LIFE - Deepening International Cooperation on Emissions Trading

PROJECT DESCRIPTION

BACKGROUND

In the context of the Paris Agreement on climate, signed in 2016, and in view of the possible future integration of carbon markets, there is a strong need for enhanced international cooperation to foster emissions trading around the world. Building on the experience of the EU Emissions Trading System (EU ETS), the EU plays a leading role in this area. According to Article 6 of the Paris Agreement, which offers Parties to the United Nations Framework Convention on Climate Change (UNFCCC) the opportunity to cooperate when implementing nationally determined contributions (NDCs), signatories are allowed to internationally transfer mitigation outcomes, paving the way for the integration of ETSs. This process requires much cooperation between the countries involved, and a deep knowledge of the existing ETSs, to be able to evaluate the pros and cons of different possible forms of integration. However, this precondition is far from being realised, considering that ETSs are very complex policy instruments, and that transparency and trust among the regulators is of the utmost importance.

OBJECTIVES

The ultimate objective of LIFE DICET is to support policymakers at EU and Member State levels in deepening international cooperation for the development and possible integration of carbon markets. In particular, the project will support the stakeholders involved in: a) acquiring knowledge of how carbon markets function, b) establishing effective communication, and c) exchanging high-quality information, especially between the European Commission and its international counterparts.

LIFE DICET will provide EU and Member State policymakers, who are directly or indirectly involved in international carbon market cooperation, with a support package that responds to their needs.

RESULTS

Expected results:

establish an expert group on carbon markets composed of representatives of the European Commission (EC), as the EU ETS regulatory authority, regulators of other ETSs, experts from academia, international organisations, NGOs, and the private sector;

establish the Carbon Market Policy Dialogue (CMPD) with the aim of deepening cooperation between the EC and other ETS regulators. At least 5 cooperation mechanisms will be identified and proposed, between the EC and others participating in the CMPD, to promote the development of individual ETSs and their integration;

produce a comparative assessment of the ETSs in the CMPD, with a view to their possible integration;

publish a summary of the issues discussed in the CMPD to facilitate knowledge transfer to a wider audience of policymakers and stakeholders, to be done also by means of two executive training courses and two webinars;

implement an information and knowledge sharing platform on international carbon markets targeting EU and Member State policymakers; and

disseminate the results of the comparative assessment and the CMPD, as well as the views of other experts on international carbon market cooperation.