Part II:  Amazon Hydroelectrics, the UN Climate Treaty and the International Civil Aviation Organization (ICAO) – will greed and corruption derail the international climate negotiations?

Santo Antônio Dam under construction in the state of Rondônia, Brazil, 2009 | Photo: Wiki Commons

Brazil’s climate change negotiators are trying to throw the best hope for at-scale finance for stopping deforestation under the bus to ensure a big payday for bogus carbon credits from Amazon dams and other Clean Development Mechanism (CDM) projects  — benefitting the scandal-plagued national power company Eletrobrás at the expense of the Amazon. (See EDF and Brazilian partners report.) There are far better ways to combat climate change.

A Better Mousetrap

One of the best examples of how to do it, ironically, is what Brazil and Amazon states have actually done in reducing Amazon deforestation since 2004. Government ramped up enforcement, recognized indigenous territories and protected forests for other communities, and consumer goods companies like Walmart told their suppliers they needed zero-deforestation commodities. The result was a 70% reduction in deforestation by 2016 that kept 3.65 billion tons CO₂ out of the atmosphere – on the order of what the European Union achieved, only in one developing country. But positive incentives for forest protection called for repeatedly in legislation never materialized, so pushback from the big ranchers’ and farmers’ caucus in the Congress has put all of these gains at serious risk, and deforestation started to tick up again.

There is a lot at stake here, for the atmosphere as well as the forest. New research shows that much more cost effective climate change mitigation than anyone suspected – 11 billion tons of CO2 per year till 2030 — can come from “natural climate solutions”, mostly from stopping tropical deforestation and forest degradation. This is almost 40% of the mitigation needed by 2030 to have a 66% or better chance of keeping warming below 2°C, according to the authors.

Bringing jurisdictional reductions in deforestation and forest degradation into carbon markets could generate the funds that Brazil needs to end Amazon deforestation and effect the transformation to low-carbon sustainable agriculture. 

Reducing and ultimately stopping large-scale deforestation is fully feasible. We know this because Brazil and the Amazon states have done it. They have taken reductions targets below historical levels, and made world-leading reductions while increasing cattle and soy production – historically the major drivers of deforestation (Figure 1).  Making emissions reductions at the scale of a state or region or country is much more like the EU or California cap-and-trade systems than an offset project. It’s actually systemic climate change mitigation. Bringing jurisdictional reductions in deforestation and forest degradation into carbon markets could generate the funds that Brazil needs to end Amazon deforestation and effect the transformation to low-carbon sustainable agriculture. Transparent accounting, rigorous double-entry bookkeeping to avoid double counting, and fair benefit sharing will be critical to making it work, but are also completely feasible. Doing sustained, large-scale deforestation reduction would also allow Brazil to call for more ambitious goals for other big emitter countries, and create cost-effective opportunities to make that happen. A revamped CDM could then channel funds to the least developed countries that most need them.

Figure 1. Brazil annual Amazon deforestation, soy and cattle production 1996 – 2016 (source: Stabile, M. 2017. Amazon Environmental Research Institute (IPAM); Brazil National Space Research Institute – INPE/PRODES; Brazilian Geographical and Statistical Institute – IBGE PPM and PAM, Amazon Fund.

Operation Car Wash and Chico Mendes

So why wouldn’t any country with a lot of forest to protect, and potentially a lot to gain from it, want to continue a winning streak? Well, as Brazil’s experience shows, there’s a lot less opportunity for corruption in reducing deforestation than there is in, say, building dams. Carbon credit for Amazon dams fits right in with the massive corruption, “Operation Car Wash”, super-sketchy side of Brazil. World-leading emissions reductions from controlling Amazon deforestation are an example what we could call the Chico Mendes side of the country. Brazil has always had these two sides. Corruption is endemic but so is innovative public policy. Brazil’s world-class AIDs program, which has kept infection rates far below other early hotspots; the sugar cane ethanol program that gave Brazil the biggest flex-fuel automotive fleet in the world; internationally recognized high-tech remote sensing monitoring of deforestation; and former President Lula’s poverty reduction programs are all examples.

Brazil has an exceptional opportunity to become an economic/environmental innovator and global leader of truly transformative impact – a 21st century environmental/economic superpower — if it succeeds in creating real economic value for living forests. What Acre Governor Tião Viana calls “the low-carbon, high social equity economy” shows the way to zero deforestation, sustainable commodity and family farmer agriculture, and sustainable, prosperous forest communities.

Which side of Brazil’s Jekyll-Hyde political character will win? When Chico Mendes was alive, most people would have probably picked the Car Wash side. Along with ever-increasing numbers of Brazilians, I’d pick Chico’s side.

Both sides are on display at the international climate negotiations, where Brazilian negotiators are pushing hard for deeply flawed CDM projects including Eletrobrás’s Amazon dam boondoggles. Which side wins won’t only affect Brazilians. It will make a real difference to the atmosphere, and to us.

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Amazon Hydroelectrics, the UN Climate Treaty and the International Civil Aviation Organization (ICAO) – will greed and corruption derail the international climate negotiations?

Belo Monte Dam under construction on the Xingu River in the state of Pará, Brazil in 2013 | Photo credit: Letícia Leite-ISA

Brazil’s climate policy theater: Brazil climate negotiators fight for carbon credit payout for scandal-plagued national power company Eletrobrás and Amazon mega-hydroelectrics, block carbon finance for ending Amazon deforestation.     

Behind the headline-grabbing news about Brazilian political corruption, Brazilian climate change negotiators are busy pushing proposals that could seriously damage important new climate change agreements – and shut the door on much-needed finance for stopping deforestation.

New market mechanisms in the UN Paris Agreement and in the International Civil Aviation Organization’s Carbon Offsetting and Reduction Scheme for Civil Aviation (CORSIA) could provide money Brazil needs to protect its rainforest, including protecting heavily threatened indigenous territories twice the size of California. The new mechanisms could also help other tropical countries stop deforestation. That would be great news for the global atmosphere and for the people who live in the forests.

But Brazil’s negotiators are dead set against it. Instead, they’re fighting hard to preserve the Clean Development Mechanism (CDM), a relic of the Kyoto Protocol. Global climate change champions California and the European Union have largely or entirely shut the CDM out of their markets because they’ve concluded, rightfully, that its claims to environmental integrity have lost credibility.

Brazilian negotiators say the CDM is the gold standard for environmental quality, and reducing deforestation is too risky for carbon credit. A new report by EDF and Brazilian partners – along with a plethora of other analyses — reaches a different conclusion.

Bogus Carbon Credit for Amazon dams

The CDM was created in 1997 by the Kyoto Protocol to allow emissions reductions projects in developing countries to generate tradeable carbon credits, called “Certified Emissions Reductions” (CERs), which, the Protocol specifies, could be used by industrialized countries to help meet their emissions targetsduring the years 2008-2012. But since new targets for these countries didn’t take effect under the Kyoto Protocol, CER prices plummeted for lack of buyers. Brazil has a big portfolio of projects that are generating currently zero-value CERs that could turn into real money if the new market mechanisms of the Paris Agreement and CORSIA accept CDM credits. No wonder they like the CDM.

Three Amazon dams – Santo Antônio, Jirau and Teles Pires – are Brazil’s biggest CDM projects, and say a lot about what’s wrong with the mechanism.

Starting in 2012 affiliates of Brazil’s state power company, Eletrobrás, registered the mega-hydroelectric dams in the Amazon as CDM projects. They said that the dams would reduce greenhouse gas emissions that would have otherwise happened, and that since they were big, risky projects, they wouldn’t be financially viable unless they got the carbon credit. The CDM approved the dams, issued millions of CERs for them, and stands ready to issue hundreds of millions more.

Carbon Credit for Corruption?

But, a little later, these dams were implicated in the “Operation Car Wash” investigation, probably the largest corruption investigation in the world. The investigation first uncovered bid rigging, bribery and kickbacks worth billions of dollars in state oil company Petrobrás. It has now convicted scores of politicians and top executives at Brazil’s biggest companies. Eletrobrás executives engaged in exactly the same schemes in the three Amazon dams and other projects, according to whistleblowers. One former officer of an Eletrobrás subsidiary has been sentenced to more than forty years in prison for bribery, money laundering, obstruction of justice, tax evasion, and participation in a criminal organization, and similar charges are pending against others.

Eletrobrás’s stock price crashed as a result. US investors brought suit against the company, now pending in federal court in New York. They allege that Eletrobrás publicly claimed it was keeping clean books and building legitimate energy projects, while in fact concealing massive corruption and kickbacks. The dams ran up billions in cost overruns (allegedly to pay the bribes and kickbacks) at the investors’ expense.

Meanwhile, while it told the CDM that carbon finance was crucial for the dams to go forward, the company went ahead and built the dams.

Certified Emission Reductions market price crashed after the end of 2012 | Source: eex.com

The dams are operating today with basically zero carbon finance, because the CERs became virtually worthless after the end-of-2012 the price crash. If the dams in fact caused any emissions reductions, they did it without money from the CERs – so they  would have happened anyway. But, in fact the dams never caused any emissions reductions – the decision to build them was political, not economic. Opportunities for bribes and kickbacks were by all indications a key factor. It’s not surprising Eletrobrás and affiliates never told its investors that it needed carbon credit for the dams to pay off – the credits were just icing on the cake.

In 2016, KLP, one of the world’s largest investment funds, managing over $36 billion in pension funds in Norway, decided to exclude investments in Eletrobrás, citing “unacceptable risk of gross corruption. According to the company's financial reports to US authorities, Eletrobrás contracts with suppliers have been overbilled during a period of almost seven years, with the excess funds paid out to Brazilian politicians, political parties and company executives.”

That the CDM approved the dam projects at all is a serious indictment of its rules. Lots of other analyses have concluded that this mechanism needs serious overhaul or phase-out. See my next post for a better approach to international collaboration on climate change mitigation.

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California to showcase subnational climate action at COP 23

This week, signatories to the United Nations’ Framework Convention on Climate Change (COP 23) meet in Bonn, Germany to discuss implementation of the Paris Agreement. While much of the domestic news will focus on the Trump Administration’s “break-up” with the Paris Agreement, there will also be significant focus at the COP on actions of sub-nationals: cities, states, and regions around the world who are stepping up to address climate change.

California is a leader in sub-national climate action, and Governor Jerry Brown has been designated Special Advisor for States and Regions to COP 23. He will be welcoming new partners in the Under2MOU: a coalition of 188 jurisdictions around the world acting to keep global warming below 2 degrees Celsius. Governor Brown was also instrumental in creating the U.S. Climate Alliance, a bi-partisan group of states committed to reducing greenhouse gas emissions consistent with the goals of the Paris Agreement, even if Washington, DC tries to walk away.

At the U.S. Climate Action Pavilion at COP 23, Governor Brown, together with Michael Bloomberg, will release a new report on November 11th highlighting the progress of U.S. states, cities, and businesses in addressing climate change. He will also be participating in other events with the “We Are Still In” effort to promote American climate action and leadership. These are important examples of sub-national action that increases the ambition of other regions in reducing greenhouse gas emissions.

To illustrate California’s state-level achievements, Environmental Defense Fund has two new publications for COP 23. “California’s Cap-and-Trade Program Step by Step” explains how California set up its cornerstone climate policy, cap and trade, in an easy-to-follow 10-step formula. Other sub-nationals as well as interested countries will be able to learn from the state’s experience in developing their own emissions trading system.

Cutting Carbon and Growing the Economy” highlights the progress California has made since cap and trade began in reducing emissions, strengthening the economy, and ensuring all California residents benefit.

Reducing emissions and growing the economy go hand-in-hand. The state is on track to beat the target of reducing greenhouse gas emissions to 1990 levels by 2020 and the state’s Gross State Product has increased more than 16% since 2006.

At the same time, California’s job growth has outpaced the nation, and the growth in “clean jobs” has dwarfed overall job growth. Revenues from cap and trade mean over $5 billion is being invested in communities across the state. This includes funds directed toward air quality and other environmental justice issues in the most polluted neighborhoods.

Together, these publications demonstrate the progress California has made in addressing climate change. In partnership with the California State Delegation to COP 23, EDF will illustrate to the world that the Trump Administration doesn’t have the last word on American climate action. States like California are leading the way and are encouraging other sub-nationals to join them in ambitious climate action.

For further questions please reach out to any of EDF California’s delegation heading to Bonn this week: Quentin Foster, Erica Morehouse, or Katelyn Roedner Sutter.

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“Fiji-on-the-Rhine”: Four things to expect from the COP 23 UN climate talks

By Alex Hanafi, Senior Manager, Multilateral Climate Strategy and Senior Attorney, and Soren Dudley, Program Assistant, Global Climate

A confluence of factors sets the stage for what to expect from this year's climate meetings, the first since the U.S. announced its plans to withdraw from the Paris Agreement. Above: The Bula Zone at the UNFCCC headquarters in Bonn. Photo: UNFCCC/ Flickr.

The first UN climate talks since the United States announced its plans to withdraw from the Paris Agreement start this week in Bonn, Germany. Chaired by the island nation of Fiji, the meetings are the second-to-last Conference of the Parties (COP) before the Paris Agreement’s implementation “rulebook” is scheduled to be finalized in Poland next year.

This confluence of factors – Fiji’s presidency of the COP, President Trump’s announcement (and the ensuing groundswell of domestic and global support for the Paris Agreement), and the need to advance progress on the technical details of the Paris Agreement’s infrastructure – sets the stage for what to expect from this year’s climate meetings.

1. Islands’ COP, islands’ issues

As the President of the 23rd meeting of the COP, Fiji will aim to highlight both the needs of vulnerable parties as well as island nations’ climate action leadership. This year’s COP presents an opportunity to spotlight necessary adaptation to a changing climate, as well as the loss and damage experienced by islands due to the impacts of climate change. These concerns are especially important to low-lying island nations because their very existence is threatened by the rising sea levels triggered by climate change.

Many island nations, Fiji among them, have made ambitious renewable energy pledges central to their participation in the Paris Agreement. Leadership by small island developing states will shine an even brighter spotlight on the Trump Administration’s retreat from climate action.

2. Trump’s intention to withdraw the U.S. from the Paris Agreement isolates the U.S…. and triggers a groundswell of support for the Paris Agreement

President Trump’s June 1 announcement that the US intends to pull out of the Paris Agreement left the U.S. isolated. This isolation became even starker with the recent news that Nicaragua will join the Paris Agreement, leaving the U.S. and Syria the only two nations in the world refusing to join.

Although the Trump Administration has been working to roll back existing federal climate policies and will continue to do so, its initial efforts have encountered delays and legal setbacks.  The Administration has yet to successfully suspend, weaken, or repeal a major climate protection

While the U.S. government attempts to backtrack on common-sense efforts to reduce U.S. climate pollution, nations around the world are already taking concrete steps to meet their Paris pledges. Perhaps most notably, China plans to roll out a national carbon market in the coming weeks, demonstrating China’s continuing commitment to climate action. China is now increasingly seen as filling the leadership void left by the U.S. With news of recent trilateral climate meetings between China, the EU, and Canada, COP 23 offers the first chance for a this potentially powerful alliance to prove itself as a force for accelerating the transition to the clean-energy, low-carbon economies of the future.

3. U.S. subnational actors show commitment on the global stage

In direct contrast to Trump’s announced pull-out, U.S. subnational actors are eager to communicate to the global community that they are still committed to moving ahead despite federal backsliding. American businesses and state-level officials plan to use COP 23 to showcase concrete examples of their continued climate leadership. Notably, several U.S. governors, including those from California, Virginia, Washington, and New York, will attend to demonstrate the depth and breadth of U.S. state-level action.

4. Negotiations and progress on the Paris Agreement Rulebook

This COP will be important for keeping the ship sailing in the right direction on implementing the Paris Agreement. Countries decided last year that they will finalize the nuts and bolts of the Paris Agreement’s implementing infrastructure (its “rulebook”) by COP 24 in Poland in December 2018. Parties have a long list of tasks to complete, and negotiations on key tools Parties can use to cooperate in driving down climate pollution, like carbon markets, are moving slowly.

While agreement among all Parties on these carbon market standards is not necessary before “bottom up” cooperation on carbon markets may begin, up-front clarity on key issues (like how Parties can avoid “double counting” of emissions reductions) can reduce uncertainty and help catalyze additional investment in high-integrity emissions reductions around the globe.

This will be an important COP to watch for signs of how much work will remain for next year, and how likely it is that countries will stick to their tight timeline for delivering an effective roadmap to guide Parties in achieving the goals of the Paris Agreement.

This post was updated Nov. 5 with more detail in #2.

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How will forests be on the “menu” at UN Bonn climate talks?

The 2017 UN climate talks will take place from November 6 to 17 in Bonn, Germany | Photo: Pixabay

This year’s global climate conference (COP23) is upon us and will be an interesting mix of Fijian diplomacy and Kölsch beer. As I do every year, in this year’s pre-COP blog I lay out what will be happening during the COP related to REDD+ in the negotiations and what I hope to hear about in the hallways and many side events.

The COP23 conference is expected to be a working COP as parties make the necessary progress in rule writing to meet the 2018 deadline of a final rulebook. There will also be a lot of news about non-state actors – the private sector, states like California, and other non-federal entities – being discussed as a reaction to Trump’s reckless decision to leave the Paris Agreement.

For a good overview of how we are doing in with respect to the climate change and forest sector, I suggest reading this year’s New York Declaration on Forests report. It includes a good review on progress in the private sector (or lack thereof) and funding for forest conservation – and activities causing deforestation.

But, back to the UNFCCC …

REDD+ in the negotiation agenda

After a year’s hiatus from the COP agenda, REDD+ will make an expected brief appearance in the Subsidiary Body for Implementation (SBI) agenda the first week during discussions about the “coordination of REDD+ finance”. This is a leftover item from the Warsaw REDD+ Framework decision, when parties agreed to not create a “REDD+ Committee” to coordinate REDD+ finance as some parties wished, but rather annual informal and voluntary meetings during the mid-year subsidiary body negotiations (SBs) for 4 years to share experiences about REDD+ financing. Many of the attendees from parties to observers would agree that these informal meetings were of little value.

In this COP, negotiators are scheduled to reevaluate whether to continue the SBs or create the REDD+ Committee. I doubt there will be interest in either of them. However, the agenda item could be used as an opening to push a party’s or coalition’s not completely related proposal for financing REDD+, such as a centralized registry for REDD+ transactions.

REDD+ related negotiation items: transparency, NDCs and market

Much of the Warsaw Framework for REDD+ addressed transparency. After following initial discussions in the broader transparency agenda item that is part of the APA, many parties and negotiators are worried that those negotiations might dilute what was achieved for REDD+. Transparency in REDD+ thus far includes the Lima REDD+ Information Hub where countries submit their National REDD+ Strategies, Reference Emission Level (REL) submissions, Safeguard Information System summaries, and results. The process established for reviewing the RELs, which includes a technical assessment and publication of that assessment, is very important. The fact that the new US negotiator for transparency is the former REDD+ negotiator for the US, however, could be very helpful to ensure no dilution occurs.

Many of the party submissions on producing Nationally Determined Contributions (NDCs) mentioned the land use sector explicitly, and REDD+ implicitly. The more detail related to the inclusion of the land use sector in NDCs the better, but it might be hard for negotiators to come to agreement on the extent or nature of those details.

The market negotiations under the SBSTA will continue; those on Article 6.2 of the Paris Agreement and Internationally Transferred Mitigation Outcomes (ITMOs) are particularly relevant. More explicit guidance on no double counting/claiming is needed to ensure environmental integrity for REDD+ and ITMOs that might come from any other sector or project. REDD+ in itself, however, does not need explicit language in Article 6.2.

Other noticeable REDD+ financing developments

The Green Climate Fund recently approved guidance and $500 million for REDD+ results based payments, which I expect to be discussed substantially during the COP. Although the amount is not sufficient, the methodologies the GCF agreed upon will be relevant to other REDD+ finance decisions in the future.

Private finance for advancing deforestation free commodities is another hot topic and I expect to learn more concrete details about the andgreen.fund that was announced earlier in the year. Specifically, I’d like more clarity on how they will be defining jurisdictions advancing in becoming deforestation free, which is a requirement of the fund to determine what private sector actors will be funded.

This year’s report on New York Declaration on Forests provides extensive insight on the current state of forest finance. The report reviews the billions of pledges, commitments, and amounts spent to advance REDD+. More interesting is the amount of “grey” funding available from public subsidies and private sector investment for the land sector. The amount of “grey” funding greatly exceeds direct REDD+ funding and needs to be changed or channeled to activities that support forest conservation.

Indigenous Peoples in the negotiations

Indigenous territories have rates of deforestation eight times less than external forests.

Indigenous Peoples are hoping for a decision on the Indigenous Peoples’ traditional knowledge platform that will support the inclusion of them and their solutions to mitigating and adapting to climate change. A number of parties from Ecuador to Canada are prioritizing and supporting this platform. While interested in all agenda items, Indigenous Peoples will also probably focus on the NDC negotiation to ensure that the need to include them in the development and revision of the NDCs is explicitly mentioned. Many party submissions on the topic included the need for NDCs to discuss how they consulted Indigenous Peoples and other groups in their development.

Indigenous leaders from the Amazon basin will be promoting a new scientific analysis which found, that from a regional level, indigenous territories have rates of deforestation eight times less than external forests. Hopefully, parties will take note of this and include more overt references to the importance of supporting and including Indigenous Peoples in decisions.

Reporting on progress by countries implementing REDD+

While not formally on the negotiation agenda, I expect a number of countries at their pavilions or in other events to present the final versions of their National REDD+ Strategies. Parties have already submitted 25 Reference Emission Levels (REL) and I expect a few more to arrive during the COP or before the end of the year. Discussions around best practices in REL construction and lessons learned will be a popular topic – amongst the technical people at least.

The richest presentations and discussions related to REDD+ will likely happen on November 12th during a set of panels on forests as part of the Action Agenda, now called the Marrakech Partnership for Climate Action. During this event, I hope to hear more about how the private sector is implementing the 700+ deforestation-free related commitments they’ve taken, but largely have yet to implement.

A “working” COP

Many expect no big decisions on forests – like a Warsaw Framework for REDD+ – to be agreed upon at this COP. However, I would like to see a decision on the platform for Indigenous Peoples’ traditional knowledge, which would be helpful for REDD+.

The parties should make progress on advancing the markets, NDC, and transparency negotiations that are indirectly related, but no less important, to REDD+. Decisions on those topics at the COP next year, as mandated in the Paris Agreement, are essential for continuing the implementation of REDD+ and unlocking necessary finance.

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Western Climate Initiative expands: Ontario to join California-Québec carbon market

Quebec Premier Philippe Couillard, second from left, pictured in 2015 joining the Under2 Coalition, a first-of-its-kind agreement among states and provinces around the world to limit the increase in global average temperature to below 2 degrees Celsius – the warming threshold at which scientists say there will likely be catastrophic climate disruptions. Photo: Jenna Muirhead via Office of Governor Edmund G. Brown Jr.

en español  |  This morning California, Québec, and Ontario signed a linking agreement that officially welcomes Ontario into the Western Climate Initiative (WCI) cap-and-trade market.

The announcement came after an inspiring Climate Week in New York where states, businesses, and individuals showed that despite Washington D.C going backwards, the U.S. will continue to make progress on our commitment to help avert catastrophic climate change. This linkage announcement provides a concrete example of how motivated governments can work together and accomplish more through partnership than they could apart.

Why linkage matters

The agreement will allow participants from all three locations to use carbon “allowances” issued by any of the three governments interchangeably and to hold joint carbon auctions.

This full linkage can have a number of benefits.

  1. The concrete benefits that economists often point to include “liquidity” from a larger market, meaning that if participants need to purchase or want to sell an allowance, it is easier to find a trading partner.
  2. There are also significant administrative benefits to joining an existing market and to working together, including sharing the administration of auctions.
  3. A larger market can also provide access to lower cost reduction opportunities, which lower the overall cost of compliance for the whole market, allowing governments to maintain and strengthen the ambition of their commitments.
  4. The less tangible benefits of having partners that are equally committed to addressing the challenge of climate change can’t be ignored. California may not have a willing climate partner in Washington D.C. but the state is finding the partners it needs in Québec and Ontario and together they can prove that cap and trade provides an effective model for international collaboration and a cost-effective way to keep harmful climate pollution at acceptable levels.

Choosing the right partners

To ensure any carbon market linkage is strong, partners must be carefully selected by evaluating the compatibility of each program. California, Québec, and Ontario started this process early by working together (along with several other states and provinces) in 2009 to develop best practices for establishing cap-and-trade programs.

This carbon club model is one that EDF has identified as a powerful potential driver of climate action

When full linkage is being considered, one of the most important threshold questions is how ambitious each potential partner’s cap is; the cap is the key feature of each program that ensures the environmental goals of each government are met, and a weak cap would impact all participants. Ontario, California and Québec have all cemented into law ambitious and world-leading climate targets for 2020 and 2030. Beyond that, there are some design elements which should be aligned among all programs and others that can differ and outlining these parameters is a negotiation among participants.

Ontario is demonstrating that the WCI carbon market model is an accessible one for ambitious governments to consider joining. This carbon club model is one that EDF has identified as a powerful potential driver of climate action. Hopefully other states and provinces will take Ontario’s lead. Here are some locations to watch:

  • Several Canadian provinces are actively developing cap-and-trade programs that could link with WCI one day.
  • State legislators in Oregon may have a chance to vote during their short session in early 2018 on a “cap and invest” program that is being designed with WCI linkage in mind.
  • Momentum on carbon markets is also growing elsewhere in the Americas. Mexico is in the process of developing its own national emission trading system and has expressed an interest in linking such a system with the California-Québec-Ontario market.
  • And just this past June, in the Cali Declaration, the heads of state of the Pacific Alliance countries of Mexico, Colombia, Chile, and Peru embraced the vision of a voluntary regional carbon market in agreeing to strengthen monitoring, reporting, and verification frameworks for greenhouse gas emissions.

California, Québec and Ontario are creating a model for action that is ripe for others to adopt as is or adapt as needed. This type of bottom-up partnership that matures into real and ambitious collective action is the future of international climate policy.

 

Note: More details on the linkage concepts discussed in this blog can be found in chapter 9 of the EDF co-authored report Emissions Trading in Practice: A Handbook on Design and Implementation.

Posted in California, Canada, Emissions trading & markets, News| Leave a comment
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