Taking stock and looking forward: State of markets and outlook for linking OECD GLOBAL CARBON MARKETS WORKSHOP 19-20 April 2010, Paris Dr. Martin Bergfelder, ICAP Project Manager 21 April 2010 1
What is ICAP? ICAP is a partnership of countries and regions that are actively pursuing the development of carbon markets through the implementation of mandatory cap and trade systems with absolute caps. ICAP was established in Lisbon, Portugal on 29 October 2007 by Heads of national and regional Governments. 21 April 2010 2
ICAP s mission ICAP s mission is to contribute to the establishment of a well-functioning global carbon market by: Sharing best practice and learning from each others experiences; Building and strengthening partnerships amongst Governments; Ensuring that design compatibility issues are recognized at an early stage; Making possible future linking of trading programs; Highlighting the key role of cap and trade as an effective climate policy response. 21 April 2010 3
ICAP: 29 members and 2 observers European Union Members: Denmark, European Commission, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, Spain, United Kingdom Regional Greenhouse Gas Initiative (RGGI) Members: Maine, Maryland, Massachusetts, New Jersey, New York Western Climate Initiative (WCI) Members: Arizona, British Columbia, California, Manitoba, New Mexico, Ontario, Oregon, Quebec, Washington Other Members: Australia, New Zealand, Norway, Tokyo Metropolitan Government Observers: Japan, Ukraine 21 April 2010 4
Benefits of participating in ICAP ICAP is the only multilateral forum to discuss critical issues regarding compatibility and linking of emissions trading systems amongst governments; ICAP provides assistance to all governments who are interested in establishing cap and trade systems; ICAP allows members to share best practice and to work jointly on the development of common standards 21 April 2010 5
ICAP activities Public conferences, internal workshops, expert networks and studies on critical design and linking issues (e.g. monitoring and compliance, competitiveness, allocation, auctioning, offsets/credits) Outreach and capacity building activities, especially towards emerging economies, e.g. summer schools on emissions trading, conference on monitoring, reporting and verification in China 21 April 2010 6
State of Markets Many ETS under consideration / development but besides EU ETS only few smaller systems operational (RGGI, NZL, CHE, TMG); all eyes on US ETS design reflects domestic circumstances / policy priorities but a lot of technical (e.g. MRVCE) and political (cap setting, allocation) challenges are similar around the world Need for technical cooperation / information sharing now to avoid lock-in of incompatible and fragmented markets to facilitate future linking 21 April 2010 7
Outlook for Linking EU: OECD wide carbon market by 2015, ADC by 2020 Even though only few design elements need to be compatible from a technical perspective, e.g. a tonne must be a tonne, additional elements can be perceived barriers for linking from a political perspective, e.g. level of cap, allocation methods, handling of competitiveness issues Mutual recognition of allowances easiest way to link but need for pilot phases, trust building and compatibility beforehand and some form of coordination among linking partners afterwards, especially with more than two partners Coordinated approach of ETS towards offsets/credits important even before direct linking takes place 21 April 2010 8
Thank you very much for your attention! For more information on ICAP, please visit out website at www.icapcarbonaction.com Dr. Martin Bergfelder ICAP Project Manager Contact: martin.bergfelder@icapcarbonaction.com 21 April 2010 9
Backup Slides 21 April 2010 10
Who can join ICAP? Any public authorities and governments that have established or are actively pursuing carbon markets through mandatory cap and trade systems with absolute caps may apply to join ICAP. ICAP also welcomes observers from other states around the world which are showing interest in cap and trade systems for tackling greenhouse gas emissions. ICAP reserves the right to decide on a case by case basis. There is no entry or member fee. ICAP is currently financed by voluntary contributions. 21 April 2010 11