National Carbon Markets Side Events – Nijmegen – 13 April 2018

On 13 April last, the partners of the Green Deal Pilot National Carbon Market in the Netherlands hosted a side event to the programme of the Conference Ports and the City in Nijmegen. The aim of the event was to exchange experience with a group of international practitioners in the areas of climate change mitigation and carbon markets and facilitate mutual learning.

Speakers at the event were:

From the rich discussion, we picked up four key topics:

  • For successful carbon markets it is important to not only focus on the supply side of projects, but also on the motivations of potential buyers of certificates. One observation was that many carbon certificate schemes do not aim at creating ‘rights to emit’, but, instead, certificates showing that a buyer has invested in a clean, low-emission project and thus taken his/her social responsibility.
  • Carbon certificate schemes struggle with the role of the national governments, or governments struggle with defining their roles in certificate schemes: should it be an active role being on top of emission reductions that the government needs for complying with Paris goals, or should it be a more passive role in terms of ‘when it’s good for the climate, we’re fine’? In the Netherlands Green Deal context,  the national government collaborates with private partners in a public-private partnership.
  • Practitioners in carbon certificate markets struggle with the concept of additionality, especially that of policy additionality. It is clear that when a measure is mandatory by law, it cannot generate emission reduction certificates. It is also clear that when no policy exists in an area, emission reduction action would be eligible for carbon certification. However, it is the grey area between ‘hard’ and no policy that is difficult to handle. For example, when the Netherlands’ government agrees with the inland shipping sector on an emission reduction goal of 20% by 2030, does that mean that no longer carbon certificates can be generated in this sector, or is it precisely the other way round and could carbon markets actually provide welcome market instrument support to realising this goal. The event’s discussion tended toward that latter.
  • Finally, prices of certificates were discussed, including price setting through price floors. It was generally felt that the price of a carbon certificates does/should not only reflect the carbon benefits, but also other benefits such as regional development, social aspects, technology deployment support, etc. For example, practice shows that potential certificate buyers are willing to pay a higher price for certificates if the project takes place in their own region.

 

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