The European Union and the US State of California announced last week at the Global Climate Action Summit held in San Francisco their intention to strengthen their bilateral cooperation on carbon markets to maximize and leverage climate action.
The announcement was made at the Global Climate Action Summit held in San Francisco, California, last week, between European Climate Action and Energy Commissioner Miguel Arias Cañete and California Governor Jerry Brown. The EU and California have a long history of working together on climate and environmental issues and furthered that partnership by agreeing to align their carbon markets in a move which, the two governments say, could maximize and leverage climate action for economic transformation while still continuing to reduce greenhouse gas emissions.
“Pricing pollution and smartly using the accrued revenues are critical steps to ensure that sustainable ways of consumption, living and transportation become affordable choices for people around the world,” explained Femke de Jong, Policy Director for Carbon Market Watch. “But few governments currently price carbon at high enough levels to meet the Paris climate goals, according to a recent report by the OECD.
“Stepping up global cooperation on carbon markets can enable higher ambition. Such cooperation should focus on the main challenges that hamper effective carbon pricing, including the closing of regulatory loopholes such as the hand-out of free emissions permits.”
Specifically, officials from the EU and California will step up the frequency of exchanges and will focus on:
- Sending near- and long-term investment signals for transformative technologies
- Addressing economic competitiveness
- Maximizing public benefits of use of program revenues
Further, the European Commission and California will work through the existing ‘Florence Process’ — a collaborative workshop involving China, Canada, New Zealand, and others, which seeks to “collect and disseminate empirical knowledge and information on the functioning of emissions trading systems worldwide, establish a network bringing together [emissions trading scheme (ETS)] experts, and create a forum enabling interaction amongst policymakers and ETS experts.”
“Today we show that we are dedicated to remaining at the forefront of global action on climate change and the transition to a low-carbon economy,” said Commissioner Arias Cañete. “We will work closely together on carbon markets to contribute to the ambitious goals of the Paris Agreement. The experience of the EU and California can help identify opportunities and enable higher ambition. We are dedicated to working closely together, but also with others who are similarly committed to implementing cap and trade, in particular through the Florence Dialogue.”
“To avoid climate catastrophe California and the EU must collaborate even more closely on carbon pricing — and all other climate actions,” added Governor Brown.
“Greater alignment of carbon markets is not in the interest of the EU nor California unless it results in scaled-up climate action,” concluded Femke de Jong. “In light of the urgency to rapidly speed up efforts to limit global warming to 1.5C, cooperation between the EU and California should hence steer away from the time-consuming process of linking markets and center on achieving quick results such as the phase-out of free pollution permits.”
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