Issue: 5 Thursday, 19 March 2015
We are pleased to share the International Carbon Action Partnership (ICAP) newsletter, a quarterly summary of the latest developments in emissions trading around the world and activities here at ICAP.
For more information on cap-and-trade programs in force and in the works around the world, please visit the ICAP Interactive ETS Map on the ICAP website. It is updated regularly as new information becomes available.
The ICAP Secretariat
According to a flash report released by the Tokyo Metropolitan Government, the Tokyo Cap-and-Trade program has reduced emissions by 23% compared to base-year emissions*;corresponding to an 11% reduction since the program’s start in FY2010. Launched in April 2010, the Tokyo cap-and-trade program, was the first city based ETS. Covering 20% of Tokyo’s emissions, the program focuses on reducing GHG emissions from the commercial and industrial sectors. The 23% reduction can be attributed to the continuation of measures, such as LED installation that companies took following the 2011 Tohoku Earthquake and the ensuing power crisis. As of February 2015, over 90% of covered entities have exceeded their reduction targets (6% and 8% below base-year emissions for business and industry facilities respectively) for the first compliance period (FY2010-FY2014), and 69% of entities have already surpassed their targets (15% and 17% below base-year emissions) for the second compliance period (FY2015-FY2019).* base-year emissions are the average emissions from three consecutive fiscal years selected between FY2002 and FY2007
Two months after the launch of the Korean ETS (KOR ETS), about 1,380 Korean allowances (KAU) have changed hands on the national Korean exchange. Although the spot price of KAUs has increased slightly from KRW 8,640 (about EUR 6.70) to KRW 10,100 (about EUR 7.70), so far, 85% of the overall trading activity took place on the opening day (12 January). Shortly before the launch of the system, the government announced a reference price of about EUR 7, above which it would consider measures to stabilize the market (Korean). Participating companies received only about 80% of the amount of allowances they applied for in the first trading period (media article). Some 243 companies – about half of total covered entities – had requested their individual allocation be increased. On 10 February, the Ministry of Environment granted 40 companies a total of 6.7 million additional allowances (Korean). The allowances were taken from the allowance reserve and will not affect the total emissions cap. Meanwhile, several companies have filed a class action lawsuit against the ministry’s allocation plan.
The Canadian province of Ontario released a climate policy discussion paper inviting stakeholders to submit proposals on how to best drive emissions reductions, including options for a carbon price. The paper presents emissions trading, either as a cap-and-trade or baseline-and-credit system, and a carbon tax as possible policy options. The Ministry of Environment and Climate Change will hold a series of public meetings to discuss the issue through the end of March. The government will announce their decision on an appropriate carbon pricing mechanism in the spring (media article).
A cap-and-trade bill published towards the end of 2014 by Washington Democratic Governor Jay Inslee has overcome its first hurdle, passing the House Environment Committee with a 6-to-5 vote along party lines. It has now been referred to the Appropriations Committee. If the Washington House of Representatives continues to vote along party lines, the bill is likely to be approved as Democrats have a majority of 51 to 47 seats. It will face a harder reception in the Washington Senate, where Republicans have a majority of 26 to 23 seats. Despite challenges, if the bill is passed, it could take effect as soon at July 2016.
On 10 February 2015, ICAP launched the second edition of the ICAP Status Report on ETS Worldwide. The report presents key trends and figures on emissions trading at the start of 2015, features articles from policymakers and ETS experts on trends in their jurisdictions, as well as concise, up-to-date factsheets on all jurisdictions currently implementing or considering an ETS. Both the report and infographics are available on the ICAP website.
The International Carbon Action Partnership (ICAP) will convene its next Training Course on Emissions Trading in Seoul from 19 to 28 May 2015. The course will build capacity on the technical design and implementation of ETS for the 25 selected participants from the Asia region (out of over 160 applicants).
In July, ICAP will convene a Masterclass on Emissions Trading in London open to policymakers and other stakeholders from the private, academic and nongovernmental sectors. The course targets applicants with previous knowledge and practical experience with the design and operation of emissions trading systems. Applications and more information on the masterclass will be posted on the ICAP website.
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