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  • 12 Oct 2020 9:00 AM | Anonymous member (Administrator)

    GENEVA, 12 October - Media reports last week indicate that the UK Government may now favour a post-Brexit carbon tax rather than an Emissions Trading System (ETS).

    IETA has urged the UK to set up a new national ETS as the most efficient, cost-effective, and transparent mechanism for achieving the UK’s climate targets. It would build on nearly two decades of British leadership in emissions trading, as evidenced in the carbon markets it helped to foster abroad. Carbon markets are now the primary climate policy operating in the EU, California, Canada, South Korea and China.

    “The crucial benefit of an ETS is that by placing emissions under a cap it produces a defined and legally binding reduction in greenhouse gas emissions. In contrast, carbon taxes do not offer environmental guarantees, so they put the environmental goal at risk,”  said Adam Berman, EU Policy Director. “That means the UK would be taking a big gamble on whether it will meet its net-zero goal.”

    IETA has also raised serious concerns that a carbon tax is not capable of providing certainty of future pricing levels. 

    “A carbon tax may look appealing when government seeks to raise revenues, but the environmental reality may disappoint," Berman said.

    "Experience shows that because taxes are highly politicised, no Government can provide long-term certainty over future pricing levels. Do we really want to take a chance on a UK carbon tax that might become a political football, putting in jeopardy popular support for carbon pricing amongst the general public?,” he asked.

    Although national climate efforts are critical, the proposed carbon tax might have ramifications beyond the UK. Berman noted that “struggling to implement a carbon tax months before the UK hosts COP 26 would send a troubling signal to the international community.”

    “The UK remains a vocal proponent for climate action, particularly through market cooperation under Article 6 of the Paris Agreement. By adopting a carbon tax instead of an ETS, the UK would find it harder to provide market linkages with international partners,” Berman added.

    “This would weaken its ability to participate in multilateral solutions to climate change, compromise its position as a global leader in the climate sphere, and risk its reputation as a strong advocate for international carbon markets.”

    “In sum, a carbon tax fails to guarantee the climate goal, makes life harder for industry at a time of economic crisis, and diminishes UK climate leadership when it is needed the most. Climate action is too important to risk on a tax that is unlikely to succeed at its key task – reducing emissions”, Berman said.

    Adam Berman will be appearing before the BEIS Select Committee on Thursday 15th October to stress the case for choosing an ETS over a tax.

  • 06 Oct 2020 8:00 AM | Anonymous member (Administrator)

    GENEVA, 6 October - The CDM Executive Board (EB) has today missed an important opportunity to provide clarity on the future of emissions reductions projects operating under the Clean Development Mechanism (CDM).

    At the end of its latest meeting, the EB decided to postpone a decision on requests to renew the crediting period to assure continued operation after 2020. Following CDM EB procedures, three of the body’s members had requested a review of the requests for additional crediting periods. 

    The EB was scheduled to decide whether to accept the requests, which would allow registered projects to continue beyond the second commitment period of the Kyoto Protocol that ends this December. 

    “Investors and project developers are facing a dire situation whereby they have extreme uncertainty on what will happen to their projects and investments from January 1, 2021,”  said IETA CEO Dirk Forrister. “This in turn will have direct impact on the continuation of projects and creates a heightened risk of project suspensions in various countries”.

    Since COVID-19 concerns forced the postponement of COP26 to November 2021, there is currently no opportunity for Parties to the Kyoto Protocol to reach conclusions on how the CDM will operate from January 1, 2021 and, consequently, whether projects and programmes of activities (PoAs) will be able to extend crediting periods and issue certified emission reductions (CERs) credits. 

    IETA had urged the EB to adopt temporary measures for current rules to continue without change during 2021, given the extreme circumstance of the COVID-19 pandemic.

    “Considering the current exceptional circumstances, we had hoped the EB would do everything within its powers to avoid disruption of the CDM while waiting for a political decision on this issue at COP26,” said Forrister. 

    But during its meeting, the CDM EB failed to agree on a remedy and deferred the issue to a future meeting. 

    Some members of the CDM EB have questioned whether the CDM can continue to operate and issue credits from January 1, 2020, highlighting technical challenges such as global warming factors and issuance codes, arguing that such a decision is outside the CDM EB mandate. 

    “We urge the CDM EB to provide clarity on this issue and to take the necessary interim measures to ensure that, at a minimum, CDM projects and PoAs can continue to operate and issue CERs accordingly until a decision is taken at COP26,” Forrister said.

    This uncertainty is happening at a time when interest in voluntary markets is growing. A troubled CDM, coupled with the gap caused by delays in the operationalisation of the Paris Agreement’s Article 6.4 mechanism, could have a detrimental effect on business confidence in the UN crediting mechanisms.

    “We’ve been hoping for months to get clarity on how the CDM would operate in the interim,” said Stefano De Clara, IETA’s International Policy Director. “Instead, we are concerned that the signals we are receiving from the EB may go in the opposite direction and cause harm to CDM operations.” 

    “This situation is eroding business confidence in the CDM and in future emission reduction mechanisms operated under the UNFCCC,” De Clara added.

  • 18 Sep 2020 10:45 AM | Anonymous member (Administrator)

    BRUSSELS, 18 September - The International Emissions Trading Association (IETA) welcomes and supports the proposals published this week by the European Commission for a more ambitious 2030 emissions reduction target. 

    IETA fully agrees with the European Commission’s impact assessment that the EU ETS should be enhanced and expanded to ensure that is fully aligned with the EU’s climate neutrality target. 

    To complement the Commission’s publication, IETA is today releasing a report which seeks to help European policymakers to take the necessary steps in the journey to net zero.

    “Meeting the EU’s Climate Ambitions: The Evolution of Carbon Pricing to 2050” sets out the case for the expansion and deepening of the use of carbon markets to help achieve the EU’s and indeed the world’s climate goals for 2050.

    IETA’s report highlights how swift inclusion of the maritime sector into the EU ETS, and the establishment of separate emissions trading systems for road transport and buildings is necessary to ensure that all sectors are incentivised to move toward net zero.   

    Europe should also reintroduce robust removals credits in the EU ETS to encourage technologies and projects that remove, rather than simply reduce, emissions of greenhouse gases, IETA says. 

    “IETA is glad to see an acceptance of the vital role that removals will play in reaching net zero as highlighted in the impact assessment,” Adam Berman, Director of EU Policy, said. “IETA fully supports the Commission’s effort to examine how market-based mechanisms can deliver a robust and transparent European framework for carbon removals”.

    “An extension in the longer term of the ETS to new sectors would increase the economic efficiency of emissions reductions and would help the EU to achieve its climate objectives,” the IETA report asserts.

    Not all sectors have the same cost of abatement, however, and in the first instance Europe should consider setting up separate emissions markets for sectors such as road transport and buildings to ensure that abatement remains cost-effective, the report states.

    “The ultimate goal of EU climate policy must be to include all sectors in the EU ETS. The maritime sector is ready for inclusion, but there is a risk in placing road transport and buildings into the EU ETS too soon”, said Berman. “IETA is proposing that stand-alone Emissions Trading Systems are established for the road transport and buildings sectors as a stepping stone to EU ETS inclusion.”

    Equally, Europe’s action on emissions must be matched by equivalent efforts among the community of nations, IETA says.

    The report notes that “Through working toward the internationalisation of carbon markets, the EU can ensure that the risk of carbon leakage is diminished; protecting the competitiveness of European industries which compete globally”. 

    International cooperation has the potential to enable $250 billion per year of global cost reductions to Nationally Defined Contributions (NDCs) by 2030 (according to a recent study prepared by IETA and co-sponsored by Carbon Pricing Leadership Coalition, with the help of researchers and modellers from the University of Maryland) and has the capacity to allow for a more even playing field in relation to competitiveness concerns.

    IETA’s report on “Meeting the EU’s Climate Ambitions: The Evolution of Carbon Pricing to 2050” can be downloaded from the IETA website here

  • 17 Jul 2020 10:14 PM | Anonymous member (Administrator)

    SAN FRANCISCO, 17 July - IETA congratulates the state of California on successfully defending its emissions trading system against a federal lawsuit seeking to sever the program’s link with Quebec. 

    A US District Court has ruled that the Western Climate Initiative – representing the linked carbon markets of California and Quebec – does not unconstitutionally conflict with the federal government’s foreign policy nor its decision to withdraw from the Paris Agreement.

    IETA joined the state of California as a defendant in the case.

    “We congratulate the state of California on defending its carefully crafted programme that allows businesses in California and Quebec to cooperate to reduce greenhouse gas emissions through a market system,” said Dirk Forrister, IETA’s CEO. “For businesses in the WCI market, this will add an extra dose of confidence for future investment.”

    The state successfully rebutted US Department of Justice (DoJ) arguments that the linkage between the two markets represented an unconstitutional incursion by California into the area of foreign policy, which is the sole preserve of the federal government. 

    The Court found that “[The UNFCCC] does not preempt the challenged agreements and regulations because they are entirely consistent with its objectives. . . .  Article 3 of [the UNFCCC] explicitly provides that “policies and measures deal[ing] with climate change should be cost-effective so as to ensure global benefits at the lowest possible cost,” and Article 4 echoes the same.”

    California also successfully rejected DoJ assertions that the WCI market and its cross-border linkage may frustrate the US government’s decision to withdraw from the Paris Agreement.

    Specifically on Article 6, the court echoed IETA’s reasoning in rejecting the US’s contention that “that California could “facilitate Canada’s participation in the Paris Agreement” by providing Canada with mitigation outcomes to satisfy its contribution obligation…  “Even if Canada were to ask the United States to authorize the use of mitigation outcomes acquired from California, the United States will presumably be unable to authorize the use after November. This is well before Canada’s 2030 contribution target is due, a target for which they intend to “explore” the use of mitigation outcomes. Consequently, California’s cap-and-trade program cannot facilitate Canada’s participation in the Paris Accord in the way the United States alleges.”

    The court also found that the cap-and-trade programme does not present a conflict with any Federal foreign policy.

    “[T]he United States offers no concrete evidence that California’s cap-and-trade program has interfered with either negotiations for a better deal or the nation’s imminent withdrawal from the Paris Accord. The United States repeatedly suggests California’s program would incentivize other countries to negotiate with California to the exclusion of the federal government. That is a distinct possibility, but the United States offers no evidence that this has happened or will happen.” 

    “The WCI programme can now move ahead to achieve ambitious targets at lower costs, enabling participating states and provinces to achieve more together than they could do alone,” said Clayton Munnings, IETA’s West Coast Representative. 

    “It’s not just “society” or “the economy” that benefits from this market, it’s real businesses, made up of real people and their jobs and livelihoods that benefit,” he added.

    IETA is confident that this ruling may serve as an encouragement for further such linkages between state and provincial markets.

    “We hope the Department of Justice will stand down from its legally baseless attack on efficient market mechanisms,” said Nico van Aelstyn of Sheppard Mullin LLP, who represented IETA in the lawsuit. “However, if it does choose to appeal, we are ready to carry the fight to the Court of Appeals, which we are confident will uphold the District Court’s well-reasoned decision.”

  • 25 Jun 2020 9:36 AM | Anonymous member (Administrator)

    GENEVA, 25 June - IETA today released its governing Council’s vision for how the organisation will pursue the “net zero” climate ambition in policy advocacy, in support of the Paris Climate Agreement. The document can be found here.

    The Paris Agreement sets a goal of holding global average temperature increases to well below 2°C, while pursuing efforts towards 1.5°C. To get there, it aims for countries to reach a balance of sources and sinks in the second half of the century – often referenced simply as “net zero”. It provides support for trading between countries as they pursue this goal, consistent with clear reporting and accounting guidelines.

    The IETA Council’s vision draws upon the rich history of companies using voluntary strategies that set “carbon neutrality” goals for their business operations. These strategies often focus first on deep reductions and avoidances of emissions, while using verified offsets to compensate for any remaining emissions. 

    The Council notes that, “Paris calls on all of us to aim higher - to reach for that balance in sources and sinks that many are calling a “net zero” goal. This signals even deeper reductions and increasing amounts of removals.” 

    IETA recognises that current NDCs are far from this goal, and that they need to move urgently in the “net zero” direction. It supports the efforts of many countries and companies to set “net zero” goals and pathways to achieve them, using the power of market instruments and system linkages.

    It asserts that to deliver Paris goals, mandatory caps on greenhouse gas emissions will be required to decline to net zero, with the capacity to trade reductions and removals between countries – and between companies. This policy will produce carbon pricing signals that prompt companies to accelerate their transition to Paris-compliant levels. 

    “IETA’s work with governments around the world will emphasise the importance of accelerating work to make the “net” operational so that “net zero” is achievable,” said Dirk Forrister, President and CEO of IETA. 

    “By this, we mean that policies should enable companies and sectors to cooperate through trading policies, including use of natural climate solutions and a wide range of technological removals.” 

    The IETA Council emphasises clear and unequivocal support for the Paris Climate Agreement and the Intergovernmental Panel on Climate Change’s scientific findings. 

    In jurisdictions where carbon trading systems are difficult, it urges those using other carbon pricing systems (taxes, tax incentives, etc) to assure that they deliver comparable environmental performance. 

    “International cooperation through markets will be essential for achieving net zero, because not every country has the same opportunities to reduce or remove greenhouse gases – while others have more opportunities than they need,” Forrister added. “The trading system envisioned in Article 6 will bring these opportunities and needs together for mutual benefit of the countries involved – advancing the global goal.”

    “We want to make sure that the push for net zero is more than mere buzz words or lofty rhetoric,” said Forrister. “Those two simple words are chock full of substance, and we in the business community need to make sure they deliver in practice. That’s why IETA will pursue this vision in our work around the world.” 

  • 24 Jun 2020 10:51 AM | Anonymous member (Administrator)

    London (June 23) — IETA has joined with The European Federation of Energy Traders, the Association of European Energy Exchanges, and Eurogas in calling on the UK government to clarify its plans for carbon pricing after the country leaves the EU Emissions Trading System (ETS).

    The British government last month published plans for a UK ETS to start in 2021, and indicated that it would shortly elaborate plans for a Carbon Emissions Tax as an alternative option.

    The alternative plans currently do not offer the long-term predictability and visibility of carbon pricing beyond 2020, meaning companies are not able to properly hedge their carbon price risk, the associations said in a letter to Alok Sharma, the Secretary of State at the Department for Energy, Business, & Industrial Strategy.

    “It is … unclear to us whether A: The Government is deciding between an ETS or Tax, B: The Government is proposing [a tax] as a back-up in case of issues with an ETS, [or] C: The Government believes that an ETS will not be ready by 2021, and therefore an interim Tax is required,” the associations said.

    “We therefore urge the UK Government to provide clarity on the following matters as soon as possible: 

    1. The approach to carbon pricing in the UK post-Brexit and a timeline indicating the main actions foreseen for the development and implementation of the given approach. Should a linked UK ETS be the chosen option for the future, what would be the milestones to have it established by 1 January 2021? 

    2. The approach to Carbon Price Support in the UK beyond 31 March 2022. 

    3. The Carbon Emissions Tax rate for 2021, and the methodology to set it for the coming year as well as future rates in the event that it is introduced.”

    “The British Government has given plenty of detail on how a UK emissions trading system might work, but it has not yet made clear whether an ETS will be ready to start next January, nor whether it intends to impose a tax as an interim measure,” said Adam Berman, EU Policy Director at  IETA. 

    “Business needs clarity on this as a matter of urgency, so that planning and resources can be directed early enough to ensure compliance with the measures introduced in 2021."

    “We strongly urge the Government to ensure that the new UK ETS will be ready by the end of the transition period, and to prioritise work on a linking agreement between the UK ETS and EU ETS.”

    The letter also recommends that the UK remain part of the EU ETS until such time as a UK ETS can be established and linked to the EU market.

    “The UK and the EU should endeavour to agree a temporary linking arrangement under the terms of the Transition Period in the Withdrawal Agreement,” the four groups said.

    “In the event that the linking of the two systems cannot be agreed and/or implemented initially, the UK should maintain an ETS that is strongly aligned with the EU ETS in order to be able to agree the linking of the two systems in the future.”

    The full text of the letter to the Secretary of State can be found here.

  • 23 Jun 2020 9:36 AM | Anonymous member (Administrator)

    GENEVA, 23 June – Carbon market participants expect the COVID-19 pandemic to weigh on emissions allowance prices for the next two years, with price expectations for the coming decade also dropping, according to IETA’s annual GHG Market Sentiment Survey.

    The survey, conducted by PwC, reveals that respondents expect EU ETS prices to average €31.71/tCO2 in Phase 4 (2021-30), a reduction of 12% from last year’s €36.05/t prediction. By comparison, the December 2020 EUA futures closed at €24.16 on 19 June.

    “It would be unusual for any market to be feeling as optimistic now as it did a year ago,” says Dirk Forrister, IETA CEO and President. “However, it is encouraging that political will remains undimmed, and has even grown stronger in many jurisdictions as lawmakers understand that the post-COVID-19 recovery is an unparalleled opportunity to embed a sustainable and low-carbon pathway to our future.”

    The survey report will feature in a discussion during IETA’s Carbon Market Virtual Series event today at 1600 CET/1000 EDT. The report can be downloaded from the IETA website.

    The poll of 137 IETA member companies and 22 airlines also showed diminished expectations for all the major emissions markets over the coming decade. Respondents expect prices in the Western Climate Initiative, which groups California and Quebec, to be 12% lower over the coming 10 years, while prices in the US Regional Greenhouse Gas Initiative will be 27% lower.

    Prices in Mexico and New Zealand could see the largest drop compared to 2019 expectations, with NZ ETS allowance prices expected to be 35% lower, and Mexican prices 38% lower, than respondents forecasted last year.

    “The coronavirus pandemic has had an incontestable impact on the price outlook for carbon markets worldwide,” says Stefano De Clara, IETA’s Director of International Policy. “But what is most encouraging about the survey findings is that this is only viewed as a temporary challenge, and the appetite for action remains robust and indeed is growing.”

    “This survey reveals bearish sentiment around carbon prices across all emission trading regimes on account of COVID-19, with an upturn not expected for perhaps one to two years. Similarly, the expansion of carbon pricing regimes to other countries is likely to slow,” says Ian Milborrow, Partner at PwC.

    “There are, however, more positive signals around the greater adoption of absolute carbon targets by corporations and a resurgence in customer interest to mitigate the environmental impacts of the products and services they choose. This should underpin pricing for voluntary carbon credits over the medium term,” he adds.

    This year’s survey also investigated the growth of Natural Climate Solutions (NCS) over the last 12 months, and the prospects for NCS to contribute to achieving the goals of the Paris Agreement. Around one-fifth of survey respondents felt that the biggest challenge to wide-scale investment in NCS is the lack of compliance systems that recognise the benefits of carbon storage in natural sinks, while the same number also expressed concerns over the permanence of such removals.

    NOTE: This year’s IETA survey was conducted among IETA members as well as members of the International Air Transport Association, with more than one response per organisation possible, and open from 1 April to 24 April 2020. We received responses from 137 IETA and 22 IATA 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 some answers may not add up to 100%.

  • 18 Jun 2020 9:47 AM | Anonymous member (Administrator)

    Contact: press@ieta.org

    TORONTO, 18 June – Emerging economies are tapping carbon pricing to ensure clean, low-emissions development, as profiled in the third and final instalment of IETA’s Carbon Market Business Briefs.  

    Today’s publication of Latin American and South Africa’s briefs showcase how developing countries are turning to market forces to drive clean growth. While the briefs focus on Mexico, Colombia and South Africa, other nations in South America are exploring the use of carbon pricing for the future, including Chile, and will be added to the collection when the details are clearer.

    “These briefs focus on countries where a clear price on emissions is starting to make a real impact in delivering greener development pathways,” says Dirk Forrister, President and CEO of IETA.

    “Businesses are essential to ensuring these goals are met. These briefs can help business leaders become well-informed to play their part in building a clean economy.”

    The latest Carbon Market Business Briefs will be the subject of a webinar today at 4pm Brussels/9am Colombia, as part of the IETA Carbon Market Live series, which is free of charge with advance registration. A Spanish-language event will be held tomorrow, at the same time.

  • 10 Jun 2020 6:22 AM | Anonymous member (Administrator)

    Contact: press@ieta.org   

    GENEVA, 10 June – Carbon pricing is increasingly embedded in economies across Asia, as showcased in the second instalment of IETA’s Carbon Market Business Briefs.

    Today’s publication of Asia and CORSIA briefs show that policymakers are committed to using market signals to drive emissions reductions, from reforms to the region’s first ETS, in New Zealand, through to the development of the world’s first carbon pricing sectoral initiative, CORSIA.

    “We are pleased to see carbon pricing feature prominently in governments’ plans to cut emissions, adapted to suit local priorities and advance the goals of the Paris Agreement,” says Dirk Forrister, President and CEO of IETA. “These local variations are why IETA’s Carbon Market Business Briefs are an essential tool for business executives, because they provide a one-stop shop for the latest information, market insights and links to key resources.”

    Other briefs released today include a look at reformed markets in South Korea and Kazakhstan, China’s eight pilot systems, the use of markets to cut emissions from buildings in Japan, Taiwan’s preparations for emissions trading, and Australia’s baseline-and-offset system.

    The latest Carbon Market Business Briefs will be the subject of a webinar today at 4pm Sydney/2pm Singapore, as part of the IETA Carbon Market Liveseries, which is free of charge with advance registration. The third and final instalment, focusing on Latin America and South Africa, will feature in an event on 18 June.

  • 03 Jun 2020 5:00 AM | Anonymous member (Administrator)

    Contact press@ieta.org

    GENEVA, 3 June – Today IETA announced the launch of its latest collection of Carbon Market Business Briefs, offering business executives a quick guide to each of the main carbon markets in operation around the world.

    “The IETA Business Briefs are written for business leaders who want to stay at the cutting edge of carbon markets and new prospects for growth,” says Dirk Forrister, President and CEO of IETA. “While there are many common features, each market also reflects local characteristics, tailored to local challenges and opportunities – and, in the business of carbon markets, these details matter. These briefs bring all of the essential elements together for a quick view.”

    The latest Carbon Market Business Briefs are scheduled for release in three tranches: Europe and North America today; Asia and CORSIA on 10 June; and culminating on 18 June with the release of our Latin America and South Africa briefs. Each release coincides with a related webinar as part of the IETA Carbon Market Live series, which are free of charge with advance registration.

    With the continued expansion of emissions trading globally, the IETA collection outlines the coverage, deadlines, penalties, flexibilities, trading dynamics and other features for each market. The briefs provide commentary from local IETA members and partners on recent market developments, including the impact of the COVID-19 pandemic and near-global lockdown.

    “Even in these challenging times, countries are considering how they can contribute greater ambition to advance the goals of the Paris Agreement,” Forrister adds. “We expect increasing use of markets to drive deeper emission reductions, foster innovation and stimulate climate-friendly economic growth. As these markets expand, we hope to update these Business Briefs regularly to enable more companies to pursue the new opportunities they create.”

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