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  • 24 Oct 2019 11:21 PM | Anonymous member (Administrator)

    SAN FRANCISCO, 24 OCTOBER - The International Emissions Trading Association (IETA) today issued the following statement in response to the civil lawsuit filed by the US Department of Justice against the State of California regarding the linkage of its cap-and-trade program with another cap-and-trade program in the Canadian Province of Québec. 


    This lawsuit represents the continuation of an unfortunate political battle waged by the Trump Administration against California’s climate leadership. The legal challenge seeks to disrupt a market-based climate program that has enabled companies in California and Québec to achieve their targets at lower cost. 

    The attempt to terminate the link between California and Québec causes unnecessary market uncertainty by changing legitimate expectations of companies that invested in emissions reduction projects in the two jurisdictions. The program has operated since 2014 without federal interference.

    “IETA supports both the California and Québec cap-and-trade programs as well as the linkage between them that allows businesses to achieve carbon reductions at the lowest economic cost,” said Dirk Forrister, President and CEO of IETA. “This program has grown stable with laws that extended the targets to 2030, and many companies have invested in reliance on that legal framework.”

    IETA’s long-standing preference is for the U.S. federal government to adopt a national emissions trading program to provide a clear and effective policy framework for American businesses. In the absence of federal policy, IETA has applauded California and other states as they pioneered carbon market solutions to pave the way for a national policy in the years to come.

    To create the linkage between the two markets, regulators in California and Québec signed a Memorandum of Understanding (MOU) rather than a treaty (which could have been in violation of the United States Constitution). This MOU followed a common practice in the modern world of MOUs between subnational jurisdictions in many areas of commerce. 

    “The global economy and the interconnectedness of the environment has led to multilayered federalism: many states are parties to agreements with other subnational jurisdictions, and most of them were not approved in advance by Congress,” said Nico van Aelstyn, Partner at Sheppard Mullin LLP, who has acted on IETA’s behalf in prior litigation in California.  

    The Department of Justice lawsuit focuses on the linkage between the California and Québec cap-and-trade programs. Even if the lawsuit succeeds in severing the linkage between the two programs each would nonetheless continue normal operations without benefits of cooperation. The Trump Administration’s complaint could force a loss of market-based efficiencies, potentially increasing the overall costs of carbon emissions across the two jurisdictions. 

    “The climate challenge demands more market-driven cooperation across national borders, not less,” said Katie Sullivan, Managing Director of IETA. “The WCI’s cooperative approach is a proven winner in providing incentives for businesses to cut emissions while keeping costs down for consumers, giving the U.S. an extra climate benefit – not a harm.”

  • 24 Sep 2019 3:09 PM | Anonymous member (Administrator)

    NEW YORK, 24 September - International cooperation under a well-functioning Article 6 of the Paris Agreement could save as much as $250 billion per year by 2030, according to a new study. Experts believe that the savings could improve the likelihood of achieving the Paris climate protection goals.

    The study was carried out by the International Emissions Trading Association and co-sponsored by Carbon Pricing Leadership Coalition,with the help of researchers and modellers from the University of Maryland. You can find a copy of the summary report here, and a copy of the full document here.

    Reinvesting these savings in further emissions reductions could increase the potential for overall global reduction in greenhouse gases by around 5 billion tonnes a year in 2030, the study found, helping to close the ambition gap. Existing national commitments are currently estimated to achieve 9 billion tonnes in that timeframe, so Article 6 cooperation could enhance it by over 50%.

    When coupled with natural climate solutions in lands and forests, the benefits become even greater – making an additional 9 billion tonnes of abatement feasible and doubling the effectiveness of the Paris Climate Agreement.

    In the search for greater climate ambition, market cooperation and natural climate solutions are essential elements,” said Dirk Forrister, CEO of IETA. “The modelling shows how expensive ambitious targets can become if countries act in isolation – but if they work together to drive global market incentives and tap nature’s potential, the Paris goals come within reach.”

    However, these astonishing outcomes rely on the adoption of a clear and transparent set of rules for international emissions trading, on one side, and on the inclusion of the use of Article 6 in countries’ Nationally Determined Contributions (NDCs) on the other.

    “When international negotiators gather in Santiago, Chile in December, the top issue for decision this year is completion of the Article 6 rulebook,” said Cristobal De la Maza, Head of the Environment and Climate Division at the Ministry of Energy of Chile. 

    “This report shows the importance of getting it done well, so that countries can start working together more effectively and build confidence for raising ambitions.”

    Nat Keohane, vice president for international climate at the Environmental Defense Fund, said: “These results, which are in line with independent analysis by EDF, show that international cooperation, including natural climate solutions, is critical to raising ambition."

    "To cut emissions at the pace and scale that the science demands, we must harness the most powerful force we have — the power of markets. Countries can take an important step forward at COP25 in Santiago by agreeing on strong guidance under Article 6 of the Paris Agreement.”

    Article 6 will guide the transfer and trade in emission reductions among nations, which will ultimately involve the private sector. At COP25 in Chile later this year, negotiators from more than 190 countries will be tasked with agreeing a set of rules to account for the trade in emissions reductions and to establish a UN body to govern a new Sustainable Development Mechanism for assessing and issuing carbon credits. 

    “A decision to operationalise Article 6 is crucial for a sustained, robust implementation of the Paris Agreement,” said Juan Pedro Searle, Article 6 Cluster Coordinator, Chilean negotiating team. 

    “Negotiators from every country and groups will have a unique opportunity at COP25 to leave a legacy to humankind: the adoption of the rules that will promote an unprecedented cooperation between parties in the fight against climate change. The invitation is open to make COP25 a successful event.”

    Additional Background

    Under the Paris Agreement, each nation has prepared a plan or NDC towards the overall goal of net zero carbon emissions by the second half of the century. The IETA/UMD modelling extrapolated current NDCs to the end of the century and ran them through four scenarios to estimate the total monetary value of Article 6 of the Paris Agreement.

    If countries act in isolation, the models show a wide range of market prices emerging by 2030, from $0 in poor countries to $101 in Europe. But with effective market linkages, prices converge to a global average of $38 in 2030 whilst delivering the same level of climate protection.

    “Net zero emissions means that trade must bring together natural and technological sinks with the remaining emitting sources, wherever they may be,” said said Stefano De Clara, IETA’s International Policy Director. “This can only be achieved if large scale trading systems emerge, and they must follow robust rules of transparency to instil business and public confidence.”

    The calculations show that international cooperation through Article 6 could yield cost savings in the order of $249 billion per year by 2030, $345 billion per year by 2050 and $988 billion per year by 2100. These costs represent significant savings compared with a scenario in which nations do not cooperate on trading: costs are more than 60% lower in 2030, around 40% lower in 2050 and around 30% lower in 2100, the study found.

    This in turn generated values for the global carbon market of about $167 billion in 2030, $347 billion in 2050, and $1.2 trillion in 2100. Even more importantly, the results show that all countries benefit, in terms of GDP growth, from Article 6 cooperation.

    “This study illustrates how cooperation through carbon markets benefits all parties who join in,” said Angela Churie Kallhauge, Head of the CPLC. “It drives investment to those who have potential to reduce emissions more cost effectively than others.”

    Interestingly, results show that developing effective policies to tap the land use sector's potential could further increase the economic and mitigation value of Article 6, increasing savings to $320 billion a year, and additional mitigation to 9 billion tonnes a year, in 2030. This clearly underlines the importance of Natural Climate Solutions coupled with an effective framework for international carbon markets.

    “The cumulative additional mitigation enabled by perfect implementation of Article 6 over the course of the century exceeds 520 billion tonnes of CO2. [Reinvesting the savings into additional mitigation] enables 50 percent more mitigation compared to [the baseline scenario],” the report states.

    “Our goal is to move this project forward to produce further results before COP25 and to continue the research effort in 2020,” said IETA’s Forrister. “There is a clear need for scientific research to examine potential implications of alternative rulesets and implementation pathways for Article 6”.

    “Understanding the value of international cooperation under the Paris Agreement through Article 6 is extremely important to enable us to make a strong business case for stakeholders to prepare and engage in the development of international markets,” said the CPLC’s Kallhauge. “Such cooperation is important if we are to address concerns around competitiveness and the loss of productivity.”

    IETA would like to acknowledge the following organisations for their support for the Article 6 modelling project: the Carbon Pricing Leadership Coalition, the University of Maryland, Chevron Corp., Conservation International, the Electric Power Research Institute (EPRI), the European Bank for Reconstruction and Development (EBRD), the Governments of Germany, Norway and the United Kingdom, the Institute for Global Environmental Strategies, Royal Dutch Shell plc and the Swedish Energy Agency.

  • 06 Aug 2019 1:31 PM | Anonymous member (Administrator)

    GENEVA, 6 August - IETA is pleased to announce the appointment of Federico Di Credico of ACT and Hendrik Rosenthal of CLP as new members of its governing Council. They fill vacancies created when Matthew Bateson of Rio Tinto and Jeanne Ng of CLP resigned in mid-term.

    Federico Di Credico is Managing Director of ACT Financial Solutions, an investment firm spin-off of ACT Commodities Group, which specialises in carbon emission trading, price risk management and climate finance. He joined ACT in 2012, after working as renewable energy analyst in Italy and as derivatives broker in London. In 2017 he was appointed to manage the newly established investment firm, ACT Financial Solutions, based in Amsterdam. Federico’s main area of focus and expertise lies in market-based mechanisms, risk management and financing instruments that can help drive the economy towards a sustainable future.

    Hendrik Rosenthal is Director - Group Sustainability of the CLP Group and is responsible for the Group’s sustainability-related strategy, reporting and communications. Based in Hong Kong, he supports CLP senior management in sustainability and climate change-related risk management and advises on sustainability matters of the Group’s power business in the Asia-Pacific region. With 20 years of experience in environmental management across the public, private and NGO sectors, Hendrik previously led research and consulting projects in Canada, Hong Kong and Singapore.

    “I am happy to welcome Federico and Hendrik to the IETA Council at a time when carbon markets are growing more vibrant, in light of the momentum behind the Paris Agreement,” said Rick Saines, Chairman of the IETA Council. “Each of them brings enthusiasm and fresh ideas to the leadership of our organisation.”

    “Hendrik’s insights from working for a covered entity in the Chinese carbon market pilots and Federico’s trading desk experience across multiple carbon and clean energy markets will bring valuable perspective to the IETA Council’s work,” said Dirk Forrister, IETA President and CEO.  

  • 08 Jul 2019 6:32 AM | Anonymous member (Administrator)

    IETA urges EU Members States that are introducing coal phase-out policies to cancel EU ETS allowances to protect the bloc’s carbon market from a supply-demand imbalance. 

    A large-scale shutdown of coal-fired generation, happening simultaneously in several EU countries, would significantly affect the functioning of the EU’s carbon market by cutting demand for EU allowances (EUAs). So far, national coal phase-outs are planned in 12 Member States. 

    The review of the EU ETS Directive for Phase IV (2021-2030) introduced the option for Member States to voluntarily cancel emission allowances corresponding to national measures that lead to closure of electricity generation capacity in their territory. Further guidance on this provision is expected to be provided by the European Commission in the review of the Auctioning Regulation. IETA encourages the European Commission to clarify rules soon on the voluntary cancellation of allowances. 

    IETA has today published a position paper entitled “Ensuring the EU’s carbon market resilience to national coal phase-out policies” that outlines recommendations on how to tackle the risk that market demand could collapse, resulting in oversupply.

    “Currently the MSR can only partially mitigate the impact of numerous coal phase-outs happening simultaneously. We believe that cancellation of allowances by Member States is the right solution to ensure the EU’s carbon market’s resilience to national coal exits.” said Julia Michalak, EU Policy Director at IETA.

    “There are still many unanswered questions with regard to the cancellation provision, including the calculation for the number of allowances to be cancelled, advance notification of cancellations, and a template for Member States to inform the Commission of their intention to cancel EUAs. All these relevant details should be clarified swiftly.”

  • 28 Jun 2019 9:58 AM | Anonymous member (Administrator)

    IETA welcomes the decision today by UNFCCC negotiators in Bonn to send to this year’s Conference of the Parties (COP) a set of updated draft rules to operationalise Article 6 of the Paris Agreement.

    The draft rules will be discussed by nations at the COP25 meeting in Santiago, Chile, in December.

    IETA urges negotiators to ensure that the rules are fully fleshed out for approval at the annual climate summit, to give the global business community sufficient time to prepare before the rules to take effect.

    “The COP has already acknowledged that in addition to public funding, nations must leverage vast sums of money from the private sector to help reach the goals of the Paris Agreement,” said Dirk Forrister, IETA’s CEO. “A complete set of Article 6 rules are critical to create the transparency and security that these funds need in order to flow.”

    Article 6 of the Paris Agreement lays out the framework for international market mechanisms that would help countries achieve deep reductions in emissions from 2020, with the goal of achieving global net zero emissions in the second half of this century.

    The text under discussion covers issues including the legal basis for emissions reductions, accounting for transfers of emissions reductions, rules for project-based reductions and non-market-based approaches.

    “It’s good to see that Parties have made progress beyond the Katowice texts,” said Stefano De Clara, International Policy Director at IETA. “We’re hopeful that this draft will constitute a good basis for continuing the work in Santiago.”

    At last year’s COP in Katowice, Poland UNFCCC delegates failed to reach agreement on rules for international carbon markets, despite the efforts of the Polish presidency to create a streamlined set of draft decisions.

    Over the past two weeks in Bonn, negotiators have focused on ensuring the draft rules reflect all positions.

    “We expected to see largely technical work aimed at addressing the ambiguities in the two sets of draft texts that emerged from Katowice,” De Clara said. 

    “Fundamental issues remain to be decided,” he added. “The work of this session was not to complete work on those issues, but to produce a technical text that can now be forwarded to the political decision process at COP25.”

    Parties will meet in Santiago from 2-13 December to negotiate and approve the draft text.

  • 17 Jun 2019 7:00 AM | Anonymous member (Administrator)

    PARIS and GENEVA, 17 June - Delegates from more than 190 countries meet in Bonn this week to continue negotiations over the implementation of Article 6 of the Paris Agreement.

    Article 6 provides a policy foundation for trading in emissions reductions between states, a critical element for business in the drive to achieve net zero emissions by the second half of the century.

    Parties were unable to find agreement on Article 6 at COP24, resulting in the absence of its rules from the Katowice Climate Package. Instead, they forwarded negotiating texts to Bonn that will serve as a starting point for discussions this week, led by Paul Watkinson (France), Chair of the UNFCCC’s Subsidiary Body for Science and Technical Advice (SBSTA).

    “We believe the business community’s ability to deliver ambitious targets with large scale investments depends on strong, clear rules on market mechanisms,” said Dirk Forrister, IETA’s President and CEO. “With clarity on Article 6, they can invest with confidence in the vast opportunities for reductions and removals that are spread around the globe – and trade together to achieve net zero emissions.”

    “Article 6 is crucial to all businesses, big and small, from all sectors of the economy and from all countries” said Majda Dabaghi, Director of Inclusive & Green Growth at the International Chamber of Commerce (ICC). “Our members – 45 million businesses from over 100 countries – are eagerly awaiting clarity on Article 6 rules, which are essential to provide strong and consistent pricing signals to shift investment towards low carbon solutions.”

    Earlier this month UNFCCC Executive Secretary Patricia Espinosa told an international carbon markets conference “Never have we needed the support of international carbon markets as we do right now.”

    Forrister added: “We need clear guidance on how to account for transfers of emissions reductions, on the type of projects that can earn reductions and on measurement and verification rules. Absent that guidance, the private sector will not have the clarity it needs to deploy the billions - even trillions in capital expenditure that are needed.”

    IETA and ICC are among the signatories of a declaration on the need to promote robust accounting rules for international carbon markets, which was released at COP24.

    “The declaration is more relevant than ever, in light of the COP24 outcome, and we urge Parties to work constructively to ensure a good outcome at COP25 in Santiago,” explained Dabaghi.

    Negotiators will meet for two weeks in Bonn. The outcomes of the talks will be forwarded for final decision at the 25th Conference of Parties in December in Santiago, Chile.


  • 24 May 2019 1:37 PM | Anonymous member (Administrator)

    GENEVA, 24 May - IETA welcomes the formal launch next week of South Africa’s carbon tax and offset law, the first such measure in Africa.

    The tax of R120 (US$8) per tonne of CO2 equivalent will be assessed on greenhouse gas emissions from industrial plants in the country. This obligation can be met partially by surrendering certified carbon credits from approved standards.

    “We welcome the climate leadership shown by the government of South Africa, for what is a first of its kind on the continent,” said Dirk Forrister, CEO of IETA. “The flexibility will help to ensure rapid reductions in emissions in a cost-effective manner.”

    South Africa’s tax forms part of its Nationally Determined Contribution to achieving the goals of the Paris Agreement, which under which nations have agreed to reach net zero emissions in the second half of the century.

    South Africa’s tax will allow emitters to use carbon credits to meet between 5-10% of their obligations under the tax.

    In the first phase of the tax, only South African-based credits developed under the UN’s Clean Development Mechanism, Verra’s Verified Carbon Standard or the Gold Standard will be eligible for compliance. A future national carbon standard will also be considered. Carbon credits from projects registered and / or implemented before the introduction of the carbon tax regime will be accepted subject to certain conditions.

    The official Act is available here in the government gazette of South Africa.

    IETA organised a webinar on this topic in April, with participation from the National Treasury of South Africa. You can access the recording and presentations here on the IETA website.

  • 08 Mar 2019 2:25 PM | Anonymous member (Administrator)

    LONDON — (March 8) IETA welcomes the decision by the International Civil Aviation Organisation Council to approve a set of emissions units criteria — guidelines that will help determine eligible emissions units under the Carbon Offsetting and Reduction System for International Aviation (CORSIA). The text includes provisions to ensure delivery of real and verifiable emissions reductions, as well as preventing the double-counting of reductions.

    “Preventing double-counting of reductions is essential to build market confidence,” Eva Weightman, IETA’s aviation policy director, said. “Investors need to know that they have clear title to reduction units - and that there can be no competing claims.”

    The ICAO Council also approved the formation of a Technical Advisory Body (TAB) to select which emissions reduction standards and programmes will be eligible for its global carbon market.

    “We’re pleased and encouraged that ICAO has taken the next step towards the operationalisation of CORSIA,” said Weightman.

    “Time is of the essence,” Robert Stevens, head of IETA’s Aviation Task Force added. “Generating emissions reductions often takes years — from the start of construction of a project through to the first issuance of carbon credits — so it’s important that the TAB starts work as soon as possible.”

    The TAB will be empowered to select emissions standards and programmes that will be eligible for CORSIA, and will make important decisions including a start date for eligibility. Emissions reductions generated prior to this start date will not be eligible for the market.

    “This week, CORSIA took a big step forward, but more work is needed to bring it into commercial operation,” said Dirk Forrister, IETA’s CEO. “We stand ready to provide further input into ICAO’s stakeholder engagement process to ensure that it benefits from the experience and expertise of carbon market professionals as CORSIA kicks into gear.”

  • 18 Feb 2019 5:38 PM | Anonymous member (Administrator)

    IETA supports the Council of the European Union’s conclusions on climate diplomacy, in which it “welcomed the European Commission’s strategic long-term vision for a prosperous, modern, competitive and climate-neutral economy.”

    We are particularly heartened that Ministers reiterated their belief that “carbon pricing and fossil fuel subsidy reform are key steps in creating an enabling environment for making finance flows consistent with a pathway towards safe and sustainable low greenhouse gas emissions and climate-resilient development”.

    “We’re pleased that ministers have taken pains to underline the EU’s ambition for a climate-neutral future,” said Simon Henry, IETA’s Director of Carbon Market Development. “Our main concern now is that Europe’s efforts should take place in the context of global ambition, underpinned by strong market mechanisms.”  

    IETA is concerned that there is no reference in the Council conclusions to the urgent need for all nations to complete the work on Article 6 of the Paris Agreement. An agreement on Article 6 would unlock significant financial support for climate protection measures worldwide.

    About Article 6

    Under Article 6, countries may undertake cooperative measures to reduce emissions which generate Internationally Transferable Mitigation Outcomes (ITMOs), tradable instruments that can be put towards the achievement of national climate targets.

    Such market mechanisms need robust rules governing accounting, monitoring and verification in order to give private and public participants confidence in the outcome of funding activity.

    At the last Conference of the Parties in Katowice in December 2018, nations were unable to agree a set of guidelines for these mechanisms under Article 6, while all remaining parts of the so-called Paris Rulebook were agreed.

    A priority for 2019

    Despite the lack of progress on this critical issue, some private and public sector actors are already moving ahead with experimental initiatives to test the market-based mechanisms established by the Paris Agreement.

    For example, Switzerland’s Klik Foundation has issued a tender to buy ITMOs and is inviting international emissions reduction projects to qualify for its programme. The World Bank is also working to test how nations may transfer ITMOs between themselves.

    The Katowice climate talks concluded that work on Article 6 needs to be complete by the next meeting, in late 2019 or early 2020, in time for countries to be ready to implement the rules when the Paris Agreement takes effect in 2021.

    IETA urges all Parties to the UN Framework Convention on Climate Change to redouble their efforts to complete this vital building block of the Paris Agreement.

  • 04 Feb 2019 9:04 PM | Anonymous member (Administrator)

    GENEVA, 4 February - On the occasion of its 20th anniversary, IETA is delighted to announce the appointment of three new honorary Fellows.

    The new honorees are:

    Christiana Figueres, former Executive Secretary of the UN Framework Convention on Climate Change – and an early supporter of IETA’s work. Christiana was instrumental in the negotiations leading to the signing of the Paris Agreement in 2015. Before being appointed Executive Secretary, Christiana held a number of key roles in the governance of the UNFCCC, including the Clean Development Mechanism.

    Dr. Richard Sandor, one of the original contributors to the UN Conference on Trade and Development’s Carbon Forum series that led to the creation of IETA. In addition to being a pioneer in financial markets, Richard founded the Chicago Climate Exchange and the European Climate Exchange.

    James Cameron, founder of Climate Change Capital, one of the pioneering climate finance institutions in the early days of the global carbon market. James has been involved in climate change and carbon market issues for many years, as an advisor to the Alliance of Small Island States and to two COP Presidencies, and an advisor to the EU on the creation of the EU Emissions Trading System. He also established Baker & McKenzie’s Global Climate Change and Clean Energy Practice.

    IETA honours three individuals each year for outstanding contributions to IETA’s mission of advancing market-based solutions to climate change.

    Christiana Figueres said:

    “I’d like to express my gratitude to IETA. I’m delighted to join your long line of trailblazers who have shown both vision and determination, creative resources which we need to urgently strengthen.”

    Richard Sandor said:

    “I am honoured and privileged to have been at the founding moment of this organisation over twenty years ago. New markets require the institutions that help to educate market users and policymakers. IETA was fundamental in helping build the infrastructure for carbon markets worldwide.”

    James Cameron said:

    “I am delighted to have been made an IETA fellow, alongside others I admire and in a line of pioneers. Creativity and constraint are connected: the law limits emissions, exchange values reduction and innovation delivers in the material world. We need IETA’s mission to succeed to increase our chances of staying below the 1.5 degree target.”

    A full list of IETA Fellows can be seen on our website.

    IETA awards honorary fellowships to individuals in recognition of their contributions to developing market-based solutions to climate change and in strengthening the role of the IETA in building the profession. IETA Fellows are named each year.

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