Bonn, 5 June 2009 

IETA urges UNFCCC Parties to affirm their commitment to maintain, reform and expand the existing market-based, flexible mechanisms. 

Today, as the Parties continue their in-depth discussion of draft texts under the UNFCCC’s AWG-KP and AWG-LCA, the International Emissions Trading Association (IETA) announced the release of two new position papers, outlining IETA’s views on the Clean Development Mechanism and Joint Implication under a post-2012 international climate change agreement.

 The Clean Development Mechanism ( CDM) has demonstrated that market-based mechanisms spark new, keen interest in clean development activities in countries whose emissions must be addressed if the international community is to meet its climate change objectives. The invaluable momentum that the CDM has created must be preserved and built upon. The Parties should draw upon lessons learned so far in order to improve the mechanism, and possibly design new flexible mechanisms, with the intention of ensuring that the carbon market impacts a much greater swath of countries and emitting activities in the future. In this position paper, IETA applauds the ambitious proposals for the reform and expansion of the CDM and/or the creation of new flexible mechanisms that have been put forward by the Parties. There is a need, however, for Parties and interested stakeholders to look carefully at the practicalities of the relationships that would be at play within them and at the governance, data, and MRV requirements they would entail. IETA points out some gaps that need to be addressed in some proposals, explains why others are simply unacceptable, and, in the case of land-use activities, argues that a full overhaul of approach would be best.
 
IETA also strongly believes that Joint Implementation (JI) must be maintained in the post-2012 agreement. JI plays a valuable role, which will prove increasingly useful as more countries move towards accepting emissions caps. JI’s role includes supporting the development, deployment, and diffusion of low-carbon technology, within capped countries or sectors that are not covered by domestic cap-and-trade schemes. It also provides flexibility for governments to meet their Kyoto commitments and fosters the use of carbon markets in areas of the economy that are considered too small or too difficult to regulate. Equally as important, JI provides an avenue through which the private sector – the engines of developed and developing country economies alike – is able to become directly and proactively involved in efforts to reduce emissions in non-regulated areas. Their involvement brings a level of efficiency and ingenuity to the task which is rarely matched by governments. IETA recognizes that JI has faced significant challenges in the past, and therefore argues that JI should not only be maintained post-2012, it should also be reformed and further improved in order to make way for an increased flow of projects.

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