for a new agreement – spanning issues such as climate change mitigation, adaptation, technology transfer and finance – as well as decisions to operationalise the agreement.

Disappointingly, the draft agreement has few provisions  to support the use of market mechanisms, nor does it specify rules to account for international emissions reduction unit transfers. The draft decisions contain several provisions which would support the use of market-based mechanisms to fulfil pledges, but they remain in brackets – meaning they are yet to be agreed.

“Having a more concise text at this stage of the process is welcome – particularly as governments prepare for a final week-long negotiating session later this month, ahead of the Paris talks,” says Dirk Forrister, IETA’s President and CEO. “However, it is still unclear whether the agreement will feature rules to encourage cooperation through carbon markets, with many key provisions still to be agreed.”

He adds: “Businesses all over the world have consistently called for carbon pricing to form a part of the new agreement. With the profound concerns that business and government share in ensuring cost effectiveness, market provisions need to be at the heart of the agreement.  China is set to launch the world’s largest carbon market in 2017, adding to the 40% of global GDP¹ already subject to emissions trading. These efforts need to recognised and encouraged in a future rules-based agreement.” 

NOTES

1 According to the International Carbon Action Partnership’s 2015 status report. 

You can access this press release here.

NEW YORK, 25 September – China’s announcement of its national emissions trading system plans is a boost for international climate negotiations – and for the role of market mechanisms in the 2015 climate agreement.

China’s President Xi Jinping is expected to announce today that the country’s national ETS will begin in 2017, building on the seven pilot market systems that have been operating in the country since 2013. When launched, the Chinese ETS will be the world’s largest.

IETA has been increasingly active in China in recent years, including through five business-to-business ETS dialogues around the country as part of the Business Partnership for Market Readiness, which has given hundreds of Chinese firms the opportunity to discuss carbon management with European and Californian practitioners. IETA is also consulting with Chinese authorities on the design of the national market system.

This step by the world’s largest emitter to use cap and trade to reduce its greenhouse gas emissions adds to the momentum leading to the Paris climate negotiations at the end of this year, expected to culminate with a new international climate change agreement. It is also a signal that the new agreement needs to ensure a role for market mechanisms for those that wish to use such systems to fulfil their contributions.

“Today’s announcement by President Xi is a welcome signal that governments around the world are taking the climate threat seriously and that market mechanisms can help,” says IETA CEO & President Dirk Forrister. “We hope that negotiators take today’s announcement as another signal that the 2015 climate agreement needs to recognise markets. China joins a growing number of countries that recognise, when it comes to cutting emissions and keeping costs down, markets matter.”

“China has had positive experiences with markets to cut emissions, starting with the Clean Development Mechanism and, more recently, the seven pilot systems,” says Jeff Swartz, IETA’s Director of International Policy. “IETA and our members look forward to engaging with the Chinese government as it looks to roll-out the next phase of its carbon market.”

Earlier this year, IETA and CDC Climat Research released an update to the China case study, as part of the World's Carbon Market series, chronicling market developments.

You can access this press release here.

LONDON, 22 September – ICROA is pleased to announce that it is partnering with the UN on the Climate Neutral Now campaign, which aims to drive governments, business and individuals to offset their emissions and support global climate efforts.  

The campaign, launched today in New York, is part of a drive to raise public awareness of offsetting and its benefits in the run-up to the climate talks in Paris at the end of this year, where a new global agreement to fight climate change is to be agreed. Leading businesses such as Microsoft and retailer Marks & Spencer are supporting the initiative, as are Hollywood actor Edward Norton and fashion designer Vivienne Westwood.

The partnership with ICROA will allow the UN to offer businesses a comprehensive service on carbon management and lower global carbon emissions through the delivery of carbon finance to emission reduction projects around the world.

“Climate Neutral Now is a great initiative to raise awareness among business about its climate impacts and how these can be offset,” says IETA CEO & President Dirk Forrister. “IETA, ICROA and all our members are ready to help any businesses that are prepared to take this step.”

He adds: “For the world to meet the goal of limiting global warming to 2°C, it is vital that business takes action. Climate Neutral Now is a great way of using market forces to make a difference.”

“ICROA is proud to partner with the UN on this voluntary initiative,” says Sophy Greenhalgh, ICROA’s director. “ICROA has for a long time worked with business to take action on climate. We are delighted that the UN is actively promoting the importance of voluntary offsetting at this critical time and encourage all to get involved and make a positive impact by becoming Climate Neutral Now.”

“The private sector plays a vital role in working toward climate neutrality,” says Niclas Svenningsen, Manager, Design of Strategic Initiatives at UNFCCC. “We are delighted to be working with ICROA and grateful for their support in helping companies measure and reduce their climate footprint.”

More information on the Climate Neutral Now campaign, please see http://climateneutralnow.org.

Download the press release here.

Contact: Katie Kouchakji, press@ieta.org

IETA welcomes European ministers’ support for markets in 2015 climate agreement BRUSSELS, 18 September – Commenting on the European Environment Ministers’ council conclusions relating to the Paris agreement, IETA’s Director of International Policy Jeff Swartz says: “IETA is encouraged that the European Environment Council has given a clear mandate for Europe to negotiate a role for market mechanisms in the Paris agreement. Market mechanisms are one of the few tools in the architecture of the Paris agreement that will maximise the innovation and ‘can-do’ spirit of the private sector in reducing greenhouse gas emissions globally. “The absence of clear provisions on market mechanisms in the agreement would lead to less ambition by the numerous countries which seek carbon reduction abatement opportunities outside of their domestic borders. It would also send a signal to the private sector that the UN process has failed in its attempts to put a price on carbon. “Europe’s mandate to its climate negotiators to include markets in the 2015 agreement is a positive signal ahead of the next meeting in October to progress the text before the world gathers in Paris this December to finalise the agreement.” About IETA: IETA is the voice of business on carbon markets around the world. Established in 1999, IETA's members include global leaders in the oil, electricity, cement, aluminium, chemical, technology, data verification, broking, trading, legal, finance, and consulting industries.

Contact: Sarah Deblock, deblock@ieta.org

GENEVA, 27 August – IETA calls on policymakers to advance talks on mitigation strategies and cooperative mechanisms for the Paris agreement, including the role of markets, as negotiators prepare to meet from 31 August until 4 September in Bonn, Germany.  

Economists and businesses alike recognise that broad international market linkages can lower costs, improve competitiveness and bolster deployment of advanced technologies.  A study¹ by the Harvard Project on Climate Agreements last year suggested that simple references to encourage carbon market integrity with good accounting of imports and exports could help support future development of market linkages, strengthening the ability of nations to pursue a 2°C level of climate protection. 

This concept is being demonstrated this year, as a number of countries stated in their Intended Nationally Determined Contributions (INDCs) for the Paris agreement that international market mechanisms are crucial to meeting their mitigation goals, be it through acquiring credits or receiving vital investment in low-carbon technologies to develop sustainably. Importantly, some INDCs specify  the minimum that the country can achieve domestically, and how much more could be realised with links to international markets and finance.

“There has been slow progress on the mitigation and market aspects of the negotiations so far,” says IETA CEO & President Dirk Forrister. “With only 10 more official negotiating days before Paris, it’s time to step up the pace on this crucial component of the agreement. Good carbon accounting and markets are joined at the hip with climate change mitigation – if we have no progress on markets and accounting , we’ll have no real progress on mitigation.” 

He adds: “We urge negotiators to speak up at Bonn about how access to markets can help achieve mitigation goals in INDCs.  In fact, countries can achieve more mitigation, more quickly and at a lower cost if there is clarity on market mechanisms.”

Next week’s talks will be the first since the release of a streamlined negotiating text² last month. While welcoming steps to consolidate the text, IETA remains concerned that there is scant detail on approaches to mitigation, use of markets and transparent emissions accounting. IETA's detailed reaction to the streamlined text was published yesterday here. 

“There is definitely scope to put a hook for markets in the mitigation part of the text,” says Jeff Swartz, IETA’s Director of International Policy. “For example, the language on implementing decisions jointly could be expanded to make mention of a unified transfer system such as that proposed in IETA’s Straw Proposal³.” 

“The private sector has been waiting for a signal that market mechanisms will be recognised in the Paris agreement so that it can begin to plan and make investments now for a cleaner future,” adds Swartz. “Next week’s talks are a good opportunity to provide that signal.”

NOTES
¹ The study, prepared in cooperation with IETA, was released in full at COP20 in Lima, Peru
² The streamlined negotiating text is available on the UNFCCC website
³ IETA’s Straw Proposal has been revised to reflect the language of the Geneva negotiating text

Please download this press release here.

Contact: Tom Lawler, lawler@ieta.org

WASHINGTON DC, 3 August – IETA welcomes the Clean Power Plan’s embrace of emissions trading, offering a low cost solution to meeting the plan’s goals. 

Alongside the release of the final Clean Power Plan (CPP) rule, the US Environmental Protection Agency (EPA) released a proposed federal plan and model trading rules. The federal plan would apply to states that do not have their own provisions to comply with the Clean Power Plan. The model trading rules are designed to assist states wishing to adopt a trading system to comply with the CPP. The proposals are open for public comment for 90 days.

“IETA welcomes steps to enhance trading among states as part of the Clean Power Plan,” says IETA CEO & President Dirk Forrister. “Such a flexible approach to compliance can help reduce costs for business and consumers while still meeting environmental objectives – as well as introducing a price signal and incentives for clean investments.”

“The US is not alone in employing this method to cut emissions; emissions trading systems are already in place in China, the EU and South Korea, as well as 10 US states, with more in development around the world,” he adds. “Absent Congressional legislation, this is the next best option, and we look forward to engaging with the EPA as it seeks to finalize the federal plan.”

“Coupled with the proposed model trading guidelines, we look forward to seeing robust carbon markets developing throughout the US,” says Tom Lawler, IETA’s Washington, DC representative. “IETA will focus on working with our members and states over the coming months to further improve the trading guidelines and the federal plan. With these tools, the goals of the Clean Power Plan can be met at the lowest cost.”

Further information on the Clean Power Plan can be found on the EPA's website. 

Please download this press release here.

Contact: Katie Kouchakji, Kouchakji@ieta.org

GENEVA, 27 July – Commenting on the release of the consolidated version of the Geneva negotiating text, to guide negotiations towards an international climate change agreement in Paris at the end of this year, IETA’s CEO and President Dirk Forrister says:

“We welcome efforts to streamline and consolidate the negotiating text – especially as there are only 10 more official negotiating days before the Paris conference. As governments prepare to meet in late August for five days of talks, we urge them to turn more attention to international market mechanisms that deliver carbon price signals which stimulate climate action by business.

“However, we remain concerned at the lack of clarity on the use of markets and tools to accelerate links between systems, such as common accounting rules and project crediting mechanisms. For the past year, the private sector all around the world has voiced strong support for policies that put a price on carbon, because they give economic signals about the value in reducing emissions. Enabling links between existing and future markets would lead to faster emissions reductions at even lower cost, allowing countries to go further while keeping costs down. We urge negotiators to move these elements into the agreement or decision texts.

“The Paris agreement should establish a solid foundation for the markets of the future, ensuring their integrity and effectiveness. If policymakers are serious about getting business engaged in actions on a large scale, they must ensure that carbon market mechanisms grow strong under the future framework.”

The streamlined text is available on the UNFCCC Website.

Please find this press release here.

Contact: Katie Kouchakji, kouchakji@ieta.org

GENEVA, 17 July – Commenting on the successful first reverse-auction of carbon credits held by the World Bank’s Pilot Auction Facility (PAF), IETA’s CEO and President Dirk Forrister says:

“We are pleased to see that the first auction by the PAF was a success.  This innovation offers a fresh approach to public-private partnerships as well as providing a lift to the Clean Development Mechanism, helping keep emissions-reducing projects to move forward in choppy economic times.

"The PAF shows a practical way that targeted government funds can leverage larger amounts of private money - by reducing risks, it boosts investor confidence and mobilises capital to the climate challenge."

"In the future, the world needs to see further collaboration between the public and private sectors. The PAF’s model deserves a close look by other climate finance institutions, such as the UN’s Green Climate Fund.”

The winning bidders included Amsterdam Capital Trading and BP Energy Asia. The full auction results and list of winning bidders is available on the PAF website.