Calls for Carbon Markets at COP21: A conference report

A number of leading international industry associations and organizations, representing thousands of companies from around the globe, took part in a side event at the IETA/WBCSD Business Hub in the Blue Zone at Le Bourget on Wednesday, 2 December The Hub was part of the COP21 assembly of the United Nations Framework Convention on Climate Change (UNFCCC) in Paris. In the session, a series of so-called 'Carbon Markets Statements' were presented in order to emphasize the importance of including Carbon Market provisions in the Paris Agreement (UNFCCC, 2015) if global warming is to be maintained below 2 °C. While the conference, as expected, did not achieve a global carbon price, the UNFCCC Agreement (2015, p. 19) mentions the role of non-party stakeholders such as civil society, the private sector and financial institutions in addressing climate change and "recognizes the important role of providing incentives for emission reduction activities, including tools such as domestic policies and carbon pricing." The conference report summarizes the findings of the session, along with the message delivered by industry representatives. Drawing on individual industry statements presented in the session, several themes are identified: (1) the importance of Carbon Markets, (2) benefits of Carbon Markets, (3) competitiveness of organizations and development of low-carbon solutions, and (4) the need for improvements to Carbon Markets. As emphasized by the industry associations, the Paris agreement failed to explicitly address Carbon Markets, albeit the expectations of this being realized were quite low. However, countries have submitted ambitious Intended Nationally Determined Contributions (INDCs) for greenhouse gas emissions reduction, which will demand ambitious reductions in carbon emissions. Therefore, countries will be forced to bring forward policies to meet these targets, and further development of Carbon Markets may materialize in response.