London — The International Emissions Trading Association Monday urged countries to agree to a new unified international carbon market project crediting mechanism at a United Nations climate summit in Paris in December.
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Geneva-based IETA urged governments attending the UN climate talks to adopt decisions that would unify the range of emissions crediting systems currently in place and to make the new system operational by 2017.
"Developing countries can move to low-carbon pathways faster with the right set of market mechanisms and tools," the group said in a position paper setting out its priorities for the Paris summit.
The current mix of emissions-offsetting mechanisms under the UN includes the Clean Development Mechanism, which allows companies or governments to earn carbon offset credits in return for investing in projects that cut greenhouse gas emissions in developing countries.
It also includes Joint Implementation, which is the CDM's equivalent mechanism for projects in industrialized countries; REDD+, a system for reducing emissions from deforestation and forest degradation; and a so-called New Market Mechanism under the Paris deal.
IETA called for all those systems to be unified into a single coherent crediting system for the post-2020 period, which would allow countries to transfer units from their national action plans to other countries, based on a transparent accounting framework.
"The Paris 2015 climate summit can prompt a sustained wave of business action and investment through carbon markets," IETA said.
"In the past year, hundreds of governments and businesses have sounded a call for carbon pricing to stimulate transformative investments in climate action. The Paris agreement should secure a sound foundation for carbon pricing, implemented [through] technical decisions on market elements," it said.
CORE DECISION THIS YEAR, DETAILS COULD FOLLOW
Climate policy observers say the Paris summit is likely to give rise to a basic agreement on a core global climate protection deal to start in 2020, based on national climate targets and action plans governments submitted ahead of the talks.
But technical details on market mechanisms may have to wait for subsequent decisions by the COP -- the Conference of Parties to the UN Framework Convention on Climate Change.
"Markets could grow from a simple provision in the agreement, with detailed implementation rules specified in COP Decisions. A revitalized crediting mechanism could unleash greater action in developing countries, and a set of market-development tools could strengthen the capabilities in developing countries in launching their own market systems," IETA said in the paper.
IETA also said the UN's Green Climate Fund can become a valuable source of finance for developing countries to achieve their emissions mitigation and adaptation goals.
"Working alongside market mechanisms, the GCF can multiply the effectiveness of private-sector capital in financing low-carbon projects and programs. It can 'de-risk' investments in developing countries and accelerate clean development," the group said.
IETA is a non-profit business organization that seeks to establish a functional international framework for trading in greenhouse gas emissions reductions.
"For parties to achieve the goal of limiting global warming to 2 degrees Celsius, they need the advantages of flexible market-based policies. If the Paris summit produces no clear guidance and architecture on international carbon markets, it could result in fragmented actions and weak signals on carbon pricing," it warned.
The 21st Conference of Parties to the UNFCCC (COP21) is set to take place in Paris from November 30 to December 11.
Under the UN process, almost 200 countries agreed in Durban in 2011 to adopt a universal legal agreement on climate change no later than 2015 to start in 2020, while pledging to scale up emissions reduction efforts ahead of that date.
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