The world is really sick.
A few weeks ago, the Intergovernmental Panel on Climate Change (IPCC) released a special report about the impact of a 1.5°C increase in global temperatures, and the emission pathways to prevent further warming. Unsurprisingly, it received extensive coverage around the world, the most dramatic headline – for its sheer bluntness – coming from The Guardian.
Released ahead of the annual UN climate talks, held in Katowice, Poland this year, the IPCC’s report makes it clear – several times – that carbon pricing is central to all pathways to 1.5°C. This has been picked up and featured in op-eds in newspapers both at a national level, such as The Globe and Mail and the The New York Times, and more locally, like the Montana Standard.
In Australia – where partisan rancour surrounding climate change shows no sign of abating – carbon pricing was once again thrust into the spotlight in October, following a by-election which some dubbed a referendum on the ruling Coalition’s climate policy. BHP’s head of sustainability and climate change, and IETA board member, Fiona Wild spoke at an event in the country just two days after the poll and described the IPCC report as a “rallying cry” for climate action and the need for a price on carbon.
Five years ago, the world was home to just a handful of carbon markets: the EU ETS, the New Zealand ETS, RGGI, and the newly launched California and Québec markets (pre-linking). That number has grown substantially since 2013, and continues to grow: in its 2018 status report, the International Carbon Action Partnership reports that more than 50% of global GDP is now subject to emissions trading. And just this week, Mexico’s government released draft regulations for its pilot programme, starting in January 2019.
Why do markets matter? The IPCC report highlights a need for a major shift in investment patterns. While the amount invested in clean technologies is steadily increasing, it is not a pace concurrent with the 1.5°C goal. Carbon markets can help facilitate that shift, by sending a price signal through the economy that disincentivises emissions-intensive capital expenditure, and that also helps drive innovation to develop the technologies we need tomorrow – and tomorrow is coming faster than we thought, according to the IPCC.
The report lays out pathways to realise the goals of the Paris Agreement and must be at the forefront of policymaker’s minds as they head to Poland to finalise the Agreement’s rulebook. If you or a loved one were sick, you would listen to the doctor’s advice; the IPCC scientists are the planet’s doctors and they’ve laid out the routes to survival. A sensible choice would be to heed their advice.
Over the coming weeks, as preparations for COP24 ramp up a gear, IETA and our members will continue to make the case for smart, well-designed and environmentally rigorous carbon markets. If you want to be involved in designing these new markets, join us now and lend your voice to the chorus.
For more information on IETA and our work, see www.ieta.org