What happens in Marrakesh now that the Paris Agreement has entered into force?

Marrakesh

Photo credit: Luc Viatour

Friday, November 4, 2016 was a day for the record books: it marked the day that the landmark Paris Agreement on climate change entered into force, unlocking the Agreement’s legally binding rights and obligations for countries that have joined the agreement. This milestone came almost four years earlier than many expected even just last year. 

Rapid entry into force proves that the diverse political coalition of countries that constructed the Paris Agreement – both developed and developing, large and small – is alive and strong around climate change. It sends a powerful, immediate signal to global markets that governments take the agreement seriously, and that now is the time to ramp up investment in a prosperous, low-carbon future. 

Early entry into force also adds a sense of urgency to the work of the just-opened climate talks in Marrakesh under the United Nations Framework Convention on Climate Change (UNFCCC), known as COP22, from November 7-18. The inaugural session of the Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement (CMA1) will take place in conjunction with COP22. 

What to expect at Marrakesh

Countries in Marrakesh will be expected to provide concrete evidence that the world is on track to effectively implement the Paris Agreement.

The goal of the Marrakesh gathering is to maintain the strong momentum on climate action that comes from the trio of climate wins we’ve seen recently: entry into force of the Paris Agreement, the adoption of a market-based-measure to tackle significant climate pollution from airlines, and the phase down of HFC “superpollutant” greenhouse gases. 

To continue that momentum, countries in Marrakesh will be expected to provide concrete evidence that the world is on track to effectively implement the Paris Agreement, in the form of an ambitious workplan to complete the Agreement’s necessary infrastructure. The Agreement provides an inclusive, solid foundation for global climate action, but the “nuts and bolts” of how to implement the Agreement were left to future meetings.

Key implementation tasks that will occupy negotiators in Marrakesh include Finalizing the Paris Agreement’s “enhanced” transparency framework and building an effective ambition mechanism.

Finalizing the Paris Agreement’s “enhanced” transparency framework

Transparency is the backbone of the Paris Agreement: It drives climate action by holding countries accountable to their commitments on action and support. 

But often overlooked are the additional direct domestic benefits of transparency to countries and subnational actors, which helps them to:

  1. understand the scope of the climate challenge;
  2. develop strategies to address it;
  3. assess the extent to which policy interventions are succeeding; and
  4. more easily access resources needed for effective implementation, including via carbon markets.

The Paris Agreement lays out common and legally binding rules that require – for the first time – each country to regularly report on progress they are making in meeting their commitments.  And those reports must go to a panel of experts for technical review. As EDF President Fred Krupp wrote, “It's the environmental version of President Reagan's ‘trust but verify.’”  

The details of the Agreement’s enhanced transparency framework must now be elaborated to ensure that countries demonstrate credibly and publicly how they are making progress against their commitments. Support should be made available to assist countries that need help to meet these new requirements. A variety of climate funds and support programs currently exist that can help developing countries to build the necessary institutional and technical capacity. 

At the same time, nations must now prioritize efforts to develop a set of clear accounting rules that prevent “double counting” of emissions reductions and facilitate the high-integrity emissions trading needed to drive emissions down and investment up. Double counting – applying one ton of emissions reductions towards more than one commitment, a sleight of hand that cheats the atmosphere – is explicitly prohibited by the Paris Agreement no less than six times.

Building an effective ambition mechanism

We know that the commitments pledged by countries thus far are not enough to limit warming below new temperature limits set by the Paris Agreement – “well below 2 degrees above pre-industrial levels” – let alone enough to meet the Agreement’s aspirational limit of 1.5 degrees.

That’s why the heart of the accord is the process it establishes to periodically review countries’ progress toward meeting their commitments, and to ratchet up ambition over time, beginning with a global assessment (a “facilitative dialogue,” in UN-speak) in 2018 and updates of commitments in 2020.

The Paris Agreement recognizes that cooperation on emissions trading between countries can help drive the ambitious emissions reductions that science demands. Under Article 6, the Agreement encourages the growing use of bottom-up agreements between jurisdictions to link markets for greater efficiency, as California and Quebec have done. Countries that prefer the option of an international structure can wait to utilize the nascent new market mechanism outlined under Article 6.4 of the Agreement – the strong rules and accounting standards necessary for this new approach must also be fleshed out by negotiators in the coming months and years.

Prompt agreement on accounting for market mechanisms under Article 6, including how to practically implement the requirement to avoid double counting of emissions reductions, will help quickly build the infrastructure needed for carbon markets to drive ambition. In particular, the facilitative dialogue among Parties in 2018 to assess global progress appears to be a good time to provide additional clarity on the tools available under the Paris Agreement to increase ambition. 

What will happen during CMA1 

Although the Paris Agreement specifies that the significant amount of work necessary to build its essential infrastructure must be completed by CMA1, countries are likely to agree a “procedural fix” to give themselves the time necessary to develop the Paris Agreement’s rulebook. For example, Parties could agree to keep CMA1 formally in session rather than gaveling it closed at the end of the COP, extending CMA1 – and the associated deadlines – until perhaps 2018. Countries used a similar fix to minimize procedural wrangling in the successful negotiations that led to the Paris Agreement. Given the Paris Agreement’s surprisingly quick entry into force, it is not surprising that negotiators will need more time to complete the long list of tasks on their plate.

The upshot is that substantive discussions will occur instead in the COP, the APA (the “Ad Hoc Working Group on the Paris Agreement”) and the UNFCCC’s subsidiary bodies, in which all Parties to the UNFCCC can participate. As long as these bodies move promptly to accomplish their “to do” list, keeping discussions under the COP provides an additional benefit to inclusiveness and political “buy-in.” That's because decisionmaking in the CMA is limited to only those Parties to the Paris Agreement, currently slightly more than half of those participating in the UNFCCC, but expected to be nearly equal by 2018. 

The continuing need for national and “minilateral” action

A decade ago, the presumptive approach to climate progress was a global governance structure driven by international institutions such as the U.N. Now, the challenges are more urgent and the landscape is more decentralized. 

"Minilateral" cooperation among groups of countries is emerging as a focal point for climate action. The prospect of “climate clubs” is gaining currency as a vehicle for securing greater investment, market access, and financial stability, and for driving greater ambition in climate action. For example, a coalition of carbon market jurisdictions, or “CCM”, could go faster and farther than the UNFCCC in promoting coordination among carbon markets, ensuring environmental integrity, and ultimately spurring greater ambition in climate action. Robust coalition standards could potentially inform global approaches, complementing and building additional momentum for climate efforts under the UNFCCC.

No major environmental problem is solved with one document. The Paris Agreement provides a solid foundation for cooperation among jurisdictions, but nations recognize that progress on climate depends on implementation at home. It’s time for countries to roll up their sleeves and get to work on the rules, guidance, and domestic policies that will put Paris into practice. 

The significant political will reflected in the entry into force of the Paris Agreement now needs to be translated to building the essential infrastructure for implementation. The world is watching.

Posted in Marrakesh, UN negotiations| Leave a comment

What to expect for forests and REDD+ at COP22 in Marrakesh?

Forest

Photo credit: Flickr @CIFOR

With the Paris Agreement entering into force on November 4th, climate negotiators at this years’ climate talks (COP22) in Marrakesh will have to roll up their sleeves and get to work on the rules and guidance that will translate Paris climate commitments into action.

As the only sector with its own article in the Paris Agreement, the land sector will be discussed this year in the context of implementation and progress – especially REDD+. There are no agenda items directly addressing forests at COP22, so REDD+ negotiators will need to focus on how REDD+ fits into other items on mitigation, accounting, transparency, and markets. Forests will also be highlighted during a series of COP events in the Global Climate Action Agenda (GCAA).

Forests in the Global Climate Action Agenda

On November 8th—the US election day—the Global Climate Action Agenda (GCAA) will showcase important forest initiatives. Held alongside the negotiations, the GCAA is meant to highlight initiatives not only from nation states, but also from a broad set of stakeholders including civil society and the private sector. Partnerships among these stakeholders will be especially emphasized.

The GCAA will also highlight the New York Declaration on Forests annual assessment report, which was released globally on November 3rd. This year’s report focused on private sector’s implementation of their zero-deforestation supply chain commitments. The report also gives a good overview of overall progress against halving deforestation in natural forests by 2020, which should be at the center of the discussions at the GCAA forest showcasing event.

While I find it heartening that many companies based in North America, Europe, and Australia are making deforestation commitments, the world’s forests need countries and companies in emerging markets to start implementing and reporting on their commitments.

Negotiations: Transparency, Accounting, and Markets

At COP22, REDD+ negotiators will most likely be found at the sides of their colleagues that focus on transparency and accounting. REDD+ methodological guidance included in the Warsaw Framework for REDD+ and other previous decisions already ensures a high level of transparency in any REDD+ programming. Experience with effective transparency provisions under REDD+ provides an opportunity to inform the development of the “enhanced transparency framework” that will be critical to the success of the Paris Agreement.

Accounting in the land and forest sector is as important as that in other sectors – if not more important, given the sector’s potential to remove carbon dioxide from the atmosphere. It is critical to ensure that consistent principles apply throughout all sectors, including effective accounting that avoids double counting of emissions reductions.

To promote environmental integrity between countries’ policies to implement REDD+, a report published today by EDF and four other leading organizations collected recommendations from experts from REDD+ countries and technical assessment teams on forest reference levels. It provided key guidance for tropical countries to receive payments for results from REDD+.

The negotiations on markets will probably be some of the most interesting. Markets could provide a much needed source of funding to support results from REDD+, while REDD+ could provide useful lessons for the development of accounting guidance for Article 6 (related to transfers of mitigation outcomes), as detailed in our joint submission with four other leading observer organizations.

Countries may choose to use REDD+ emission reductions as Internationally Transferred Mitigation Outcomes (ITMO) under Article 6.2 of the Paris Agreement, consistent with the Warsaw Framework and other REDD+ decisions. The use of ITMOs toward national commitments must also be consistent with the accounting guidance yet to be developed under Article 6.2, including the clear requirement to avoid double counting of emissions reductions.

The country of Brazil offers an example of where the REDD+ and ITMO debate is playing out. Recently, the Brazilian Coalition on Climate, Forests and Agriculture, made up of over 130 leading environmental NGOs and companies has recently, after extensive internal discussion, approved a consensus position on REDD+. Their position – that can be found here – posits that the positions of Brazil’s international climate negotiators dealing with land use – in particular their opposition to market-based REDD+ and failure to recognize subnational REDD+ systems in national carbon accounting – do not reflect the overwhelming majority views on these issues in Brazilian society. It will be interesting to see these differences between Brazilian society and their climate negotiators debated at the COP.

It is not clear how forests or REDD+ will be featured in the new market mechanism to contribute to the mitigation of greenhouse gas emissions and support sustainable development (under Article 6.4 of the Paris Agreement). I don’t expect negotiators to start discussing a new REDD+ methodology for Article 6.4 in Marrakesh, and this is likely many years down the road.

As previous analysis has shown significant costs savings from using REDD+ in carbon markets, I expect countries interested in using markets to discuss the details of transacting REDD+ ITMOs next year, either within the UNFCCC negotiations or in clubs of carbon markets in parallel to the UNFCCC.

The Marrakesh COP will probably yield less tangible text related to REDD+ than past UNFCCC meetings, though REDD+ negotiators will probably have much to discuss with each other outside the negotiating rooms. What I will be looking for are signs that REDD+ implementation is accelerating and how the accounting and transparency discussion in the UNFCCC might impact REDD+ and the forest sector.

Posted in Deforestation, Forestry, Marrakesh, REDD+| Leave a comment

Case Studies: Scaling Indigenous and Community Enterprises in Brazil, Challenges and Opportunities ahead

An indigenous woman of the Xingu Seed Network at work | Photo courtesy: Tui Anandi and Danilo Urzedo (ISA)

Brazil is a great laboratory for studying indigenous and community enterprises that support forest conservation and community development. It has abundant and diverse indigenous and community projects and enterprises across the Amazon.

As part of an initiative to foster the growth of these enterprises, EDF catalogued as many examples as we could find and used the Canopy Bridge Atlas to map indigenous enterprises in the Amazon Basin. We selected three cases to investigate further, which are unique in different ways, but face similar challenges.

By studying the three cases, we found that:

  • Securing operating and sanitary licenses from the government has been the most significant challenge for the enterprises due to bureaucratic hurdles. They either are currently experiencing problems in obtaining these licenses or encountered significant problems in the past.
  • Government is also a key source of initial and steady demand, either directly or indirectly, of the products of these enterprises.
  • The enterprises have partnered with allies for technical assistance, start-up funding, and/or continuing funding, in order to scale and maximize impacts.

The Babassu Nut Collecting Cooperative

The Cooperativa Interestadual das Mulheres Quebradeiras de Coco Babaçu (CIMQCB) is a decentralized cooperative formed by women from forest communities who collect and process babassu nuts in Brazil. CIMQCB sells its main products, babassu nut soap, oil, and flour, to various types of local, regional, and national customers.

While obtaining sanitary licensing from the government has been an obstacle for CIMQCB to accessing some markets, the federal government’s school food acquisition program is also a consistent and large client for one of its sub-groups.

Partnerships with foreign development programs have been essential for its organizational development. The European Union and the German Development Bank were some of its first donors. Currently, the cooperative receives supports from the Program of Small Ecosocial Projects.

Read full case study 

The Jupaú Cassava Flour

The Jupaú indigenous people, also known as Uru-Eu-Wau-Wau, who were officially contacted for the first time forty years ago. Their traditional processing techniques create a unique flavor and have attracted significant demand for their product.

However, the Jupaú are not formally organized as a business and are faced with the challenge of meeting sanitary and business regulations as well.

To help them overcome the challenges, Kanine, a local non-profit, is working with the Jupaú to find a culturally appropriate manner to increase their production and secure appropriate licenses from the state, while maintaining their unique and traditional processing that makes their product special.

Read full case study

The Xingu Seed Network

The Xingu Seed Network (RSX) was officially established in 2007 by an association of individuals and organizations working on community development in the Xingu River region. The network sources seeds for 200 different native species that are used for reforestation in the Amazon and Cerrado regions. In RSX, indigenous women are the majority of the seed collectors and the activity is an important source of income for them.

Financial and technical support from donors has played a key role in RSX’s growth. It is on the pathway to financial sustainability from its seed sales ($95,000 in 2015).

Similar to the other cases, business regulations and obtaining the proper licenses have been challenging for RSX. The Brazilian Forest Code drove a significant amount of early demand for their seeds, recent changes to it depressed demand.

Read full case study

Overcoming bureaucratic licensing hurdles, finding right partners, connecting with government programs, and complying with government regulations are the key challenges and opportunities the enterprises highlighted here and many others face.

In the future, EDF and our partners will continue to work with these indigenous and community enterprises throughout the Amazon to help them to overcome the challenges, scale their businesses, and maximize their impacts. There is still much to be done to conserve what is left of the Amazon forest.

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ICAO’s market-based measure could cover 80% of aviation emissions growth in mandatory phase

icao-logo The International Civil Aviation Organization (ICAO), the UN agency charged with setting standards for international flights, has set a goal of “carbon neutral growth from 2020” – i.e. capping net emissions at year-2020 levels. The ICAO Assembly today adopted a global market-based measure that lets airlines purchase high-quality emission reductions to offset the carbon growth above the cap.

Analysis of high-quality data on aviation emissions projections demonstrates the ICAO market-based measure is a critical step forward for climate action, and could prevent nearly 2.5 billion tonnes of CO2 emissions into the atmosphere over the first 15 years of the program. Here’s how.

The market-based measure provides that:

  • from 2021-2023, nations would opt in to a voluntary pilot phase;
  • from 2024-2026, nations would opt in voluntarily to another phase;
  • from 2027-2035, all nations would be required to participate, with some exceptions;
  • least developed countries, land-locked developing countries, and small island developing countries would all be exempt throughout (although these states could opt in at any time if they so choose).

What this means for ICAO’s commitment to “carbon neutral growth from 2020” depends on how many more countries decide voluntarily to opt in.

EDF has developed an interactive tool to allow users to estimate how many emissions would be covered of the billion-tonne gap between projected emissions and the 2020 cap, if various countries opt in to the MBM.

The tool provides unique calculations of the aviation sector’s emissions growth based on projections from ICAO, industry and analysts. The focus on emissions provides a direct estimate of the aviation sector’s contribution to climate change that complements analyses based on aviation’s traffic growth, measured in revenue tonne kilometers (RTKs).

Here’s the snapshot of the tool as of the adoption of the market-based measure on October 6. With Qatar and Burkina Faso becoming the 64th and 65th countries to signal their intent to participate in the MBM from the start, 65% of emissions growth above 2020 would be covered in Pilot + Phase 1, and nearly 80% (79%) of these emissions would be covered during Phase 2 of the program (2027-2035). Importantly, 77% of anticipated emissions growth above 2020 would be covered over the first fifteen years of the program.

aviation-tool-100516_2

The tool shows the importance of commitments to early participation by the Asia-Pacific aviation powerhouse states of Singapore, Japan, Korea, and Australia; the Middle Eastern aviation dynamos of United Arab Emirates and Qatar; Latin American states like Mexico, Costa Rica, Guatemala; and leading African states such as Kenya.

It also shows that as exempted states increase in their importance as aviation powers, participation by at least some of them will be significant for boosting overall coverage toward the goal of carbon-neutral growth from 2020. Consequently, it will be important for today’s leading aviation countries to help build MBM capacity in the anticipated aviation leaders of tomorrow.

A number of countries that are exempt under the resolution's formulas, including leading voices from the front lines of climate impacts – Burkina Faso, Marshall Islands, Papua New Guinea, Costa Rica, Guatemala, and Kenya – have announced their intent to participate, and more are expected to join.

After nearly two decades of effort, ICAO is providing global leadership, with both developed and developing countries taking the lead. Hand in hand with this week’s announcement about ratification of the Paris Agreement, that’s good news indeed.

Posted in Aviation, News| Leave a comment

Lessons from Brazil on how to turn companies' zero-deforestation commitments into action

By Michelle Mendlewicz, EDF Global Climate 2016 Summer Fellow and Dana Miller, Policy Analyst

Cattle ranching in Brazil | Photo: Scott Bauer via Wikimedia Commons

Hundreds of major consumer goods companies that have driven the demand for soy, palm oil, timber & pulp, and beef – the big four commodities that contribute significantly to deforestation – have committed to eliminating deforestation from their supply chains. However, a vast majority haven’t yet acted on their zero-deforestation commitments or reported their progress.

According to a report by Forest Trends’ Supply Change, the majority of companies do not disclose their progress on zero deforestation commitments, with only 23% to 27% of commitments backed-up by data.

An analysis by The Sustainability Consortium found similar results, with 25% to 40% of companies reporting any information on deforestation for beef, soy, and palm oil.

Cutting and burning trees adds as much pollution to the atmosphere as all the cars and trucks in the world combined, which is why it’s important that more than 400 companies, including Walmart and Unilever, that have committed to achieving zero net deforestation by 2020 actually follow through on their pledges.

Two examples from Brazil, home to the largest remaining area of rainforest in the world, show that collaboration with governments and civil society can help companies turn their zero-deforestation commitments into action.

Mato Grosso’s ambitious strategy

Brazil successfully reduced Amazon deforestation by about 75% from 2005 to 2013 while maintaining robust growth in beef and soy production. Its success can be largely attributed to joint efforts between companies, government agencies, and environmental communities.

Brazil’s experience shows it takes more than commitments from companies to accomplish zero deforestation — businesses must focus on implementation and monitoring.

An example of this collaboration is Mato Grosso’s “Produce, Conserve, Include” (PCI) strategy, launched at the Paris climate conference (COP21) in December 2015. The State of Mato Grosso contributed to 50% of Brazil’s deforestation reduction between 2005 and 2013, while increasing beef and soy production. It is the largest agricultural commodity producer in the Amazon, producing 27% of the soy, 25% of the corn, and 19% of the beef in Brazil. The PCI plan aims to simultaneously reduce deforestation in the Amazon by 90% by 2030, increase agricultural production, and promote socioeconomic inclusion of smallholders and traditional populations.

Major soy and beef merchants Amaggi and JBS, non-governmental organizations such as EDF and partners in Brazil, and the Government of Mato Grosso worked together to develop the plan and continue to collaborate on its implementation.

As PCI’s coordinator stated, the ambitious strategy is only possible because it was “embraced” by society, and due to local partners and international supporters of the initiative.

Brazil’s businesses, governments and civil society successfully reduce deforestation from beef production

Another example of collaboration between businesses, governments and civil society has already shown success in reducing deforestation from commodity supply chains in Brazil. An agreement between Greenpeace and food processing companies in Brazil, Marfrig, JBS, and Minerva, requires farmers to provide information about their suppliers. This information is then cross-checked with government agencies, including the Brazilian Institute of Environment and Natural Resources (Ibama) and the Public Prosecutor’s Office (Ministério Público), to eliminate environmental or socially harmful practices. According to Marfrig, of the 8,303 properties monitored in the Amazon region, 6,471 are approved to supply cattle, while the remaining 1,679 properties are banned.

Meatpacking companies also signed a Term of Adjustment of Conduct (TAC) with the Public Prosecutor’s Office (MPF) to stop purchasing cattle originating from properties that cause illegal deforestation, are located on indigenous territories, are not registered with the government’s system, or are featured in the Ministry of Labor’s list of labor analogous to slavery.

A study published in 2015 found that both agreements – the one with Greenpeace and the TAC with government agencies – have incentivized behavior change by companies. Ranchers supplying to these companies complied with laws to register their properties with the government’s system two years before nearby ranchers. Only 2% of purchases by JBS were with registered properties before the agreement was signed, while 96% of transactions were with registered companies by 2013. Purchases by slaughterhouses from recently deforested properties fell from 36% in 2009 to 4% in 2013. According to Supply Change, JBS and Marfrig have self-reported 100% progress on commitments to zero-deforestation cattle, among other commitments.

Implementing, monitoring and collaborating on zero-deforestation commitments

Challenges remain, however, in eliminating deforestation from beef supply chains. Marfrig, JBS, and Minerva control around half of beef slaughter in the Amazon, while companies that control the other half have no monitoring systems or commitments in place. The limited scope of the agreements can cause issues including “laundering” – when ranchers raise cattle on noncompliant properties and move the animals to compliant ranchers before selling them to slaughterhouses – and “leakage,” when cattle produced on recently deforested land are sold to slaughterhouses that do not have monitoring systems in place.

Greater collaboration between a larger number of companies, producers and governments within a region can reduce the risk that deforestation will leak to other suppliers.

Brazil’s experience shows that it takes more than commitments from companies to accomplish zero deforestation. In order to achieve real progress, businesses must focus on implementation and monitoring. By collaborating and engaging with government agencies and environmental communities, companies can overcome the challenge of traceability and advance the fight against climate change.

For more information on efforts to reduce deforestation from cattle supply chains, visit Zerodeforestationcattle.org.

Posted in Brazil, Deforestation| Leave a comment

Mexico highlights climate leadership at home during Climate Summit of the Americas

Jalisco summit 700*325

Aristóteles Sandoval, Governor of the State of Jalisco, signs the 2016 Climate Action Statement during the Climate Summit of Americas. (Photo credit: Twitter @AristotelesSD)

Governors, ministers, business and community leaders from across the Americas, and the world, convened last week in Jalisco, Mexico for the 2nd Climate Summit of the Americas.

One year after the first star-studded summit held in Ontario, Canada, state and provincial governments reunited to showcase their achievements; highlight further challenges; and push further action and cooperation by states and provinces, as well as national governments.

So-called “subnational” governments have been far more visible on the international stage of global climate action in recent years, particularly in the run-up to the United Nations climate negotiations in Paris.

In 2015, California’s “Under 2 MOU” brought together a total of 135 states, provinces, and regions – representing one quarter of the world economy – to commit to reducing greenhouse gas emissions by at least 80 percent below 1990 levels by 2050.

While the summit’s purpose is to highlight subnationals, Mexican federal officials, from the newly-named UN climate chief, Patricia Espinosa, to the federal Secretary of Environment and high-ranking energy officials were there to demonstrate, once again, that Mexico takes its climate reputation very seriously.

Mexico has long been viewed as a climate leader on the international stage.

In 2010, as the host of the global climate negotiations in Cancun, Mexico’s diplomats were lauded for pushing climate talks to break the deadlock from the 2009 Copenhagen meeting. In 2012, Mexico passed landmark federal climate change legislation. And in the run-up to the Paris meeting, when building momentum through country pledges was critical to the negotiations’ success, Mexico was the first among developing economies (and only the fourth country in the world) to formally pledge to cut its emissions.

Mexico’s global climate commitments are intertwined with its national energy overhaul.

Currently the energy sector produces roughly 65% of its total greenhouse gas emissions. Building out these sectors anew after decades of federal monopoly is no small task, but one on which the country has forged ahead, also setting ambitious clean energy goals, such as a goal to source 50% of electricity from clean energy by 2025, reducing methane emissions from oil and gas by 40-45% by 2025, and aiming to set up a clean energy certificates market that will begin operating in 2018.

Bringing these pieces together with its UN targets requires a comprehensive plan that will ultimately ensure the emissions reductions achieved and drive low carbon economic growth.

Such a plan should enable Mexico to align its climate, energy, and economic development objectives – and though a suite of policies are necessary, the country has waded into discussions of a key policy tool that some of the subnational stars of the summit know quite a lot about – capping emissions and putting a price on carbon.

Mexico now has cooperation agreements with California and Quebec, which together operate the second largest emissions trading system in the world.

At the Summit, Mexican federal officials signed a joint agreement with Quebec and Ontario to work toward carbon pricing. The California agreement, signed in 2014, highlights carbon pricing and the implementation of market mechanisms for reducing emissions. The agreement with Quebec and Ontario, signed at the summit on Wednesday, envisions an eventual participation by Mexico in the Western Climate Initiative.

Mexico is aligning its opportunities.

Trade-relationships, and other ties in the Americas are distinct advantages for Mexico in a global carbon trading world. This enviable strategic advantage needs the sustained political will and resources to build a transparent and robust system, and the vision of its policymakers and entrepreneurs to make it work for Mexico.

 

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