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IETA Unveils Issues Agenda for COP18 in Doha

Doha, 26 November 2012

With the UNFCCC Conference of Parties (COP 18) commencing this week, IETA unveiled a list of high-priority issues that governments should address in Doha over the next two weeks. “Our Issues Agenda is aimed at a single objective for business,” said Dirk Forrister, CEO of IETA.  “We need a future international policy framework that uses carbon markets to stimulate businesses to invest in climate action at the scale of the need.  Right now, too much private capital is sidelined, waiting for clearer policy signals from governments.”

IETA’s COP 18 Issues Agenda includes the following elements:

Determine the future of the Kyoto Protocol (KP) and its mechanisms: A second commitment period of the KP must be agreed upon, including solutions to the issues of carryover, timing, offset use, and implementation. The carbon market places great importance on the expectation that governments will bring into force a 2nd commitment period of the KP at COP 18. IETA believes this second commitment period should last for eight years, ending in 2020, when a new global agreement is set to begin.

Develop a clear, robust framework for a new market mechanism (NMM): Negotiators need to make significant progress on the modalities and procedures for a NMM, which is set to be finalized under a New Agreement in 2015.  IETA hopes that during COP 18, the Parties will establish a work programme on a NMM that will enable a successful launch of new carbon markets as soon as possible.  This could spark a new wave of innovative private investment in clean energy and climate mitigation.  More details on IETA’s recommended NMM approach are available here.

Ensure continuity for carbon markets worldwide: The framework and NMM should provide continuity (or at least a smooth transition) from the present UNFCCC structures, such as the Kyoto Protocol and Clean Development Mechanism (CDM), to the new markets of the future.  This framework should enable the continued growth – and linkage—of national, sub-national and emerging carbon markets to encourage greater investment in climate action.

Widen access to the Kyoto market mechanisms (CDM, JI): Parties should ensure that from 1 January 2013, broader potential demand sources are opened beyond the limited capacity allowed under the Marrakech Accords. Any country or sub-national jurisdiction interested in allowing use of CERs or ERUs should be encouraged to access those markets.  This will help relieve the current shortage in demand for CDM and JI, although more is needed in terms of raising ambition by Parties to solve the long-term imbalance of supply and demand in the current Kyoto-driven carbon market.

Establish a CDM reserve facility: Building upon the recommendation from the High Level Panel on the CDM Policy Dialogue, a reserve facility should be established at COP18 that would encourage investors to maintain engagement and confidence in the CDM.  Such a facility would bring new public financing into the CDM market to stabilize investment and encourage further project development to occur during the period prior to launch of the NMM.  More on the CDM reserve design here.

“In recent weeks, many international businesses emphasized their strong belief that carbon pricing signals, like produced daily by carbon markets, are critical for business to do its part in meeting climate goals,” said Dirk Forrister, CEO of IETA. “IETA’s issues agenda for Doha is aimed squarely at furthering that objective.”

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For a more detailed look at IETA’s COP18 Priorities, see the report here