ieta_eea_adb_icao_imo_vatican9 September 2016: Over the last couple of weeks, a number of events, initiatives and publications have highlighted the role of market mechanisms in reducing greenhouse gas (GHG) emissions and other pollutants. In addition, both Pope Francis and the UNFCCC Secretariat are encouraging climate action on an individual level.

Pricing Pollution

With a focus on market-based mechanisms, the Asia Pacific Carbon Forum 2016 (APCF 2016) celebrated the “fresh wind in the sails of climate policy implementation” offered by the adoption of the Paris Agreement in 2015. Convening under the theme, ‘Cooperative Climate Action in Asia and the Pacific: Mobilizing Climate Finance and Carbon Pricing,’ the Forum explored using carbon markets for climate change mitigation – especially how co-benefits from climate action can build resilience. Topics of discussion also included ways finance and climate-friendly policies can be deployed as part of nationally determined contributions (NDCs) under the Paris Agreement, aligning the Asia-Pacific’s existing and new carbon markets and mechanisms with the Agreement, supporting NDC implementation through carbon pricing, capacity building, technology transfer, innovations and new ideas.

Approximately 300 participants from 60 countries attended APCF 2016. According to International Emissions Trading Association (IETA) President and Chief Executive Officer Dirk Forrister, the event “drew together a wealth of experience in using market incentives to cut carbon emissions.” He noted that attendees were able to learn “how the new markets in Korea, China and the global aviation industry are shaping a future vision of international cooperation” in climate protection.

IETA, the Asian Development Bank (ADB), the Institute for Global Environmental Strategies (IGES) and the UNFCCC Secretariat, in collaboration with the Global Green Growth Institute (GGGI) co-organized APCF 2016. The event was held on 5-6 September 2016, on Jeju Island, Republic of Korea, in conjunction with Global Green Growth Week 2016, organized by GGGI. [IETA Press Release] [Asia Pacific Carbon Forum 2016 Website] [UNFCCC Press Release] [IISD RS Story on Global Green Growth Week]

Market-based instruments, whether in the form of emissions trading, taxes, recycling fees or polluter-pays schemes, are tools for both a healthier planet and a healthier public, according to the European Environment Agency (EEA). However, recognizing that achieving environmental goals erodes the very tax base these revenues are sourced from, EEA published a report examining the design, application and future prospects of European environmental taxes. The report, ‘Environmental Taxation and EU Environmental Policies,’ finds that these taxes are critical in decoupling pollution and resource depletion from economic development.

The authors identified 18 binding and 24 non-binding market-based instruments currently in force in EEA member countries. In the report, EEA recommends policymakers consider challenges such as the decreasing tax base, economic competitiveness and distributional consequences when designing labor and environmental taxes for the long-term. [EEA Press Release] [Environmental Taxation and EU Environmental Policies]

Three economic instruments are enshrined in Article 6 of the Paris Agreement, including: transfer of mitigation outcomes (similar to emissions trading); a Sustainable Development Mechanism; and a framework for non-market approaches. In addition, the Agreement recognizes the role of non-state actors. These two elements of the Paris Agreement came together in a series of five regional workshops organized by the UNFCCC Regional Collaboration Centres to gather non-state actors’ views on the Agreement’s economic instruments.

The Secretariat has released five regional reports and a synthesis report summarizing developing countries’ views on the Article 6 mechanisms. The reports are based on the dialogues held in Bangkok, Thailand (9 June), St. George’s, Grenada (12 July), Bogotá, Colombia (14 July), Entebbe, Uganda (18 July) and Lomé, Togo (22 July).

The meetings included participation from a wide range of actors, from regional bodies, organizations and think tanks to consultants, academics, researchers and project developers. The participants put forward their views, generally concluding that these economic instruments can help countries achieve their NDCs, but could be linked with the UN Sustainable Development Goals (SDGs) to integrate co-benefits such as adaptation and poverty alleviation. They also called for strong transparency through monitoring, reporting and verification (MRV), and noted that emissions trading really requires quantified NDCs that are comparable in their units and timelines. [UNFCCC Press Release] [UNFCCC Regional Collaboration Centres Website] [Regional Non-State Actor Dialogue on Article 6 of the Paris Agreement – Synthesis Report] [Asia-Pacific Non-State Actor Dialogue on Article 6 of the Paris Agreement Summary Report] [Caribbean Non-State Actor Dialogue on Article 6 of the Paris Agreement Summary Report] [East and Southern African Non-State Actor Dialogue on Article 6 of the Paris Agreement Summary Report] [Latin-American Non-State Actor Dialogue on Article 6 of the Paris Agreement Summary Report] [West and Central Africa Non-State Actor Dialogue on Article 6 of the Paris Agreement Summary Report]

The International Civil Aviation Organization (ICAO), which represents a sector not included in the Paris Agreement, will be considering the adoption of a market-based measure (MBM) to reduce emissions in international aviation at its upcoming Assembly on 27 September – 7 October. The draft plan has received support from the US and China, which worked closely together bilaterally and in multilateral consultations as a text on the measure was developed. The two countries are planning to be early participants in the measure. Another 42 countries, as members of the European Civil Aviation Conference (ECAC), have expressed their support through the Bratislava Declaration. In endorsing the Declaration, the countries “intend to implement the Global Market-Based Measure scheme for international aviation from the start” and welcome the announcements by other States that they will participate early. They further pledge to work actively to reach a successful outcome at the ICAO Assembly. [White House Fact Sheet] [ECAC Press Release] [Bratislava Declaration]

Another area where emissions trading or a carbon tax is being discussed is the international shipping industry, as stakeholders consider ways the sector – also excluded from the Paris Agreement – can contribute to climate change efforts. While the International Maritime Organization (IMO) has not put forward a potential market-based mechanism, efforts have largely focused on energy efficiency. On 23-25 August, IMO provided an overview of its regulatory regime for increasing efficiency and controlling GHG emissions from ships at a workshop that gathered South African government officials. The ‘MARPOL Annex VI and Technology Transfer’ workshop is one of several Global Maritime Energy Efficiency Partnerships (GloMEEP) workshops held to increase awareness about Attained Energy Efficiency Design Index (EEDI), Required EEDI and Ship Energy Efficiency Management Plan (SEEMP). [GloMEEP Press Release] [IMO Press Releases]

Personal Pledges

Many have called climate action a moral imperative, including Pope Francis in his encyclical letter, Laudato Si’, from May 2015. This year, on the World Day of Prayer for the Care of Creation, which is celebrated on 1 September, Pope Francis delivered a message calling the day “a fitting opportunity to reaffirm [believers’ and communities’] personal vocation to be stewards of creation.” In addition to deploring the destruction of biological diversity, ecosystems and wetlands, the Pope highlights climate change and its consequences, including severe weather, and, in part, the refugee crisis.

Noting that the world’s poor are “most vulnerable and already suffering its impact” while being the least responsible, he addresses the “ecological debt” of the global North to the global South, and highlights the SDGs and Paris Agreement as one way to begin repaying it. He states, “Now governments are obliged to honour the commitments they made, while businesses must also responsibly do their part. It is up to citizens to insist that this happen, and indeed to advocate for even more ambitious goals.” [Message of Pope Francis on World Day of Prayer for the Care of Creation]

Fittingly, the UNFCCC Secretariat launched a Global Citizens Climate Pledge on 9 September, allowing citizens all over the world to express their concern about climate risks and take personal action. Arising from a Finnish initiative, the project helps individuals calculate their climate footprint and then pledge to reduce it by half by 2020. UNFCCC Executive Secretary Patricia Espinosa highlighted “the urgent role that individuals are playing in addressing climate change,” adding that by taking “hands-on action to reduce our personal climate footprint, we join a global movement of action on climate change.” [UNFCCC Press Release] [Climate Pledge]