Climate Action 2011-2012

Table 1. oTher emissions TradinG ProGrammes
(Taken From naTional GovernmenT websiTes)
Country Name Start Goal Key features
Australia The Carbon Pollution 2011 Reduce 60% of Australian The first and largest mandatory emissions
Reduction Scheme (CPRS) emissions by 2050 trading scheme in the Asia-Pacific.
New Zealand NZ ETS 2008 Reduce emissions Covers all GHG from all sectors.
compared with 1990 levels
Korea Domestic emissions trading 2013 Reduce emissions by 30% Closely modelled on the EU ETS: petrochemical
scheme by 2020 producers, paper and wood processors, power
generators, steel companies, and electronic chip.
China domestic cap and trade 2013 Six provinces and cities Contemplating extending to become a national
scheme starting in 2013 scheme by 2015.
Brazil Brazilian Emission 20?? Emission reduction target The Brazilian stock exchanges and the Securities
Reductions Market (BERM) close to 40% of its projected Commission will be operating the market.
BAU emissions by 2020
India Perform, Achieve and 2011 Reduce electricity’s Rewarding significant energy efficiency efforts in
Trade: PAT industrial consumption the country’s most energy intensive industries
by 65%
with tradable energy saving certificates, which
can easily be translated into carbon.
US/Canada Western Climate Initiative 2012 Reduce industrial emissions Seven US states and four Canadian provinces,
partnership (WCI) 15% below 2005 levels respectively responsible for 13% and 50% for
by 2020
their countries’ GHG emissions signed up to
participate, though current US politics means
that some have stopped participating.
74 climateactionprogramme.org
Provinces in a linking of sub-national emission trading
schemes across North America (see Table 1).
These developments show that carbon trading is still
widely viewed as a cost-effective climate change mitigation
policy. But the current state of the market and its future
success is still, to some extent, dependent on post-2012
international agreements and their fulfilment.
Policy chanGes in euroPe
European confidence in the carbon market has been
suffering in a variety of ways:
• The financial crisis has led to scepticism about marketbased
mechanisms.
• The carbon market’s loss of international political
momentum has had its impact in Europe too.
• The low price triggered calls for additional policy measures
to make up for the supposed failures in the EU Emissions
Trading Scheme.
In an effort to support future market prices, the European
Commission has been seeking support for the idea of a set
aside of a certain amount of emissions reduction units over
the third trading phase (2013-20) to remove part of the
excess supply that is keeping prices low. There is a danger
of a vicious cycle that could potentially trigger a number of
additional policy interventions, trying each time to react to
prices but in fact only reducing prices further.
Following the security issues in the EU ETS, a complete
overhaul of market integrity regulation is under way to
protect the market from manipulation. The EU regulator
plans to treat emission allowances like financial instruments
and extend the remit of the financial supervisory authorities
to the carbon market. IETA is not convinced that this will
be an appropriate way forward given the characteristics of
emission allowances as environmental commodities, but we
will work with the regulators to tailor appropriate exemptions
from financial rules for industrial market participants whose
presence is vital for a well-functioning market.
More positively:
• Member states’ national registries are being brought
together into a single centralised European Union registry,
which should provide a major structural improvement.
• Work continues to add some more sectors into the EU
ETS, for instance aviation from 2012, and maybe the
maritime sector after 2017.
The FuTure For carbon TradinG
In the post-2012 world, Europe will continue to be the
global leader on emissions trading and carbon markets.
It seems probable that any serious move towards linking
regional and national trading schemes to create the
beginnings of a world market, in substitution for the Kyoto
vision of a UN-driven global system, will start with or
involve Europe. The EU’s continued use of the CDM will
keep it at the heart of the emissions trading world.
Market participants must believe in the stringency of the
cap compared to a business as usual scenario, as well as in
the accounting framework that certifies that an emission
allowance represents one tonne of CO 2
(monitoring,