Eyes on 2021
Here at the dawn of December, IETA is reflecting on a difficult year – and looking ahead to some exciting possibilities for 2021.
The policy wheels are turning in many governments as they consider new, more ambitious NDCs for COP 26 in Glasgow in 2021. We had hoped that the Glasgow meeting would be done by now, giving markets clarity for the next phase of international cooperation through Article 6. Instead, we’re looking ahead to making Glasgow even more profound, with a growing number of governments and businesses setting net-zero targets. These help show us how markets can encourage greater ambition – if negotiators can coalesce around a credible and workable set of guidelines. Hopefully, the extra time can be used wisely.
New potential in the US?
The Biden administration is beginning to take shape. We know that rejoining the Paris Agreement is a top priority. The President-elect is also raising the stakes on the White House’s climate engagement, with the appointment of true climate heavyweights to key roles.
The new climate envoy, former Senator John Kerry, knows how markets can drive climate action – and bring business and environmental advocates together. As Secretary of State in the Obama years, he knew markets are essential in making the goals of the Paris Agreement achievable.
Kerry’s interest in market-based approaches dates back to the Kyoto days, when he was in the Senate. I remember briefing him in the halls of the Kyoto negotiations on the potential of market mechanisms to deliver benefits. Or maybe he briefed me? Let’s say my job was easy, since he already knew the score.
Janet Yellen, Biden’s nominee for treasury secretary, also has a long history with market incentives from carbon pricing. When she was head of President Clinton’s Council of Economic Advisors, I helped prepare her for Senate testimony on the Administration’s economic modelling of the Kyoto Protocol and how its mechanisms could improve cost effectiveness. I saw how the Kyoto opponents on Capitol Hill found her to be a tough opponent – they didn’t want to tangle with her on the merits, given her expertise.
As I write, some key administration positions are yet to be filled. But, suffice it to say, the US climate posture will turn from night to day. On the substance, I expect the early focus will be on COVID-19 and economic recovery, which will undoubtedly involve climate-friendly investment. As time progresses, the US will need to engage in international markets if it is to achieve Biden’s goal of net zero emissions by 2050.
I’m optimistic that IETA can be a constructive partner in working on practical market solutions that fit the US political scene. More on that next year!
In lieu of COP, our first virtual Carbon Markets Pavilion – with ICAP
I hope you were able to tune in for some of the events in our Carbon Markets Virtual Pavilion last month. We teamed up with our friends at the International Carbon Action Partnership to co-host about 50 events with a number of other partners. We’ve posted recordings of all the sessions, which you can find on the pavilion’s website.
Even without a COP this year, the Virtual Pavilion provided a platform to advance the understanding of the value of carbon markets in meeting the Paris goals. The sessions spanned time zones quite effectively, giving an opportunity to review progress from New Zealand to Asia, and to Europe and the Americas, in both compliance markets and voluntary initiatives.
New opportunity with ITN Productions
Finally, in November IETA launched a collaboration with ITN Productions to co-produce a news-style programme called Blue Sky Thinking: The Race to Achieve Net Zero Emissions. The producers wanted me to describe the role of markets in getting to net zero, but we didn’t know that the film crew would arrive at my house just a few days after we got hit by Hurricane Sally so the intro film took a slightly more personal turn than originally intended.
ITN will work with us to produce this programme over the coming year, of how markets are driving change towards net zero goals. It will be aired next autumn during the Glasgow summit.
Please keep safe and stay connected. We’ve got a lot to do together in the coming weeks, in spite of the COVID constraints. 2021 is already shaping up to be exciting – it’s not too late for you to get involved.
President & CEO, IETA
For more information about IETA and our work, check out www.ieta.org