Recommandé
Recommandé
Contenu connexe
Tendances
Tendances (19)
Similaire à Carbon Market 2.1? Networks and the riddle of fair and ambitious climate cooperation (Alan D. Lee, Feb 2016)
Similaire à Carbon Market 2.1? Networks and the riddle of fair and ambitious climate cooperation (Alan D. Lee, Feb 2016) (20)
Dernier
Dernier (20)
Carbon Market 2.1? Networks and the riddle of fair and ambitious climate cooperation (Alan D. Lee, Feb 2016)
- 1. Carbon Markets 2.1? Networks and the riddle of fair and ambitious climate cooperation Alan D. Lee 李云书 Presentation to the Beijing Energy Network 2016.02.03
- 2. Title of Presentation 2 The slides are made available for the reference of those who attended the presentation, and are not intended as a stand alone document. The slides contain findings of various studies which are best considered in context. See the last slide for a bibliography. The information in these slides does not necessarily represent the views of the World Bank Group or any other organization.
- 3. Overview Title of Presentation 3 Networks… 1. Good reasons to link carbon policies ($+) 2. Linking is limited by diversity and by design 3. Consider different ways to build and manage links …and the riddle of fair and ambitious climate change 4. Assessing relative contributions is key to linking 5. Assessments face technical and social constraints 6. Consider how to build transparency and trust
- 4. Title of Presentation 4 Why the interest in carbon markets? “Immediate pro-poor, emissions-reduction policies can drastically limit long-term climate change impacts”
- 5. International cooperation can reduce overall costs of achieving climate stabilization goal by 10–70% Source: Kossoy et al. 2015 based on Hof et al. 2012 5
- 6. Explicit carbon pricing instruments are proliferating Source: Kossoy et al. 2015
- 7. With China’s national ETS, pricing policies will extend to one-fifth of global emissions Title of Presentation 7 Source: Kossoy et al. 2015
- 8. Overview Title of Presentation 8 Networks… 1. Good reasons to link carbon policies ($+) 2. Linking is limited by diversity and by design 3. Consider different ways to build and manage links …and the riddle of fair and ambitious climate change 4. Assessing relative contributions is key to linking 5. Assessments face technical and social constraints 6. Consider how to build transparency and trust
- 9. Instruments vary widely in type and scope Source: Kossoy et al. 2015
- 10. Linkage faces many challenges • Technical differences • Policy and political differences • How many offsets are OK? e.g. 8% • How many allowances are OK? e.g. no ‘hot air’ • What kind of offsets? HFCs, N20, CCS • Other criteria: ‘sustainable development’ 10
- 11. Title of Presentation 11
- 12. Title of Presentation 12
- 13. Title of Presentation 13
- 14. al Carbon Market beyond reach? ha n a c h a te Many lessons from linkage experience to date Source: Prag, Briner and Hood, 2012
- 15. Paris Agreement: Article 6 on cooperation 15 6.1 Recognizes all kinds of NDC cooperation 6.2-6.3 Any internationally transferred mitigation outcome (ITMO) must be consistent with central guidance 6.4-6.7 Central authority supervises mechanism to mitigate GHGs and support sustainable development (SDM) 6.8-6.9 Framework for non-market approaches NDC = Nationally Determined Contribution. ‘SDM’’ is one possible acronym for the 6.4 mechanism.
- 16. Kyoto 1997 to Paris 2015: three key differences Kyoto Protocol Paris Agreement Who has to contribute to mitigation? Higher-income countries (but US not a party) All countries (according to principles of fairness) How do countries cooperate to mitigate? Centrally-defined markets, with mechanism for offsets from lower income countries (CDM) No mention of ‘market’, but Article 6 provides a hook for existing and new markets to count, with more or less light role for central body. What happenes if targets are not met? Penalty units supposed to carry to future commitment. (Canada withdrew) No particular penalty. Facilitate committee of experts (name and shame?) 16
- 17. Overview Title of Presentation 17 Networks… 1. Good reasons to link carbon policies ($+) 2. Linking is limited by diversity and by design 3. Consider different ways to build and manage links …and the riddle of fair and ambitious climate change 4. Assessing relative contributions is key to linking 5. Assessments face technical and social constraints 6. Consider how to build transparency and trust
- 18. Cooperation takes many forms Offsets Tax Trade scheme Trade scheme Tax eg. Assigned allocations among EU member states in Kyoto Protocol e.g. Certified Emissions Reductions under the Kyoto Protocol Trading allowances used for compliance in place of tax payments, and vice versa. Offsets used in place of tax payments (e.g. CERs in Mexico) Cross-border tax harmonization
- 19. Bridges and gates to build and manage links • Entry criteria (scheme-level) e.g. ‘Trading ready’ plans under US Clean Power Plan -> see spare slides • Full linking • Qualitative limits (what kind of units) • Quantitative limits (how many units) • Absolute # or relative % • Entity or scheme-level • Discounting • Risk-based • Mitigation value 19 ‘Networking’: Accept differences in design and ambition of instruments. Seek to facilitate trade by assigning a value to these differences.
- 20. 20 Innovating and building readiness for carbon pricing Enabling scale-up of carbon pricing efforts for a meaningful price on carbon Enabling connectivity of carbon pricing efforts for a long- term, stable price on carbon Partnership for Market Readiness; Pilot Auction Facility Carbon Partnership Facility; Pilot Auction Facility, Partnership for Market Readiness; TCAF Promoting the case and evidence base for carbon pricing e.g., Carbon Pricing Leadership Coalition; State and Trends of Carbon Pricing reports Planning, design, pilots Implementation, scale-up Connectivity, global trade Networked Carbon Markets The Networked Carbon Markets initiative is a key component of the WBG’s long term carbon pricing efforts
- 21. Key components of Networked Carbon Markets 1 3 2 Independent assessment framework to determine the climate change mitigation value of different climate actions and enable their fungibility in the international market. International Carbon Asset Reserve to support and facilitate carbon market related functions. International Settlement Platform to track cross- border trades and possible clearing house function. Key components of Networked Carbon Markets
- 22. The Networked Carbon Markets initiative is collaborating with a wide range of partners to progress its technical and analytical work plan Networked Carbon Markets – PARTNERS Independent Assessment Framework Partners: DNV, IISD, New Climate Institute, Climate Transparency General Principles to guide carbon asset assessment Partners: Observer to ISO Climate Change Standards Committee. International Carbon Asset Reserve Partners: INFRAS, Grantham Institute. Concept Development Partners: * ‘NCM and its compatibility with a future UNFCCC regime’ (Marcu) * ‘Comparison and Linkage of Climate Mitigation Efforts in a New Paris Regime’ (Harvard/IETA) * Achieving compatibility and synergy between the NCM initiative and Climate Clubs (Climate Strategies) * ‘A model for NCM based on the key elements and principles of Comparative Markets’ (Macinante) * ‘Options for Operationalizing a Carbon Trading Ratio Mechanism’ (Austin) * ‘Enabling Comparability of heterogeneous Emissions Trading Systems – Caps, MRV frameworks and non-compliance penalties’ (Munnings) Private sector outreach Partners: Climate Markets and Investment Association (CMIA).
- 23. Objectives of the Assessment Framework 23 Develop a mechanism for comprehensive assessment of GHG mitigation actions Establish a common framework to screen, evaluate and compare different mitigation programs Provide confidence to donors/investors on viability and level of risk of different mitigation programs Facilitate benchmarking and identify areas for continuous improvement
- 24. Three different ways to value a carbon asset (equivalent to one ‘ton’) Compliance value Financial value Mitigation value • Refers to relative value of a carbon asset in context of associated programs, policies, pledges • Does not refer to atmospheric impact of physical tons of CO2
- 25. Perspective 1 of MV: Fairness of mitigation effort • Defined as the value society attaches to the effort to reduce a unit in terms of what society thinks the jurisdiction should do to address climate change • In this case, MV can be a function of a number of factors: • The level of effort that is promised and undertaken • Characteristics of the economy • Characteristics of the emission reduction program or activity • Resources available to dedicate to mitigation efforts • Capacity to undertake mitigation efforts
- 26. Perspective 2 of MV: Risk of mitigation effort Mitigation value PROGRAM LEVEL: Risk relating to the characteristics of a specific program POLICY LEVEL: Risk relating to the characteristics of a jurisdiction’s collective low- carbon policies PLEDGE LEVEL: Risk relating to the characteristics of a jurisdiction’s contribution to addressing global climate change
- 27. Mitigation Actions Assessment Protocol Modules and module areas 27 Mitigation Action Program Definition & Scope Objectives & Targets Planning Roles, Responsibilities & Authorities Barriers Emissions reduction from Intervention Monitoring and Reporting Mitigation Action Management Entity Management Framework Financial and Investment Capacity Framework Climate Change Programs Management Investment Environment Economic and political environment Climate Change Capacity Ambition Index (jurisdiction level) Level of ambition Alignment and focus Development Benefits Sustainable Development Objectives & Targets Planning & Participation Monitoring of Sustainable Development Environmental Integrity Mitigation Value
- 28. 28 Module Rating Area Weight # Key Indicators 1. Mitigation Action Program Definition & Scope 14% 5 Objectives & Targets 20% 4 Planning 22% 7 Roles, Responsibilities & Authorities 7% 5 Barriers 7% 1 Emissions Reductions from Interventions 20% 7 Monitoring & Reporting 10% 3 2. Mitigation Action Management Entity Management Framework 30% 2 Financial & Investment Capacity Framework 33% 3 Climate Change Program Management 37% 3 3. Investment Environment Internationally Recognized Country Ratings 45% 4 Climate change infrastructure: program level 55% 4 4. Development Benefits Sustainable Dev. Objectives & Targets 35% 7 Planning and Participation 45% 8 Monitoring of Sustainable Development 20% 6 Mitigation Actions Assessment Protocol Example: Weighting of Rating Areas Pilot in Peru
- 29. Mitigation Actions Assessment Protocol Example: Module – Evaluation Areas 0 5 10 15 20 25 Definition & Scope Objectives and Targets Planning Roles, Responsibilities and Authorities Barriers Emissions Reductions from Interventions Monitoring and Reporting Mitigation Action Program Module max score score
- 30. Overview Title of Presentation 30 Networks… 1. Good reasons to link carbon policies ($+) 2. Linking is limited by diversity and by design 3. Consider different ways to build and manage links …and the riddle of fair and ambitious climate change 4. Assessing relative contributions is key to linking 5. Assessments face technical and social constraints 6. Consider how to build transparency and trust
- 31. Source: Kossoy et al. 2015 based on LIMIT database Distribution of effort affects finance flows in size and direction, for some regions
- 32. Distribution of effort affects finance flows in size and direction, for some regions Source: Kossoy et al. 2015 based on LIMIT database
- 33. Who assesses asset value for linkage? • Unilateral (complete bottom-up) • Bilateral (pairs) e.g. California & Quebec • Plurilateral (clubs) e.g. EU; RGGI in US • Multilateral (top-down) • Guidance -> Paris Agreement 6.2 ITMO • Control -> Paris Agreement 6.4 SDM • Third party (or parties)? • Independent • Multi-stakeholder governance Transparency, legitimacy, credibility all important 33
- 34. NDC assessment: key approaches and examples 34 Collective adequacy • UNFCCC INDC Synthesis Report • UNEP Emissions Gap Report Individual adequacy • Climate Action Tracker • ‘Mitigation Contribution' • PwC’s Low Carbon Energy Index NDC assessment approaches
- 35. How to calibrate contributions to the global goal and to each other? Paris Agreement provides for: • 2: Temperature goal • 4: Stronger NDCs every five years • 13: Transparency framework • 14: Stocktake every five years • 15: Compliance committee 35
- 36. Overview Title of Presentation 36 Networks… 1. Good reasons to link carbon policies ($+) 2. Linking is limited by diversity and by design 3. Consider different ways to build and manage links …and the riddle of fair and ambitious climate change 4. Assessing relative contributions is key to linking 5. Assessments face technical and social constraints 6. Consider how to build transparency and trust
- 37. What is fair? World Development 2015: Mind, Society and Behavior
- 38. Would a veil of ignorance change individuals’ beliefs on the fair distributional burden of mitigating climate change?
- 39. Carnegie Mellon University, Pittsburgh Renmin University, Beijing
- 40. An experiment • One party is richer but growing reasonably slowly • The other party is poorer, but growing quite quickly • In order to solve a common environmental problem, each party must take actions that lower their income growth • How much of a burden should each party take on?
- 41. Country A Country B An experiment
- 42. Percent of burden on China?
- 43. Country A Country B Percent of burden on China?
- 44. How much does this affect agreement? 0.54 0.95 0 0.2 0.4 0.6 0.8 1 When veil is removed Under "veil of ignorance"
- 46. Overview 46 Networks… 1. Good reasons to link carbon policies ($+) 2. Linking is limited by diversity and by design 3. Consider different ways to build and manage links …and the riddle of fair and ambitious climate change 4. Assessing relative contributions is key to linking 5. Assessments face technical and social constraints 6. Consider how to build transparency and trust
- 47. China and US: unprecedented ‘pairing’ Hart et al. 2015 47
- 48. 48
- 49. 49
- 51. Equity-based assessment tools test sensitivity of different fair share scenarios 51 CHINA USA (Source: mitigation-contribution.org, 2015)
- 52. Meinshausenetal.2015,NatureClimateChange,dx.doi.org/10.1038/nclimate2826 If all countries were to follow China, with some 35% increase of emisisons until 2030 over 2010, then global emissions would increase by a third. (Source: mitigation-contribution.org, 2015) Self-selection of preferred allocation approach
- 53. Meinshausenetal.2015,NatureClimateChange,dx.doi.org/10.1038/nclimate2826 China would have to reduce its emissions by about a third, rather than increase by a third, in order to be a 'leading example' for other countries and put the world on a 2°C track. ‘Diversity-Aware Leadership’ (Source: mitigation-contribution.org, 2015)
- 54. Country US (2025) EU (2030) China (2030) Australia (2030) INDC (announced) -26 to -28% (on 2005 levels) 40% (on 1990 levels) Peak by 2030 -26 to -28% (on 2005 levels) INDC (on 2010 levels) -22 to -24% -27% +35% (estimate) -23 to -25% Towards Distributive justice -29% -41% -32% -30% Corrective justice -51% -49% -4% -65% Leadership (on 2010 levels) -52% -61% -32% -66% Meinshausenetal.2015,NatureClimateChange,dx.doi.org/10.1038/nclimate2826 www.mitigation-contributions.org Implied targets with different approaches to fairness
- 56. Climate Transparency is a consortium of Climate Action Indices Partnering Climate Action Indices: Supporting Organizations: Carbon Transparency Index Secretariat Climate Transparency initiative: Toward a Climate Action ‘Composite Index’ Mitigation value assessment at the policy and pledge level: the Climate Transparency consortium
- 57. * Design of robust climate actions * Benchmarking * Climate finance Comparability and linkage of climate actions: * within a country * between countries on a bilateral basis Comparability and linkage of climate actions between countries on a regional or multilateral basis. Short term Medium term Long term The Networked Carbon Markets initiative – Facilitating transparency in the short, medium and long term
- 58. Next steps in 2016 and beyond • Blueprints for ‘institutional infrastructure’ • Supporting development of composite assessments • Simulating linkages • Pilot the Mitigation Action Assessment Protocol in countries, sub-nationals and cities • Study with Edinburgh, Tsinghua and CBEEX on Networked Carbon Markets for China
- 60. Bibliography • www.worldbank.org/en/topic/climatechange/brief/globally-networked- carbon-markets • www.climate-transparency.org • Hart, Zhu, Ying (2015) Mapping China's Climate Policy Formation Process. www.chinacarbon.info • Kossoy, Peszko, Oppermann, Prytz, Klein, Blok, Lam, Wong, Borkent (2015) State and Trends of Carbon Pricing 2015 (September). World Bank. doi: 10.1596/ 978-1-4648-0725-1 • Prag, Briner and Hood (2012) Making markets: unpacking design and governance of carbon market mechanisms. www.oecd.org/env/cc/ccxg • Paris Agreement FCCC/CP/2015/L.9/Rev.1 unfccc.int http://unfccc.int/documentation/documents/advanced_search/items/6911 .php?priref=600008831 • World Bank (2015) World Development Report 2015: Mind, Society, and Behavior. doi: 10.1596/978-1-4648-0342-0
- 61. Title of Presentation 61 CO2/MWh t CO2
- 63. Title of Presentation 63
Notes de l'éditeur
- Why the interest in carbon markets? The World Bank Group is a UN agency that offers finance, analysis and advisory services for governments and private sector in middle and low-income countries, with the aim to end extreme poverty and boost shared prosperity. Tackling climate change is imperative to these goals.
- Linking climate policies brings benefits. This slide illustrates cost savings from international cooperation relative to mitigation costs without cooperation for ten regions by 2030, according to one scenario. The largest circle, in South Asia, represents a 45% reduction of mitigation costs from US$9 billion without cooperation, to US$5 billion with cooperation. The largest $ sign, in Europe, represents US$39 billion in absolute cost savings from cooperation. Specific cost savings depend on the scenario of effort sharing arrangements, but in general countries nevertheless benefit from cooperation.
- Pricing instruments, such as trading and tax schemes are increasingly common. This picture would include even more countries with a broader interpretation of carbon pricing instruments.
- With the potential for so much diversity, countries face a choice of a more or less centralized approach. This slides summarizes some key advantages and disadvantages of each.
- Actually the previous slide comes from a presentation I gave in 2011, at a time when the world was still in the Kyoto Protocol first commitment period and the future approach to cooperation was still unclear.
- In 2011, I wondered whether carbon market guidelines might be a decentralized element, with detailed carbon market rules distributed at local levels.
- This slide shows the state of linkages in 2012 between various trading schemes. Since then some links have developed, while others have diminished. They have all provided important experiences to learn from.
- ‘Central’ here refers to decisions made by Parties to the Partis Agreement.
- The Paris Agreement does provide that individual contributions are based on equity and in the context of sustainable development and poverty eradication.
- Trading with common units (AAUs for KP) Offsets for a trading scheme (e.g. CERs in EU) Offsets for a tax (CERs for Mexican) Tax credits for a trading scheme Trading allowances for a tax Tax harmonization
- While the ultimate goal of the rating system is to compare units and set the basis for exchange decisions, developing a rating scheme based on these actions will also assist different stakeholders in defining the elements that a robust mitigation program should include. Doing so at the incipient development stage of Mitigation Actions will surely serve, not only to establish the basis for comparing tradable units from future crediting mitigation projects, but also to assist in the development of sound supported or unilateral Mitigation Actions. The rating protocol for mitigation actions developed as part of this project aims at assisting jurisdictions, implementing entities and authorities to strive for high quality mitigation initiatives providing a framework for the definition of the expected components of a mitigation program and different levels of development of these components during the design, implementation and operation of the mitigation action. The rating will also assist in the identification of improvement areas and set clear requirements to reach the next level of development. When broadly used, ratings provide useful information to compare different assets. Therefore, this rating can also contribute to the benchmarking of a low carbon initiative against other comparable assets, and therefore can facilitate continuous improvement and the identification of the level of effort required to improve the rating results at a project level, as well as at the institutional level.
- The assessment protocol for Mitigation Actions is formed by independent modules. Four modules are applicable to the mitigation action program itself (program-level assessment), while two other cover the level of ambition of the executing jurisdiction, and are only relevant if carbon assets are intended to be eventually traded internationally.
- Rating structure Set of risk categories Customized weight values and indicators
- A jurisdiction can act on a mitigation assessment in many different ways, as per the previous options: including discounting, qualitative/quantitative limits, etc.
- Recall from the earlier slide that cooperation is beneficial for all parties. But the stakes are uneven. How countries distribute the effort of mitigation relative to each other will affect financial flows. The next two slides show an example of flows in 2030 under two scenarios of the LIMITS project (Tavoni et al. 2015). Both scenario are compatible with a 2°C target, but distribute effort differently. This particular slide shows a scenario of equal costs per GDP. Notice that East Asia is a net recipient of financial flows, marked by a downward red triangle. The same is true for the Middle East and former Soviet Union, as strong climate mitigation impacts fossil fuel trade and reduces their GDP, so lowers their emission reduction targets.
- An alternative scenario, in this slide, is the convergence-per-capita. Here East Asia would be the source of a net outflow of finance to other regions, as its per capita emissions are relatively high (currently larger than the EU). In either scenario, the least developed regions receive net financial inflows. The largest triangle (Sub-Saharan Africa) depicts a value of $95 billion. The global flow of financial resources could be up to US$400 billion in 2030 and $2.2 trillion in 2050.
- This can be considered as an analogy with a pie, equivalent to the long-term global carbon budget, accounting for sinks. Slice of pie vs. size of pie. If the pie shrinks, each slice necessarily shrinks, all other things being equal. But changing the way you slice a pie, does not change its size. In other words, you can assess the fairness of slices Only the communication of NDCs is legally-binding. No clear link on how the global stocktake outcome could enhance action, which remains nationally determined. Transparency process provides signals to markets to redirect investments Role for governments, civil society and private sector. -> Climate Transparency. Hard to discount with respect to global outcome. One discount for all assets. Requires central authority. Applicable only to traded units -> penalizes trade
- Fairness and ambition: independent aspects? Fairness in the Paris Agreement “basis of equity and principles of common but differentiated responsibilities, and respective capabilities, taking into account different national circumstances’
- http://www.welovedc.com/2010/06/11/we-love-arts-judith-pecks-original-position/ The original position is “the veil of ignorance”: to insure impartiality of judgment, the parties are deprived of all knowledge of their personal characteristics and social and historical circumstances.
- http://www.politifact.com/truth-o-meter/statements/2014/nov/17/xi-jinping/chinese-president-world-agrees-china-had-made-enor/
- China’s collective INDC action, with the exception of the carbon intensity target, would reduce emissions in 2025 and 2030 to levels rated as medium by CAT. The emissions resulting from the 2030 carbon intensity targets, if taken in isolation, would be significantly higher, and rated as “Inadequate.” Based on the CAT analysis, the weak INDC carbon intensity targets, if taken literally, would only be reached at the expense of important national policies and actions, for example in relation to air pollution. This appears unlikely, according to CAT. Consequently, a hybrid rating “Medium with inadequate carbon intensity targets” is given. Total GHG emissions are likely to continue to increase in 2030, as only few specific actions are proposed to address non-CO₂ GHG emissions. The difference between the INDC carbon intensity goal and national actions and goals which have already been implemented is disappointing, and may reflect a desire by the Chinese government to have a “safe” international goal.
- The USA’s Intended Nationally Determined Contribution (INDC) was submitted on 31 March 2015 and commits to reduce net GHG emissions by 26–28% below 2005 in 2025, including Land Use, Land Use hange and Forestry (LULU CF). That is equivalent to a reduction of 24–31% below 2005 levels, or 12–19% below 1990 levels, after excluding LULU CF. Based on this target, and taking into account the effect of LULU CF accounting, CAT rates the US “medium”. The target is not yet consistent with limiting warming to below 2°C, unless other countries make much deeper reductions and comparably greater effort than the US A. Current US implemented policies fall short of the INDC target, leading to emissions which are 28–31% above the INDC target level for 2025. However, planned policies, such as the Climate Action Plan, would bring the USA close to meeting its INDC, if they are fully implemented. Such planned policies would lead to emissions 9% above the INDC. The USA needs to implement further policies to achieve its INDC for 2025. For meeting the pledge for 2020, the additional measures outlined by the Obama government in the “President’s ClimateAction Plan” in June 2013 would be sufficient.
- US President Obama and the Environment Protection Agency’s Clean Power Plan of August 2015, sets emissions standards for power plants in each State which comes in different forms: a ‘mass-based’ target measured in tons of CO2, and a rate based target measured in tons per megawatt-hour. Each state has a wide range of choices of how to meet one or other form of the standard,
- Different compliance pathways are available, which all lead to scenarios in which states can choose to trade carbon assets. A State can adopt the EPA model rule, or develop a “trading ready” plan which, with EPA’a approval, would allow seamless interaction among electricity generating units all across the US.
- The Plan is flexible enough to accommodate inter‐state and international trading agreements, such as RGGI, and the link between California and Quebec Province in Canada. Importantly, even states that use rate-based standards can trade, with units called “emission rate credits”, where one ERC equals an emissions-free megawatt-hour of electricity.