MADRID, 2 December - The business community today calls on nations to agree a “simple but rigorous” set of rules governing international emissions trading at COP25, which starts today in Madrid.
IETA has followed up this call by publishing a paper that sets out the benefits of international emissions trading under Article 6 of the Paris Agreement. The report is supported by no fewer than 15 international and national business, industry and climate associations.
The paper urges delegates to COP25 to “deliver a simple but rigorous rule book for Article 6… based on transparent numerical accounting, [that] recognises both natural and industrial sinks and supports and encourages large scale transactions.”
Dirk Forrister, President and CEO of IETA said that, just as trade among nations secures access to goods and services that may not be available domestically, so emissions trading secures access to greenhouse gas reductions that may not be achievable at home at the lowest price or the fastest rate.
“Not all countries can reduce emissions at the same rate, and… it is certainly not the case that every country can be at zero emissions when needed, so we could use trade to collectively get there through Article 6,” Forrister said.
Cooperation through Article 6 has the potential to reduce the total cost of implementing NDCs significantly, in the order of $320 billion/year in 2030, or alternatively facilitate removal of more emissions, in the order of 9 GtCO2/year in 2030, at no additional cost if those cost savings are reinvested into additional mitigation.
And as the world approaches net zero emissions in the middle of this century, trading will become even more important, the paper pointed out.
“The task of achieving [net zero emissions] can be facilitated by matching sources and sinks through a cooperative approach based on trade” Stefano De Clara, IETA’s head of international policy said.
“COP25 must deliver a simple but rigorous rule book for Article 6, which is based on transparent numerical accounting, recognizes both natural and industrial sinks and supports and encourages large scale transactions”.
However, if countries and sectors cannot agree a wide-ranging trading system for emissions reductions, net zero emissions is unlikely to be achieved in time, the report concludes.
“Article 6 rules are essential for enabling countries to deliver on the Paris goals,” said Dirk Forrister, President and CEO OF IETA. “That’s why business sees it as the missing link to making its visionary goals achievable.”