19 20 -19 290 - 9 9 9 1 MAY 2019 9 9 1 20 20 YEARS ISIS FOR FOR AMBITION AMBITION

IETA INSIGHTS

Climate Challenges Market Solutions

www.ieta.org ON THE ORIGINS OF IETA

THIS MONTH MARKS IETA’S 20TH ANNIVERSARY. ONE OF ITS FOUNDERS, FRANK JOSHUA, RECOUNTS THE IETA ORIGIN STORY

This month marks 20 years since Dadzie immediately saw the first time, the idea of an industry- IETA was officially launched. potential for a global carbon trading led international emissions trading The story of its beginnings, at system to transform not only the association was floated. By the time a UN Conference on Trade and way we deal with global climate the Second UNCTAD Emissions Development (UNCTAD) meeting change, but also the economic Trading Policy Forum convened in at the IPE, is well known. and financial relationship between a year later in Toronto, hosted by But, in actual fact, the real story of developed and developing countries Maurice Strong, the UN’s Deputy IETA’s origins begins in June 1992. – with clean technologies, finance Secretary General at the time, the and management services flowing idea of an industry-led emissions Twenty-seven years ago this month, from North to South, and supplies trading association was actually on the was held in Rio. of carbon credits flowing in the the conference agenda. While most famous for culminating opposite direction. in the establishment of the UN The December 1997 Kyoto Protocol Framework Convention on Climate The general response was “Nice agreement gave us added impetus. Change (UNFCCC), the discussions idea, Mr Dadzie!” But inside At the following year’s UN climate also took on how to design a UNCTAD “trading pollution” was talks, in Buenos Aires, a steering global carbon tax. Recognising the widely panned… But the boss committee led by Maurice Strong , administrative headache of such an wanted it done! After making the Bjorn Stigson, President of the World endeavour, UNCTAD proposed a rounds within UNCTAD, the Michael Business Council on Sustainable novel solution: put legally-binding Grubb dossier eventually landed on Development (WBCSD), and myself caps on carbon emissions and use my desk. was given the task of delivering the markets to trade carbon emission International Emissions Trading allowances and carbon credits. By 1992, I was in charge of carbon Association (IETA)… which we did in trading in UNCTAD’s Finance June 1999, just seven months later. UNCTAD’s suggestion was the Division. In my quest to find a brainchild of Michael Grubb, who conference room in Rio to hold a To be clear – carbon trading was – at the time – was Professor of seminar on carbon trading during a controversial idea from the start. Petroleum Economics at the Royal the Earth Summit, I reached out to And although the Government of Institute of International Affairs in Paolo Protasio, who I had met in Brazil, led by Ambassador Gylvan London. Grubb had first presented 1986 when he was chairman of the Meiro Filho, was the main driving his cap-and-trade idea in 1989 to Latin American Trading Association force behind the Clean Development Ken Dadzie, then Secretary-General in . This June 1992 Mechanism (CDM) for carbon of UNCTAD. Rio Carbon Trading Seminar was the credits, the Brazilian government by start of a beautiful journey that led and large had serious reservations all the way to the formation of IETA about cap and trade – fearing seven years later… that it could be used to constrain To be clear - carbon the growth and development of Fast forward to the summer of 1996, developing economies. trading was a with Kyoto Protocol negotiations well underway. I organised the But by 1997, the head of UNCTAD controversial idea First UNCTAD Emissions Trading was now the former Finance Minister from the start Policy Forum, hosted by Dr Richard of Brazil, Ambassador Rubens Sandor in Chicago. There, for the Ricupero, who had also chaired the

IETA INSIGHTS - I4C edition - May 2019 IETA's First Board Meeting held at Shell HQ, 1999

Dadzie immediately It’s satisfying to be here, 20 years Executive Director (1999-2001). He is on, and see what our hard work has an Honorary Member of IETA. saw the potential for a achieved. But there are still so many global carbon trading challenges ahead, and our work is far Frank has been fortunate to be able from done. Over the past 20 years, to combine a distinguished UN career system to transform IETA has asserted itself time again with executive positions in the private as the leading voice of business on sector, mainly in Europe and China, carbon markets and has successfully the way we deal with including: Global Director of Carbon contributed thoughtful and meaningful global climate change input to policy arena all around the Trading at Andersen, London, UK (on world. I look forward to seeing what leave from UN); Managing Director, and the relationship IETA can achieve in the next 20 years! Natsource Tullett Europe, London, UK between developed and (on leave from UN); CEO at a carbon Frank is widely recognised as one projects developer in , China; developing countries of the fathers of carbon trading. His and Executive Director at a carbon experience includes 25 years in projects fund manager in Hong Kong. leadership positions at the United He is currently CEO at Emissions Asset Rio Earth Summit in 1992. Ricupero Nations in Geneva (1981-2006) Management, a member of the Carbon gave me his full support to push ahead where, among other things, he led Asset Group. with the launch of IETA. And, in turn, the UN’s International Expert Group I offered to nominate Paulo Protasio, on Emissions Trading (1990-99), with the backing of the Government of the UNCTAD Emissions Trading Brazil, to be the first President of IETA. Policy Forum (1996-99), and the International Working Group on the Things moved very quickly then, and Clean Development Mechanism with the EU ETS kicking off in 2005, (CDM), (1998-99). Frank is one of the IETA’s work and membership soon founders of the International Emissions exploded. Trading Association, and was its first

IETA INSIGHTS - I4C edition - May 2019