Global and Local Carbon Pricing An NGO Perspective Aki Kachi Carbon Market Watch Chile, May-June 2017 Global warming is an imminent threat

https://www.nytimes.com/interactive/2017/05/18/ climate/antarctica-ice-melt-climate-change.html UNFCCC and Paris Agreement

UNFCCC Article 2: The ultimate objective of this Paris Agreement Article 2: Holding the increase Convention and any related legal instruments in the global average temperature to well below that the Conference of the Parties may adopt is 2°C above pre-industrial levels and pursuing to achieve, in accordance with the relevant efforts to limit the temperature increase to provisions of the Convention, stabilization of 1.5°C above pre-industrial levels greenhouse gas concentrations in the Parties aim to reach global peaking of atmosphere at a level that would prevent greenhouse gas emissions as soon as possible, dangerous anthropogenic interference with the recognizing that peaking will take longer for climate system. developing country Parties, and to undertake rapid reductions thereafter in accordance with best available science, so as to achieve a 1992 balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century

2015 Just transition, human rights, intergenerational equity

Paris Agreement Preamble:

Taking into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities,

Acknowledging that climate change is a common concern of humankind, Parties should, when taking action to address climate change, respect, promote and consider their respective obligations on human rights, the right to health, the rights of indigenous peoples, local communities, migrants, children, persons with disabilities and people in vulnerable situations and the right to development, as well as gender equality, empowerment of women and intergenerational equity, Externality of CO2

• Social Cost of Carbon: 20-40 USD rising rapidly • OECD 30 USD • OECD definition of carbon pricing: carbon taxes, energy taxes, cap and trade

Arthur Cecil Pigou Carbon pricing efforts are falling short, but even modest collective action can deliver significant progress -- OECD 26/09/2016

European Union

Figure 1: Historical developments of EU ETS annual cap (Cap), annual verified emissions from sources covered by the EU ETS (Emissions), annual offsets surrendered for compliance (Offsets) and average

December future prices (CO2 price). Source: adapted from Grosjean et al. (2014).

California Article 6

1. Parties recognize that some Parties choose to pursue voluntary cooperation in the implementation of their nationally determined contributions to allow for higher ambition in their mitigation and adaptation actions and to promote sustainable development and environmental integrity. What does that mean? Lessons from Kyoto mechanisms • Not polluter pays • Additionality • Perverse incentives • Human Rights • Sustainable Development • Transition to a low carbon economy • Contributes to oversupply in ETS (undermines effectiveness of a tax) Cost of renewable energy

Civil society’s role “Price it right. Tax it smart. Do it now.”

-- Christine Lagarde, Managing Director of the International Monetary Fund 20 April2017 Thank you!

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