3 Minute Briefings

Our 3 Minute Briefings series is aimed at making complex issues digestible in 3 minutes or less. These are geared towards people who are interested in emissions trading and who may be knowledgeable about one part of it, and want to come up to speed quickly on a basic issue or some new issue or concept that everyone's talking about (or maybe even arguing about).

Our current topics include Cap & Trade Basics, Emissions Trading and the WTO, The EU Emissions Trading System and Why Emissions Trading is More Effective Than a Carbon Tax.

If you have an idea for a 3 Minute Briefing you'd like to learn more about, please contact us.

Allowance Reserves Across Emission Trading Systems - April 2014

This briefing note describes how the concept of an allowance reserve mechanism has been designed in different emission trading schemes around the world. It takes into consideration systems in Europe ( EU ETS) and North America (RGGI, California, and Quebec).  The intent is to provide a brief description of such reserves and facilitate the comparison of their design.

download the briefing here

Australia Carbon Pricing Update - March 2014

The Coalition government, led by Prime Minister Tony Abbott, has continued to take action to deliver on its campaign promise of repealing Australia’s carbon pricing mechanism, which featured a fixed-price emissions trading scheme (ETS) ranging in the mid-$20 (AUD) that would transition to a floating price by July 2015.  As of early March 2014, the “repeal legislation” has passed the coalition-controlled House but has yet to be agreed upon in the Senate, though upcoming elections could change the balance of power in favour of a repeal.  At the same time, the new government aims to develop an alternative policy based around an “Emissions Reduction Fund” involving a domestic crediting mechanism and a fund to purchase abatement from the private sector.  

Download the Update here

Overview of the EU’s policy framework for climate and energy for 2020 - 2030


24 February 2014

On 22 January, the European Commission released a Communication that highlights the framework it wants to develop for the EU’s climate and energy policies towards 2030. As part of this package, the Commission also released a legislative proposal to reform the EU ETS. The publication of these documents is an important step and allows formal discussions to begin among European Heads of State on what greenhouse gas target they would like the EU to pledge as part of the negotiations on the 2015 negotiations. The package includes interesting proposals to strengthen the role of the EU ETS, but falls short of providing the necessary political commitment to international carbon markets.
This briefing note highlights the main messages from the package which have consequences for the European carbon market and globally. IETA will be developing its position with member companies ahead of the 20-21 March European Council meeting with Heads of States.


EU Climate Policy: Backloading, ETS reform, 2030 GHG targets

13 November 2013

In July, the European Parliament approved a text clarifying the legal right of the European Commission to change the timing of auctioning of allowances, and gave the mandate to the Rapporteur to enter into trilogue negotiations with the European Council. Since then, however, progress has been slow in the European Council and until recently, this prevented a qualified majority from being reached. European ambassadors met on 8 November, and approved the Parliament text without any amendments. This means formal adoption of the legally-clarifying text by both institutions is likely to take place before the end of the year. Proposals to reform the EU ETS from the European Commission are closely linked to a decision being taken on backloading. With the legislative recess looming closer, it is important to get backloading adopted before April 2014, which means the legal text needs to be adopted very soon. Once this is adopted, expectations are that the European Commission will propose legislation on reforming the EU ETS, and will also put forward suggestions for EU-wide GHG targets for 2030. These targets are scheduled to be discussed by European Heads of States in March, and will form the EU’s position at the World Leaders Climate Summit, which is being organised by Ban Ki Moon in September 2014.



6 November 2013

This briefing note analyses recent developments and expectations affecting the backloading proposal, reform proposals of the EU‐ETS and discussions on the 2030 climate and energy framework.


May and July 2013

The July 3rd vote was the second plenary vote on backloading in the European Parliament. Ahead of the July 3rd vote things had changed and a compromise amendment was negotiated by the three largest political groups of the House, and was put for a vote in plenary. The compromise itself failed to get sufficient support, but the amendment supporting backloading with fewer conditions attached compared to what was proposed in the compromise, was adopted in plenary. The Final report was adopted with 344 votes in favour, 311 against and 46 abstentions.

July download

May download


An intensive process is underway in Brussels on changes to the EU ETS. Given the dramatic impacts of the economic crisis on emissions markets, EU policymakers are concerned that the ETS is sending a weak investment signal – particularly in light of Europe’s long--‐term commitment to limiting emissions commensurate with holding temperature increases to 2 degrees C.

This note reviews the main changes under consideration and assesses recent developments in the policy process. IETA’s full position on ETS reforms is available on our website www.ieta.org

The EU Emissions Trading Scheme is the leading edge of a global trend for governments to use cap--‐and--‐trade policies to address climate change. This trend reaches from Australia, California and the Northeastern US states to Alberta and Quebec in Canada. It is extending to the pilot systems emerging in 16 developing countries, where IETA’s Business Partnership for Market Readiness (B--‐PMR) is active.

The International Emissions Trading Association (IETA) is a non--‐profit business organisation created in June 1999 to establish a functional international framework for trading in greenhouse gas emission reductions. Our membership includes leading international companies from across the carbon trading cycle. IETA members seek to develop an emissions--‐trading regime that results in real and verifiable greenhouse gas emission reductions, while balancing economic efficiency with environmental integrity and social equity. IETA comprises over 140 international companies from OECD and non--‐OECD countries.

Download the Full Document

Briefing on the EU’s Emissions Trading Scheme

April 11, 2012

I. Background

The price of an EU ETS allowance (EUA) is not bound by any price floor or ceiling but is based on price discovery regarding supply and demand in markets. The price fluctuates in line with market participants’ view of supply and demand. There is no tool foreseen for short-­term market intervention by the regulator under Directive 2003/87/EC (ETS Directive). The only form of addressing a divergence from underlying economic factors is by adjusting market supply, i.e. the emission reduction objective or the ‘cap’.


EU ETS & Aviation


In 2005, European Union (EU) policy makers turned their attention on regulating emissions from the aviation sector. Although aviation only accounted for 3% of global carbon emissions in 2009, the industry’s carbon footprint has increased by 98% between 1990 and 2006.1  Due to an emissions growth forecast of 667% from 2006 to 2050, the sector stands to become a more important source of GHG emissions in the future unless mitigation policies are being taken.

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