That was California Governor Jerry Brown’s call for action as he opened the “Carbon Pricing Delivering Climate Ambition” forum. This was IETA’s main event at the recent Global Climate Action Summit (GCAS) in California, held jointly with the governments of California and Canada, the European Commission, the World Bank, the Environmental Defense Fund and ICAP. With a crowd of about 400 guests, our forum took stock of the many challenges and opportunities in ‘stepping up’ climate action to greater levels of ambition. Carbon pricing was a major theme across the week, which concluded with a new agreement between California and the European Commission to step up their cooperative work on carbon markets with a view towards better alignment.
GCAS kicked off a busy period of conferences around the world for IETA staff in the lead up to COP24 in December. This year’s negotiations will be an important event for all carbon market stakeholders, as we await the final Paris Agreement ‘rulebook’, due to be signed at Katowice. For some time now, IETA’s International Working Group has been working closely with the negotiators of Article 6 – which outlines the provisions for market mechanisms – to put forward the business point of view. It is our belief that, if these mechanisms are well designed, they will unlock the power of markets for the decarbonisation challenge and help deliver the deeper emissions cuts that are needed. We will continue our consultations with them as they approach ‘decision-time’ at the annual climate conference at the end of the year.
Ahead of COP24, the European Commission is consulting on a new a strategy for long-term greenhouse gas emissions reduction. IETA, via our EU Working Group, will be contributing the business voice to this important document, which is due to published at the end November. It will then feed into discussions in the Talanoa Dialogue – an international process to take stock of the collective and individual efforts towards the goals of the Paris Agreement. This is a year-long process, launched by the Fijian Presidency at last year’s UN climate talks, that will culminate in political discussions about raising ambition at Katowice.
While Europe’s long-term climate strategy is being developed, prices in the EU ETS have trended up and reached a 10-year peak, above €25, in early September. It is encouraging to see the market responding to energy fundamentals – such as coal/gas pricing differentials, nuclear availability and weather variations – rather than policy decisions, which have been the major price driver for several years. With the EU ETS reforms approaching in 2019 and beyond, the market looks well placed to deliver emissions reductions at the lowest cost across Europe.
EU Policy Director
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