Carbon pricing re-enters draft Paris climate agreement

Ben Lee

20-Oct-2015

Carbon pricing and regulating emissions from shipping and aviation made it back into a draft global climate agreement released early on Tuesday morning.

Inclusion of these elements would encourage the use of markets around the world to tackle greenhouse gas emissions and could lead to other emissions trading systems (ETS) to link with the EU’s.

“Putting a price on carbon is an important approach for the cost-effectiveness of the cuts in global greenhouse gas emissions,” the latest draft agreement said.

However, whether the inclusions remain until the final version remains to be seen as negotiations are likely to be intense over the next few weeks.

Countries are meeting at a UN-held event in Bonn, Germany, this week in the last official negotiation session before a major climate deal is expected to be agreed in Paris in December.

Carbon pricing calls

Certain elements – such as significant mention of carbon pricing – dropped out of a slimmed version of the negotiating text which emerged earlier this month (see EDCM 5 October 2015). The aim of the smaller text was to make negotiations easier.

But as talks restarted on Monday, market mechanisms made it back in amid heavy lobbying. Numerous state, regional and city leaders as well as business groups in three separate calls asked this week for carbon pricing to feature in the Paris agreement.

“There has never been a global movement to put a price on carbon at this level and with this degree of unison,” World Bank Group president Jim Yong Kim said on Monday.

Transport emissions

Wording on reducing emissions from transport and shipping made it into the text on Tuesday. The EU on Monday called for their inclusion (see EDCM 20 October 2015).

The UN aviation body International Civil Aviation Organization (ICAO) is in the process of developing a market-based measure to reduce airline emissions.

Brussels is keen for ICAO to do this after putting on hold plans to expand the geographical scope of aviation in the EU ETS. ben.lee@icis.com

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