Without robust carbon markets, there’s arguably no net zero. A carbon market allows investors and corporations to trade both carbon credits and carbon offsets simultaneously. This helps mitigate the climate crisis and meet net zero targets, while also creating new market opportunities.
The Kyoto Protocol of 1997 and Paris Agreement of 2015 are international accords that lay out international greenhouse gas emissions goals. With the latter ratified by all but six countries, the agreement has given rise to national emissions targets and the regulations to back them. With these new regulations in force, the pressure on businesses to find ways to reduce their carbon footprint is growing. Most of today’s interim solutions involve the use of the carbon markets.
The International Emissions Trading Association (IETA) was the first international, multi-sectoral business group devoted to pricing and trading greenhouse gas reductions. From the start, it had a strong focus on the Kyoto mechanisms and helped members using, hosting and investing in Clean Development Mechanism (CDM) and Joint Implementation (JI) projects by disseminating policy and market information and promoting development and reform.
As markets developed, IETA expanded its work to cover the EU ETS, efforts in North America, China, Korea, New Zealand and emerging markets across Latin America. In more recent years, IETA has also developed work streams on digitization, aviation, natural climate solutions, voluntary carbon markets, and carbon removals.
IETA is committed to smart, well-designed and effective carbon markets to help achieve the goals of the Paris Agreement and reach net-zero emissions by 2050.
Given the public’s growing interest in carbon markets, IETA is amplifying efforts to expand its outreach. The association, which has a long history of collaboration with leading industry representatives (such as the Environmental Defence Fund), is proposing to develop a “one stop shop” to explain compliance and voluntary carbon markets and their need if net zero targets are to be met. This new initiative, which comes at at time when IETA is celebrating its 25th anniversary, shall be named the Carbon Markets Information Hub.
“We’re looking to set up the Carbon Markets Information Hub that will include factual and balanced information about carbon markets, both compliance and voluntary, and proactive communications and education about carbon markets, including an advocacy element,” explains Mark Downes, communications director at IETA.
According to Downes, the vision at IETA has always been that the voluntary carbon market (VCM) is a valuable prelude to meaningful compliance markets, but it is not really a substitute. That’s why IETA focuses primarily on the expansion and growth of compliance markets, because we know that the scale of action and investment required for meeting net zero goals requires stable legal frameworks.
The plan is for IETA to work with a number of organizations that share their view that well-functioning carbon markets are vital in meeting climate goals by 2030, but they have to adhere to the highest levels of standards, integrity and transparency.
“We want to amplify our various communications and measure how much we’re moving the needle. We’re eager to address the negativity around the carbon markets. It’s gone too far,” said Downes.
Canada is one of the many countries which have made net-zero commitments. Image Credit: Royal Bank of Canada.
Structure of the hub
IETA’s collaboration with partners has identified initial key themes and work strands with the objective of providing and promoting robust and factual information about compliance and voluntary carbon markets to show their importance in delivering net zero targets. The Hub will have a website to provide evidence-based information about carbon markets to explain their critical contribution to stabilising the global climate, protecting biodiversity and enhancing social benefits. The information will be communicated in a balanced and transparent way.
IETA will have three main functions:
- Establish carbon markets as essential to move investment towards low carbon/climate resilient activities in the context of broader decarbonization.
- Make the social case by articulating the benefits and hearing from the beneficiaries.
- Normalize the behaviour of buying high quality credits and building on the work of the IETA VCM Demand Task Force.
Five workstreams have been identified for the Hub to serve a wide range of stakeholders, including: corporate buyers; policymakers; opinion leaders; corporate CEOs/CSOs; journalists; and energy/climate engaged citizens. The workstreams are as follows:
- Foundation content: Information at hand for all stakeholders to check their understanding of carbon markets.
- Advocacy: Coordinated briefings with policy makers, globally along with supporting materials.
- Media and digital: Develop impactful content to promote through op-eds, paid media, and paid social channels. Increase media briefings and arrange visits to projects.
- Research: Commission and leverage research that underscore the importance and effectiveness of carbon markets with results and data. Identify key data points from research and infuse into our messaging.
- Education: Develop new and promote existing educational resources to provide factual and robust information about existing, developing and new carbon markets topics.
Next steps
In March, IETA aims to confirm 2024 funding levels for the Hub, and in April it will finalize and announce workstream priorities, workplans, deliverables and evaluation metrics at the European Climate Summit in Florence. The delivery of workplans, review and implementation will take place in May and onwards. Updates to donors will be provided in June and December.
“Carbon markets are evolving,” emphasizes Downes. “When the first cell phone came out we thought that was wonderful and now they’ve evolved and we’ve got our smart phones. That’s the kind of evolution we’re seeing in the carbon markets thanks to science and technology improvements over time.”
To view to previously recorded webinars on the Carbon Markets Hub, visit: https://www.ieta.org/events/the-carbon-markets-information-hub/
For further information, contact Mark Downes, IETA’s Global Communications Director, at downes@ieta.org
Featured image credit: NASA and Getty Images
