1、1 Practitioner Insights I CONTENTEMISSIONS TRADING WORLDWIDEInternational Carbon Action PartnershipStatus Report 20223Emissions Trading WorldwideInternational Carbon Action Partnership(ICAP)Status Report 2022EDITORIAL TEAM:Stefano De Clara,Baran Doda,Alexander Eden,Julia Gro,Maia Hall,Leon Heckmann,

2、David Hynes,Daria Ivleva,Martina Kehrer,Ernst Kuneman,Stephanie La Hoz Theuer,Trevor Laroche-Theune,Lina Li,Victor Ortiz Rivera,Anastasia Steinlein,Theresa Wildgrube.CITE AS:ICAP.(2022).Emissions Trading Worldwide:Status Report 2022.Berlin:International Carbon Action Partnership.The ICAP Secretariat

3、 expresses its gratitude to policymakers from the ICAP membership and further collaborators from the emissions trading field,who provided insightful written contributions and/or carefully reviewed the report:Luiz Mauricio de Araujo Navarro(Brazil),Raquel Breda dos Santos(Brazil),Gustavo Saboia Fonte

4、nele e Silva(Brazil),Brian Covi(California),Rachel Gold(California),Jason Gray(California),Maureen Hand(California),Blayne Morgan(California),Jeremy Newman(California),Amy Ng(California),Rajinder Sahota(California),Mark Sippola(California),Camille Sultana(California),Simon Tudiver(Canada),Marijke Ve

5、rmaak(Canada),Francisco DallOrso(Chile),Juan Pedro Searle(Chile),Qiang Li(Chongqing Carbon Emissions Trading Center),German David Romero Otlora(Colombia),Sangsun Ha(Ecoeye),Maureen Lee(Ecoeye),Hans Bergman(European Commission),Matthieu Moulonguet(European Commission),Timothee Noel(European Commissio

6、n),Julia Ziemann(European Commission),Valtteri Hrml(Finland),Niko-Matti Ronikonmki(Finland),Matleena Kurki-Suutarinen(Finland),Alexander Handke(Germany),Uwe Neuser(Germany),Dirk Weinreich(Germany),Sirui Xiao(China Emissions Exchange(Guangdong),Sara Budinis(IEA),Tom Howes(IEA),Luca Lo Re(IEA),Dida Ga

7、rdera(Indonesia),Tetsuhisa Kato(Japan),Botagoz Akhmetova(Kazakhstan),Muhamad Ridzwan Bin Ali(Malaysia),William Space(Massachusetts),Diana Karin Guzmn Torres(Mexico),Suriel Islas Martnez(Mexico),Sandra Lpez(Mexico),Jelena Ban(Montenegro),Claudia Borchert(New Mexico),Matthew Maez (New Mexico),Stephani

8、e Stringer(New Mexico),Kate Gouin(New York City),Ross MacWhinney(New York City),Scott Gulliver(New Zealand),Ted Jamieson(New Zealand),Jacqueline Ruesga(New Zealand),Paula Hemmer(North Carolina),John Cooper(Nova Scotia),Michelle Miller(Nova Scotia),Andrew Webber(Nova Scotia),Brittany White (Nova Scot

9、ia),Colin McConnaha(Oregon),Nicole Singh(Oregon),Rachel Fernandez(Oregon),Mathew Espie(Oregon),Syeda Hadika Jamshaid(Pakistan),Glenda Daco(Philippines),Jean-Yves Benoit(Qubec),Pierre Bouchard(Qubec),Steve Doucet-Hon(Qubec),Thomas Duchaine(Qubec),Diane Gagnon(Qubec),Vincent Girard(Qubec),Jean-Franois

10、 Labrie(Qubec),Stphane Legros(Qubec),Kim Ricard(Qubec),Chang-hwan Lee(Republic of Korea),Rupa Deshmukh(RGGI),Lois New(RGGI),Yuji Jigata(Saitama),Marat Latypov(Sakhalin),Jia Liu(Shanghai Information Center),Can Jiang(China Shenzhen Emissions Exchange),Tian Xue(China Shenzhen Emissions Exchange),Lishe

11、n Lin(SinoCarbon),Guoqiang Qian(SinoCarbon),Shuai Yuan(SinoCarbon),Wang Zongyi(SinoCarbon),Thomas Kellerhals(Switzerland),Sophie Wenger(Switzerland),Anothai Sangthong(Thailand),Cheng Liu(Tianjin Climate Exchange),Takuya Ozawa(Tokyo Metropolitan Government),Naobumi Higashikawa(Tokyo Metropolitan Gove

12、rnment),Ezgi Akgedik(Turkey),Kaan Moral(Turkey),Arzu nsal(Turkey),Orhan Solak(Turkey),Okan Uurlu(Turkey),Olga Yukhymchuk(Ukraine),Joe Cooper(United Kingdom),Henry Dieudonn-Demaria(United Kingdom),Charlie Lewis(United Kingdom),Hannah Lewis(United Kingdom),Jacob Rose(United Kingdom),Chris Shipley(Unit

13、ed Kingdom),Eleanor Stead (United Kingdom),Huy Luong Quang(Vietnam),Bill Drumheller(Washington),Luke Martland(Washington).The ICAP Secretariat is grateful to the Federal Ministry for Economic Affairs and Climate Action,Germany,for funding this report.adelphi consult GmbH lends scientific and technic

14、al support to the ICAP Secretariat and coordinated the compilation and production of the report.We wish to thank Katie Kouchakji(KKE Communications)for her careful editing and proofreading of the report,as well as for her communication advice.A special thanks to Sophie Hartwig,Mary Hellmich,Mattia M

15、der and Santiago Ramirez Niembro for editorial assistance.4Status Report 2022Table of contentsForeword 6Executive Summary 8Practitioner InsightsChinas national ETS 14The UK ETS 17The EUs plan to extend carbon pricing to maritime transport 19Carbon dioxide removals in reaching net zero 22The Carbon P

16、ricing in the Americas Platform 25Charting the course to carbon neutrality for all Californians 27InfographicsFrom Supranational to Local 32Emissions Trading Worldwide 34Global Expansion of ETS 36Sector Coverage 38Auctioning Revenue 39Different Shapes of ETS 40Net-Zero Targets and ETS 42Allowance Pr

17、ice Developments 435FactsheetsEurope and Central Asia European Union Emissions Trading System 48Emissions Trading System for buildings and road transport 56Finland 58German National Emissions Trading System 60Kazakhstan Emissions Trading Scheme 64Montenegro 68Sakhalin 69Switzerland Emissions Trading

18、 System 71Turkey 76Ukraine 78United Kingdom Emissions Trading Scheme 80North AmericaCalifornia Cap-and-Trade Program 88Canada 94Massachusetts Limits on Emissions from Electricity Generators 97New York City 101North Carolina 103Nova Scotia Cap-and-Trade 105Oregon Climate Protection Program 110Qubec C

19、ap-and-Trade System 115Regional Greenhouse Gas Initiative 120Transportation and Climate Initiative Program 125Washington 127Latin America and the CaribbeanBrazil 132Chile 134Colombia 136Mexican Emissions Trading System Pilot Program 138AsiaPacific Beijing Pilot Emissions Trading System 146China Nati

20、onal Emissions Trading System 150Chongqing Pilot Emissions Trading System 155Fujian Pilot Emissions Trading System 159Guangdong Pilot Emissions Trading System 164Hubei Pilot Emissions Trading System 170Indonesia 175Japan 177Malaysia 179New Zealand Emissions Trading Scheme 180Pakistan 186Korea Emissi

21、ons Trading System 189Target Setting Emissions Trading System in Saitama 196Shanghai Pilot Emissions Trading System 200Shenzhen Pilot Emissions Trading System 205Taiwan,China 210Tianjin Pilot Emissions Trading System 213Tokyo Cap-and-Trade Program 217Vietnam 222About ICAPAbout the International Carb

22、on Action Partnership 226Notes on methods and sources 231List of acronyms 236Imprint 2386Status Report 2022The critical decade of climate action is upon us.The latest assessment report of the Intergovernmental Panel on Climate Change makes clear that without rapid and large-scale emissions reduction

23、s,our collective goal of limiting warming to close to 1.5 C,or even to 2 C,will be beyond reach.Against a backdrop of extreme weather events and ever-increasing public concern about the climate emergency,many governments and companies have responded by raising their ambition.More than 150 countries

24、have submitted new NDCs and around 90%of global emissions are now covered by a net-zero target.In recent months,governments and businesses also have come together in a variety of initiatives to accelerate progress in specific sectors.With these developments we are headed in the right direction:the I

25、nternational Energy Agency has estimated that if all pledges,including those made at COP26 in Glasgow,are met in full and on time,the average global temperature increase could be limited to 1.8 C by the end of the century.Translating these targets into policies to achieve the short-term emission red

26、uctions we need is now a priority.As countries increasingly turn to implementing their NDCs,carbon pricing will be a crucial policy tool to drive decarbonization.It can play a central role in both incentivizing short-term reductions as well as supporting the longer-term transition to net-zero emissi

27、ons.As this years ICAP Status Report shows,at the end of 2021 ETSs covered 37%of emissions in jurisdictions that have enshrined their net-zero targets in law and 17%of emissions in jurisdictions where net-zero targets are under development or discussion.Having proved resilient to the economic shocks

28、 caused by the start of the COVID-19 pandemic in 2020,carbon markets performed strongly in 2021.Due to the anticipated impact on ETSs of greater climate ambition at the national and sub-national levels,several jurisdictions experienced increased market activity and rising allowance prices.The market

29、 stability provisions that many jurisdictions have implemented in recent years were able to respond to developments in the markets,whether by shoring up or containing prices,in a predictable and transparent manner.Reaching net-zero emissions by or around mid-century is now a common goal covering the

30、 vast majority of the global economy.ETSs are well suited to achieving this ambition:they provide both assurance over emissions levels and longer-term market signals needed to stimulate the investment necessary to enable the low-carbon transition.The role an ETS will play in reaching net-zero emissi

31、ons will vary among jurisdictions.For some it will be the main instrument,for others a key tool within a portfolio of GHG mitigation measures.Policymakers will need to grapple with issues such as expanding ETS coverage into new sectors,implementing new tools,and intensifying international cooperatio

32、n.The process will be a dynamic one,with systems adjusting to new challenges and opportunities in the coming decades.The road to net zero will pose challenges,some very familiar and others more novel.As ETS caps continue to fall towards zero,we will need to see significant reductions from sectors in

33、 which progress has so far been limited.This will involve further assessment of the level of free allocation provided to certain parts of the economy,while continuing to address the risk of carbon leakage through allocation and other mechanisms.For instance,in 2021 we saw the EUs proposal to introdu

34、ce a carbon border adjustment mechanism(CBAM)on selected imports.The CBAM has been conceived of as an alternative approach,which would,at the same time,allow for a raised ambition of domestic industries and level the playing field to address the risk of carbon leakage.These challenges will only grow

35、 in the next decades and the appropriate response will differ between jurisdictions.But,everywhere,the transition will require a careful balance between the need to incentivize decarbonization while maintaining the competitiveness of local industries.In this respect,the idea of an open climate allia

36、nce with common ambitious goals and comparable measures,possibly leading to a common border protection,may be useful and should be discussed in more detail.Climate action cannot come at the expense of live-lihoods.The net-zero transition will see the winding down of some carbon-intensive industries

37、and the expansion of new,low-carbon ones.The potential for green growth is significant.Nevertheless,for this Many governments and companies have responded by raising their ambition.ForewordAdvancing Emissions Trading Systems:Challenges and opportunities on the path to deep decarbonization7transition

38、 to succeed it must be just and leave no one behind.Public acceptance of carbon pricing is essential to its political feasibility,effectiveness,and longevity.As jurisdictions look to introduce or expand ETSs,and prices rise in response to an ever-shrinking carbon budget,the most vulnerable must be p

39、rotected from negative impacts.We already have examples of how to use revenues in innovative ways to achieve this.In the years ahead,we must continue to learn from each others experiences on how best to design programs to support a just transition,communicate the benefits of carbon pricing,and how t

40、o mitigate its impacts where needed,to gain and maintain public support.Looking to the future,reaching net zero and prospectively negative emissions will also require usage,storage and the removal of CO2 from the atmosphere,especially in hard-to-decarbonize sectors.As ICAP explored in 2021,incentivi

41、zing removals in an appropriate manner poses questions for the long-term design and functioning of ETSs.Removals have already been included in some ETSs through offset credits from afforestation and reforestation projects.The coming decades will see the development and scaling up of a wider variety

42、of negative emissions technologies(NETs),including direct air capture and storage(DACS).To protect the integrity of the ETS,any removal methodology will need to ensure that carbon will be permanently stored and negative impacts on biodiversity and land use have to be avoided.And finally,NETs must no

43、t jeopardize the decarbonization of the global economy,especially through ETSs.We will therefore carefully have to consider how to address removals in ETSs.ICAP will continue to explore these and other questions as part of its ongoing work on ETSs in the context of net-zero goals.The sheer scale of

44、the task of reaching net zero reminds us that the climate crisis is a common challenge and will require international collaboration.ICAP was founded with the aim of fostering this spirit of cooperation through the linking of ETSs.It was therefore good news to see the adoption of Article 6 rules at C

45、OP 26 in Glasgow.These rules should pave the way for a new wave of international cooperation on climate action through market mechanisms.Article 6 is a broad framework which enables countries to pursue various forms of market-based approaches under the Paris Agreement,from ETS linking and internatio

46、nal crediting to other forms of country-to-country agreements.With the COP 26 outcome,governments now have the long-awaited clarity on the Article 6 rules that will enable them to consider the role of international collaboration in their NDCs as well as in the context of their domestic ETS.We also k

47、now the climate emergency requires all hands on deck,and the recent decisions at COP 26 cleared the way for the investment of billions of private capital alongside government measures to spur climate action.While the task ahead is daunting,we look back at 2021 with a renewed sense of optimism that t

48、here is international will to move forward.We see this reflected in this years Status Report,through the start of Chinas ETS,the Glasgow Declaration on Carbon Pricing in the Americas,ambitious reforms proposed in several jurisdictions,and the number of net zero commitments supported by ambitious ETS

49、s.The years of preparation are coming to fruition as more countries move from the planning stage towards implementing emissions trading.For many of these countries,ICAP has already been part of the journey.For all of us,ICAP will continue to be at the forefront of developments in 2022 through its ca

50、pacity-building programs,technical dialogues,and unique forums for peer-to-peer learning and knowledge sharing as we work together to make progress in this critical decade.The years of preparation are coming to fruition as more countries move towards implementing emissions trading.RAJINDER SAHOTACo-

51、chair of the International Carbon Action Partnership and Deputy Executive Officer Climate Change and Research,California Air Resources BoardDIRK WEINREICHCo-chair of the International Carbon Action Partnership and Head of Division Climate Legislation,Emissions Trading,Federal Ministry for Economic A

52、ffairs and Climate Action,Germany8Status Report 2022Executive SummaryClimate change is the defining challenge of this decade.Without concerted efforts to decarbonize economies around the world and reduce emissions,our collective goal of limiting global warming to 1.5 C,or even to 2 C,will be out of

53、reach.Governments and companies are responding to the climate emergency by ramping up their ambition:setting new climate targets and committing to net zero by mid-century.Achieving net zero in time will be challenging.Governments net-zero commitments cover roughly 90%of global GHG emissions,but many

54、 are not yet supported by near-term policies.To reach these long-term goals,countries must rapidly implement adequate policy frameworks and those already in place must be bolstered.In this context,emissions trading will be critical,and will increasingly play a key role as the policy tool of choice t

55、o drive decarbonization.At the end of 2021 ETSs covered 37%of emissions in jurisdictions that have enshrined their net-zero targets in law and 17%of emissions in jurisdictions where net-zero targets are under development or discussion.The 2022 International Carbon Action Partnership(ICAP)Status Repo

56、rt demonstrates how ETS develop-ments are proliferating and picking up pace across the globe,with an increasing number of systems.There are now 25 such systems in force,covering 17%of global GHG emissions.22 ETSs are currently under develop-ment or under consideration,mainly in South America and Sou

57、th-East Asia.Today,almost 1/3 of the global population lives under an active ETS.Existing systems are maturing,becoming increasingly resilient to external shocks,and several governments around the world are undertaking reforms to align their ETS with net-zero targets.This increase in global ambi-tio

58、n has resulted in an increase in carbon prices across almost all systems,reflecting the expectations of more ambitious emissions caps in the future.Allowance prices in the EU ETS reached a record high of more than USD 100 at the end of 2021,and the markets auctions generated a revenue of USD 36,7 bi

59、llion in 2021,repre-senting a growth of almost 63%.The rise in allowance prices and revenues can be observed in nearly all systems,from North America across to the Asia Pacific.In North America,the allowance price in California and Quebec grew from USD 18 to USD 28,and from USD 8 to USD 14 in the Re

60、gional Greenhouse Gas Initiative(RGGI).Across the Asia-Pacific region,significant price rises were recorded in Korea,from USD21 to USD 30,and in New Zealand,from USD 27 to USD 46.While carbon prices are rising against a backdrop of high energy prices in several regions around the world,public accept

61、ance of carbon pricing is essential to its political feasibility,effectiveness,and longevity.Emissions trading offers tools to ensure that the most vulnerable are protected from negative impacts,such as Californias ring-fencing of ETS revenues to support disadvantaged and low-income communities and

62、household rebates via utility bills.By the end of 2021,global ETSs had raised a record USD 161 billion in auctioning revenues,growing by over 50%since the end of 2020.In the years ahead,we must continue to learn from each others experiences on how best to design programs to support a just transition

63、,communicate the benefits of carbon pricing,and how to mitigate its impacts where needed,to gain and maintain public support.New systems are gaining momentum in their design and implementation.Chinas national ETS commenced trading,becoming the largest carbon market in the world in terms of covered e

64、missions.It covers over 4 billion tCO2 representing over 40%of its emissions.2021 also witnessed the launch of national carbon markets in the UK and Germany.This newest edition of the ICAP Emissions Trading Worldwide report lays out the latest developments and salient ETS trends from the past year.A

65、 series of infographics examine and compare ETS facts and figures,and detailed factsheets have been compiled on each system currently in force,under development,or under consideration.The report also features in-depth articles from policymakers and experts from key jurisdictions around the world.To

66、ensure that the maritime sector contributes to the EUs climate ambitions,the European Commission made the proposal to extend the scope of the EU ETS to cover CO2 emissions from large ships.In its article,the Commission presents the key stages of this sectoral expansion,the main opportunities and cha

67、llenges,as well as the need for further action in the framework of the International Maritime Organization.The article provides important insights for moving forward on maritime decarbonization.13ALMOST 1/3 OF THE GLOBAL POPULATION LIVES UNDER AN ETS IN FORCE9Meanwhile,the UK ETS has now been up and

68、 running for one year.An article from the UK government provides reflections on the progress the UK has made and how it has aligned the system with its national net-zero frame-work.As a frontrunner on net-zero climate legislation,the UKs experience yields valuable lessons on how to balance ambition

69、with competitiveness and preserving stability for participants.California has seen firsthand the destructive force of climate change,with wildfires ripping through the state this past year and exacerbating existing disparities in the community.Its article lays out the jurisdictions innovative approa

70、ches to ensuring a sustainable and fair transition to net zero.The California ETS provides policymakers around the world with an important real-world example of how distributional impacts of carbon pricing instruments like ETS can be addressed and envi-ronmental justice advanced.This issue will cont

71、inue to grow in relevance as jurisdictions hotly debate how to strengthen and expand their own ETSs.The worlds largest carbon market,the Chinese national ETS,is discussed by experts from SinoCarbon,a prominent Chinese think-tank.Having now completed its first compliance cycle,China is looking ahead

72、at strengthening the systems legal foundations,expanding the scope of the ETS to different industrial sectors,improving data quality,and making decisions on offset use and how to allocate allowances.The Carbon Pricing in the Americas Platform(CPA)sheds light on the increasing interest in carbon pric

73、ing across the Americas.With its article,the CPA reflects on the role and prospects for carbon markets in the region,and how it will continue to support these discussions by fostering dialogue,sharing best practice,and facili-tating the convergence of carbon pricing policies.Finally,the Internationa

74、l Energy Agency(IEA)details what it means to translate net-zero targets into policy measures that can deliver the necessary level of emis-sion reductions and removals.The article assesses the role of emission removals and the use of both domestic and international carbon markets to drive them.This i

75、s an emerging debate as we strive for net zero,and understanding the implications of these technologies will increasingly gain relevance.A Year of ETS DevelopmentsDuring the course of 2021,global ETSs have under-gone a series of developments,including changes to make them compatible with the net-zer

76、o targets many jurisdictions have committed to.New systems are also being introduced as jurisdictions work to design and implement ETSs.Below,we summarize updates from the systems currently in force(i.e.,those already in operation)and those under development(i.e.,juris-dictions in which a mandate fo

77、r an ETS is in place,and where system rules are currently being drafted),as well as other jurisdictions with major ETS develop-ments in 2021.EUROPE AND CENTRAL ASIAEuropean Union:Following the release of the“Fit for 55”package in July 2021,a comprehensive reform package is underway to align the EU E

78、TS with the new EU-wide 2030 climate target.The proposed reforms include adjustments to the cap,the MSR,benchmarks,the inclusion of the maritime sector,a border carbon mechanism,and a separate fuel ETS for buildings and road transport.The widely-awaited proposal was one of the key drivers pushing EU

79、 carbon prices to record levels in 2021.Germany:Germany successfully launched its national ETS in 2021.It covers fuels from the transport and building sectors upstream and complements the EU ETS.In 2021,regulated entities opened registry compliance accounts,started monitoring their emissions and bou

80、ght the first allowances from the exchange or authorized intermediaries.Finland:In March 2021,the Ministry of Transport and Communications in Finland set up a cross-sectoral working group tasked with assessing and preparing for a national ETS to cover the road transport sector.Kazakhstan:The system

81、made a full transition to benchmarking as the only allocation method.The cap for 2021 had been established at 159.9 MtCO2,for one year only,as opposed to the three-year cap of the previous 20182020 phase.55%JURISDICTIONS MAKING UP 55%OF GLOBAL GDP ARE USING EMISSIONS TRADING10Status Report 2022Execu

82、tive Summary I CONTENTMontenegro:The EU and Western Balkan states,including Montenegro,agreed on a roadmap for climate policy implementation in October 2021.Under the“Green Agenda Action Plan”,the EU will support Montenegros efforts to align its national legislation with the blocs by 2024.Sakhalin:I

83、n 2021,the results of the regional GHG inventory in Sakhalin were published,showing that 95%of emissions are energy related.The Russian Ministry of Economic Development in cooperation with the government of Sakhalin prepared a draft law to introduce mandatory requirements for carbon reporting and co

84、mpliance with the allocated emissions allowances for entities emitting 50,000 tCO2e and more.The draft passed the first State Duma reading in December 2021 and is expected to become law in early 2022.Four other regions in Russia have expressed an interest in joining the experiment.Switzerland:The Sw

85、iss ETS started its third trading period in 2021.The ministry updated allocation bench-marks in line with the EU ETS and introduced a market stability mechanism to counter future demand shocks.Turkey:In the lead up to COP 26,Turkey became the latest country to ratify the Paris Agreement and redouble

86、d its efforts to introduce an ETS.Ukraine:2021 was the first year MRV procedures,as adopted in the framework law,were applied.The first monitoring reports for 2021 are expected by the end of March 2022.Based on at least three years of data from the MRV system,Ukraine plans to develop legislation to

87、establish an ETS,which the Minister of Environ-mental Protection and Natural Resources announced in January 2021 could launch in 2025.United Kingdom:The UK ETS successfully completed its first year of operation.High allowance prices triggered the cost containment mechanism in both December 2021 and

88、January 2022,with the authorities deciding on both occasions not to redistribute or release additional supply into the market.NORTH AMERICACalifornia:California implemented program changes,including the introduction of a price ceiling and two price containment reserve tiers below it,reductions in th

89、e use of offset credits and a steeper allowance cap decline to 2030.By May,prices of California Carbon Allowances had reached record highs.Massachusetts:In March 2021,Massachusetts passed a new climate law with binding emission reduction targets of 50%by 2030 and 75%by 2040,compared with 1990 levels

90、,as well as net-zero emissions by 2050.The states ETS changed to full auctioning in 2021.Nova Scotia:The current federal approval for the provinces carbon pricing system expires at the end of this year and Nova Scotia is reviewing options for post-2022.Nova Scotia held a public consultation in 2021,

91、which included questions on carbon pricing as well as broader environmental goals and climate change policies.North Carolina:In July 2021,North Carolinas Envi-ronmental Management Commission(EMC)instructed the DEQ to initiate a rulemaking process to establish an ETS that is consistent with the desig

92、n features of the RGGI Model Rule,which would enable the state to join the regional partnership.Oregon:Oregon adopted rules that establish a new Climate Protection Program that includes an ETS for fuel suppliers.The first compliance period is 20222024,with free distribution of compliance instruments

93、 under the cap.Qubec:The cap-and-trade system began its fourth compliance period with new rules,including amended price tiers for reserve allowances and reformed eligibility for offset projects.The second half of the year saw increased allowance prices.Regional Greenhouse Gas Initiative:In May 2021,

94、the final regulation to establish an ETS in Pennsylvania covering CO2 emissions from the power sector and to join RGGI was released,alongside updated modeling results of the effects of the ETS.An emissions containment reserve started operating in 2021.The RGGI states initiated the Third Program Revi

95、ew in OF GLOBAL GHG EMISSIONS ARE COVERED BY AN ETS17%11Executive SummaryPractitioner Insights I CONTENTsummer 2021 to analyze program successes,impacts,potential additional reductions to the cap post-2030,and other design elements.Transport and Climate Initiative:In the second half of 2021,most of

96、the participating states halted their participation in TCI-P.As a result,it is currently unlikely that the implementation of TCI-P in its current form will continue.Washington:The“Climate Commitment Act”was signed into law,establishing an economy-wide cap-and-invest program to start operation in Jan

97、uary 2023.It will cover entities emitting more than 25,000 tCO2e per year.The Washington State Depart-ment of Ecology is currently developing the rules to implement the system.LATIN AMERICA AND THE CARIBBEANColombia:The“Climate Action Law”,which entered into force in December 2021,consolidates the c

98、ommit-ments presented in Colombias NDC and sets a goal to fully implement the ETS by 2030.Mexico:In 2021,the first and second allowance allocations took place.The Ministry of Environment and Natural Resources concluded the analysis and revision of the information for the first compliance period and

99、participants surrendered allowances corresponding to this period,achieving a 97%compliance rate.ASIA PACIFICChina:Chinas national ETS the worlds largest in terms of covered emissions(4.5 billion tCO2)started operating in 2021.As confirmed as part of the“1+N policy”framework in October 2021,it will b

100、e an important measure to achieve Chinas targets to peak emissions by 2030 and reach carbon neutrality by 2060.Throughout 2021,a series of ETS policy documents on key design elements such as MRV and market operation were finalized,and trading of carbon emissions allow-ances(CEAs)commenced in July.At

101、 the end of 2021,the government announced the successful conclusion of the first compliance period covering 2019 and 2020,with high compliance rate.Chinese Pilots:2021 saw the transition of the electricity generation sector from Chinese regional ETSs to the national system.Meanwhile all eight region

102、al carbon markets continued operating and further developed allocation,offsetting,MRV and trading rules.Several of them(such as Beijing,Chongqing,Guangdong,Fujian,and Tianjin)also expanded their scope or are in prepa-ration to do so.Indonesia:After a voluntary intensity-based ETS pilot for the power

103、 sector took place between April and August 2021,the much-anticipated“Presidential Regulation on the Economic Value of Carbon”was signed in October,which will serve as the framework for Indonesias carbon pricing instruments.A hybrid“cap-trade-and-tax”system was also announced,to start April 2022.Mal

104、aysia:The Malaysian government published a policy document with plans for a domestic ETS.In 2022,a trading platform for voluntary carbon market credits is planned to start,which will serve as preceding infrastructure for the ETS.New Zealand:2021 was a year of major reforms for the NZ ETS,following o

105、n from the passing of the“Climate Change Response(Emissions Trading Reform)Amendment Act 2020”.The reforms include a cap on unit supply and the introduction of an auctioning mechanism.Auctioning began in March 2021.The fixed price option,which previously acted as a price ceiling,was withdrawn after

106、2020,and was replaced with a cost containment reserve.Republic of Korea:The Korean government decided to suspend the monthly allowance auctions from February to May 2021,following assessments of low allowance prices and oversupply for the 2020 compliance year,in part due to lower emission in covered

107、 entities from the impacts of the COVID-19 pandemic.In the second half of the year,both prices and trading volumes increased.Vietnam:In January 2022,the Government of Vietnam issued a comprehensive set of regulations under the“Law on Environmental Protection”,including provisions for the development

108、 of a national ETS with a declining cap corresponding to Vietnams NDC,and the establishment of a carbon crediting program.1 Supranational8 Countries6 Cities19 Provinces&States12Status Report 2022Executive Summary I CONTENT13Executive SummaryPractitioner Insights I CONTENTPractitioner Insights14Statu

109、s Report 2022Chinas national ETS I CONTENTChinas national ETSUnderway with a smooth start,yet enhancements are needed to achieve dual climate goalsOn 16 July,2021,in the first nation-wide action to directly limit carbon emissions from enterprises,Chinas national ETS officially commenced trading.Afte

110、r almost a decade of continuous efforts to establish a national carbon pricing mechanism,growing from pilots to a national scheme,Chinas national ETS has set off to a smooth start.The market began with an initial allowance price of CNY 48.00(USD 7.44)/tonne,which then rose modestly throughout the ye

111、ar.In the first compliance period,only the power sector was covered,with some limits on compliance.Even so,more than 2,160 power companies faced obligations under the national ETS,in total covering about 4.5 billion tonnes of CO2 emissions per year.Eventually,Chinas national ETS is expected to grow

112、into the worlds largest carbon market in terms of value,with a potential transaction value of over CNY 100 billion 1(USD 15.5 billion),providing a nation-wide price signal and channeling financial resources to sectors that are crucial for the realization of Chinas dual goals:peaking emissions before

113、 2030 and ultimately reaching long-term carbon neutrality before 2060.1 The South China Morning Post“Chinas carbon neutral goals”-February 20222 Allocation is divided into two stages initial allocation followed by ex-post adjustment.First,70%of allowances are pre-allocated to power companies based o

114、n historical output.Second,after completing verification,the allowance quantities are adjusted and confirmed according to the actual power and heat supplied by generating units.CHINA NATIONAL ETS:PROGRESS IN 2021The first compliance period of the national ETS closed at the end of 2021,with a complia

115、nce rate of 99.5%,measured in terms of surrendered allowances.During the first compliance period,trading of spot allow-ances was limited to covered entities only.Though other types of market participants,such as financial institutions,were excluded from the market,they are expected to gradually be a

116、llowed to participate in the future.All of the required allowances were distributed to power companies by the government for free,based on historical output and benchmarks.2 The first compli-ance period also featured an upper limit on compliance obligations that was designed to favor gas-fired power

117、 plants and ease the compliance burden of all covered entities.Chinas offset mechanism,the China Certified Emission Reduction(CCER)system,was thrown a lifeline in 2021 when the Ministry of Ecology and Environment(MEE)issued a notice allowing covered entities to use CCERs to offset up to 5%of their a

118、nnual verified emissions for compliance purposes,with no restrictions on project type or vintage.The CCER mechanism was initially launched in 2013 but suspended operation four years later in 2017.This meant that the CCER mechanism accumulated tens of millions of offset credits that were unused by th

119、e time the national ETS was launched in 2021.The announcement by MEE opened the door to the accumulated CCER credits and enabled the mecha-nism to play an important role in compliance.The price of CCERs rose sharply after the announcement,rising to near parity with the price of allowances.By the end

120、 of December 2021,the national ETS had been running for 114 trading days,with a cumulative transaction volume of 179 million allowances and a cumulative transaction value of CNY 7.66 billion(USD 1.2 billion).The closing price on 31 December 2021 was 54.22 CNY(USD 8.40),an increase of 12.96%from the

121、starting price in July.Qian Guoqiang,Lin Lishen and Wang Zongyi SinoCarbon Innovation&Investment Co.,LtdFigure 1.China national ETS timeline 2021MEE issues“Interim Regulations for the Management of Carbon Emissions Trading(Trial)”MEE issues“Administrative Measures for the Registration,Trading,and Se

122、ttlement of the National Carbon Emission Rights(Trial)”Power generation companies emission verification completed.MEE finishes pre-allocation based on 2018 output data.China national ETS starts trading with a price of CNY 48.00(USD 7.56)MEE issues a notice that allows power companies to use CCER in

123、stock to offset up to 5%of emissionsProvincial Environment and Ecology Bureaus confirm allocation based on 2019 and 2020 outputChina national ETS completes first compliance with a closing price of CNY 54.22(USD 8.53)2021/32021/52021/62021/72021/102021/112021/1215Chinas national ETSPractitioner Insig

124、hts I CONTENTTRADING IN THE FIRST COMPLIANCE CYCLE:A DEEPER DIVEA more in-depth look into the trading activities of the first compliance period shows several characteristics.The observations that we outline here indicate a func-tioning market that is still at an early stage and may need time to matu

125、re.There is an obvious“tidal effect”with transactions rising before compliance.Three quarters of transac-tions occurred in the month prior to the compliance deadline.This could be mainly because many enter-prises were not prepared for ongoing trading and hadnt yet developed a routine transaction str

126、ategy.Another key factor to consider is that adjustments to allowance allocation were made throughout October and November,and only then could the allocation quantities received by covered entities be formally confirmed.This left less than two months for entities to prepare for compliance and comple

127、te transactions.Trading activity was lower than that of the Chinese regional ETS pilots.The cumulative trading volume of allowances in the national ETS was 179 million tonnes.Compared with the total of 9 billion emission allowances issued for the two-year compliance cycle,the turnover rate3 is only

128、2%,which is lower than the average turnover rate of Chinas pilot ETSs(5%).This is also much lower than the turnover rate of the EU ETS spot market(more than 80%in 2020)and far below that of the EU ETS futures market(more than 500%in 2020).3 The turnover rate is the annual transaction volume divided

129、by the total amount of allowances issued in the year.Transactions were mainly over-the-counter(OTC)block trades.Of all transactions,OTC block trades(100,000 tonnes)accounted for 83%of the total traded volume.Prices for block trades were on average 8%lower than those of online trades across the whole

130、 trading period.It is thought that large corporates used OTC block trades to match intra-group companies to conduct transactions at lower costs.This way,they were able to take advantage of the block trade price limit(30%of the closing price of the previous day),which allows more flexibility than the

131、 online transac-tion limit(10%)and thereby reduces overall compli-ance costs.Figure 2.China national ETS average price and volume in 2021Figure 3.National ETS online vs.block trade price difference16.07.21Volume(MtCO2)Average Price(CNY)31.07.2131.12.2115.12.2130.11.2115.11.2131.10.2115.10.2130.09.21

132、15.09.2131.08.2115.08.2203040506070CNYMtCO216.07.21Average block trade priceAverage online trade price31.12.2105.12.2115.10.2110.11.2110.09.2113.08.2CNY16Status Report 2022Chinas national ETS I CONTENTETS ENHANCEMENTS NEEDED TO ACHIEVE NATIONAL CLIMATE TARGETSThe construction o

133、f the national ETS cannot be accom-plished overnight.It is a multi-year mission that features different phases and continuous efforts of review and progress.“Learning by doing”will be an inevitable path for the construction and development of the national ETS.In the most recent step,China released t

134、hree important policy documents in its“1+N”framework for carbon peaking and neutrality,confirming plans to strengthen the national ETS and expand it to more sectors.In the near future,we see five key aspects that need to be addressed to ensure that the national ETS fulfills its key role in achieving

135、 Chinas dual climate targets.(1)Strengthen the legal foundationIt is likely that the State Council will promulgate new high-level legislation to replace the ministry-level decree currently in place.The new legislation will become a key milestone in the further development of Chinas carbon market.In

136、March 2021,the MEE took an important step by releasing a draft regulation for public consultation,which clarifies the intention to determine the emissions cap and allocation methods over the long run and proposes stricter penalties for non-compliance.Once finalized,the legislation is expected to pro

137、vide a more robust legal foundation for the national ETS while strengthening some of its core design elements.(2)Improve data qualityLike in the early stages of other established systems around the world,such as with the EU ETS,data quality issues were uncovered in Chinas national ETS in 2021,includ

138、ing several instances of data fraud.There-fore,the issue of data quality has been added to the governments high-priority agenda for urgent action.According to the MEE,improving data quality control will be one of the key tasks in the second compliance period.To this end,the MEE will likely take acti

139、on to strengthen qualification management,build capacity among the verification agencies and personnel,improve data submission and verification manage-ment requirements,and enhance law enforcement measures against data fraud.(3)Expand coverage to include more sectorsIt is expected that during the“14

140、th Five-Year Plan”period(202125),energy-intensive industries such as aluminum,cement,steel,petrochemicals,and paper-making will be gradually brought into the national ETS one sector at a time.The sequence of inclusion of these industries has not been officially announced yet,but market sentiment ind

141、icates that aluminum and cement are preparing to be the covered next.(4)Refine the allocation approach Allocation under the Chinese national ETS is currently based on benchmarking with ex-post adjustment for production levels.The current settings have enabled a smooth start to the system,but they co

142、uld be tight-ened in the coming period.The government has not yet announced its plan for allowance allocation for the second compliance period,and the pending decisions will have implications for the market.For the covered power companies and other market participants,it is crucial to know whether t

143、he current allocation meth-odology and benchmark levels will remain the same in the next period.China is also considering a long-term emission trajectory in the context of its national target to build a carbon-neutral economy by 2060.To achieve this target,experts are proposing that Chinas national

144、ETS should at some point move towards setting an absolute emission cap aligned with a long-term allow-ance allocation plan.(5)Restart the CCER mechanismWith the decision to allow accumulated historical CCERs onto the market in 2021,the offset mechanism became an important element in the national ETS

145、.However,market participants understand that this is an interim decision.Looking ahead,they are anticipating a clear policy on the usage of offsets as the mechanism is expected to restart in 2022.Some key information is not yet clear,for example,what types of CCERs will be accepted in the compliance

146、 market in the future.In 2021,China successfully set its national carbon market in motion.The analysis is promising,showing a smooth start to trading and compliance.Work is now needed to prepare Chinas national ETS to take the next steps towards a larger,broader,and more robust carbon market,and tak

147、e its place as one of the key poli-cies to achieve Chinas climate goals.17The UK ETSPractitioner Insights I CONTENTThe UK ETSOne year onCharlie Lewis,Deputy Director for Emissions Trading,Department for Business,Energy and Industrial Strategy(BEIS)It has been a year since we launched the United King

148、dom Emissions Trading Scheme(UK ETS).We are proud of what we have achieved so far,and it is a good time to reflect on the progress we have made.We said from the start of the UK ETS that we saw the scheme playing an important role in delivering our emissions reduction commitments.The UK govern-ments“

149、Net Zero Strategy”,published in October 2021,underlined this,placing fair carbon pricing as one of the key principles of the UKs approach to net zero.We have a wide-reaching plan to develop the scheme and make sure it lives up to these ambitions.But first it is worth reflecting on year one of the UK

150、 ETS.ESTABLISHING A NEW ETSSetting up the scheme was not without challenges,but our experience with the European Emissions Trading System(EU ETS)was valuable,as we sought to balance continuity for participants with ambition.The sectors covered industry,power,and aviation are the same as in the EU ET

151、S,but we reduced the cap by 5%compared to the UKs notional share of the EU ETS cap.We started auctioning UK Allowances(UKAs)and trading began on the secondary market in May.We have been pleased to see the high level of interest in auctions and trading developing on the secondary market.In 2021,we is

152、sued around 127 million allow-ances through a combination of free allocation and auctions,with revenues from the latter reaching over GBP 4.5 billion(USD 6.2 billion)across the year.All but one of the auctions in 2021 fully cleared.Rules we put in place ensured one auction in October could still par

153、tially clear,with unsold allowances being success-fully released to the market before the end of the year.The end of the year provided another first when the cost containment mechanism(CCM)was triggered,after UKA prices on the secondary market exceeded the trigger price for three consecutive months.

154、The CCM,like in other schemes,is a rules-based market stability tool which allows for but does not require inter-vention to mitigate sustained high prices if the price triggers set in legislation are met.In the early years of the scheme,we have deliberately put in place lower and shorter price trigg

155、ers,giving us the opportunity to assess the functioning of the market sooner.Ultimately,the decision on both occasions was not to intervene in the market.These decisions were aimed at upholding the objectives of the UK ETS as a market-based approach to reducing emissions and incen-tivizing participa

156、nts to find the most cost-effective solutions to decarbonize.A well-functioning market is a priority for the UK and is an important factor in the success of emissions trading systems.We will continue to monitor the market closely and remain prepared to take timely and proportionate action,within the

157、 rules of the scheme,to support its effective functioning should the CCM be triggered again.We will also explore ways to increase liquidity.THE NET ZERO STRATEGY The UKs progress so far and comprehensive plan to complete the journey to net zero by 2050 are the context for our plans to develop the UK

158、 ETS.We have achieved a lot on our road to net zero already.Since 1990,the UK has almost halved its GHG emissions.Between 1990 and 2019,we grew our economy by 78%and cut our emissions by 44%,decarbonizing faster than any other G7 country.However,we know we need to move faster.The UKs Net Zero Strate

159、gy outlines measures to tran-sition the whole economy to a green and sustainable future,helping businesses and consumers to move to clean power,supporting hundreds of thousands of well-paid jobs,and leveraging up to GBP 90 billion(USD 124 billion)of private investment by 2030.It builds on the Prime

160、Ministers“Ten Point Plan”for a green industrial revolution published in 2020 and sets out Figure 1 UK vs Rest of G7 GDP and GHG EmissionsSource:UK Government“Net Zero Strategy:Build Back Greener”Page 4118Status Report 2022The UK ETS I CONTENTdecarbonization pathways to net zero by 2050,policies and

161、proposals to reduce emissions for each sector and cross-cutting action to support the transition.The Strategy sets a clear direction,supports invest-ment,and provides opportunities for businesses in new markets at home and abroad.It gives businesses and industry the certainty they need to invest,gro

162、w,and make UK home to new ambitious projects.It shows how government is working with them to bring down the costs of key technologies from electric vehi-cles to heat pumps and to give the UK a competitive edge.And,as its prominence in the core principles of the Strategy shows,it recognizes the role

163、of the UK ETS as a key lever on our path to net zero and sets out how we will approach the future growth of the scheme.WHATS NEXTWe want to continue to pursue greater climate ambi-tion and develop the scheme to enable the UK to meet our net-zero targets.The UK ETS Authority will consult in the comin

164、g months on a net zero consistent UK ETS cap,with the intention that any changes to the cap will be implemented by 2024 at the latest.This will set a clear trajectory and 1 Demos and Zero-Carbon Campaign polling both show strong support for carbon pricing as part of the UKs approach to net zero.send

165、 a strong signal on decarbonization for business to follow.We already initiated a Free Allocation Review by holding a call for evidence on free allocation in Spring 2021 and will continue the review by assessing how to appropriately mitigate the risk of carbon leakage while still preserving the ince

166、ntive to decarbonize.We will do so alongside the review of the cap to ensure any changes are made in a rounded and consistent way.The Net Zero Strategy reasserted our commitment to exploring expanding the UK ETS to other sectors.We will provide an update on our broader approach to this in due course

167、,but the Strategy put forward some specific areas we are looking to focus on.Furthermore,as part of the upcoming consultation and in partnership with the Devolved Administrations,we intend to launch a call for evidence in the coming months exploring the role of the UK ETS as a potential long-term ma

168、rket for GHG removals.As we develop the UK ETS,we will rely heavily on effec-tive collaboration.This principle is intrinsic to how the system is set up,with the scheme jointly run by the UK Government and Devolved Administrations.It also applies to our external presence.We will consult with those af

169、fected by any changes including scheme participants,as well as with experts and international counterparts.We are proud of our achievements in the UK on carbon pricing and are excited to support and work with other jurisdictions looking to establish or develop their carbon pricing policy.Equally,we

170、recog-nize that we have a lot to learn from the experience and innovations of others and we hugely value opportuni-ties to work with other schemes on shared issues and challenges.We can take confidence from polling that shows the UK public supports the“polluter pays”principle,1 and the focus and pos

171、itive outcomes on carbon markets achieved at COP 26.We also have a strong founda-tion to build on,a year on from the establishment of the scheme,and we look forward to seeing what the coming years have in store for emissions trading.Figure 2 Indicative delivery pathway to 2037 by sectorSource:UK Gov

172、ernment“Net Zero Strategy:Build Back Greener”Page 18,BEIS Analysis 202119The EUs plan to extend carbon pricing to maritime transportPractitioner Insights I CONTENTThe EUs plan to extend carbon pricing to maritime transportLast year marked the publication of the most comprehensive set of climate prop

173、osals ever in the EU.In mid-July 2021,the European Commission proposed the“Fit for 55”package,a set of legislative texts aiming to deliver the EUs 2030 climate objective reducing net GHG emissions by at least 55%compared to 1990 levels,a significant step up from the previous target of at least 40%.T

174、his policy package elaborates the framework for the“European Green Deal”,a strategy adopted in December 2019 that aims to transform the EU into a modern,resource-efficient,and competitive economy,and to achieve climate neutrality by 2050.A key aspect is to tackle emissions from transport.While the E

175、Us GHG emissions have decreased during recent years in areas such as industry and power generation thanks notably to the EUs carbon market they have increased in the transport sector(see Figure 1).This is why the“Fit for 55”package contains several proposals specifically targeting the aviation,road,

176、and maritime 1 European Environment Agency(EEA),European Maritime Transport Environmental Report 2021transport sectors.The latter is especially relevant,as emissions from maritime transport(see Figure 2)are both substantial(34%of the EUs total emissions and 13.4%of transport emissions)and are expect

177、ed to increase further in the future,driven by the growth of this transport mode and its current heavy reliance on oil derivatives.Absent any additional measures,the International Maritime Organization(IMO)projects that by 2050 annual global maritime emissions could rise by 50%,compared to 2018 leve

178、ls(see Figure 3),which would represent more than a doubling of annual emis-sions since 2008.1 Policy actions are urgently needed to reverse this curve.To ensure that maritime transport contributes to the EUs climate effort and to the Paris Agreement commit-ments,the Commission has proposed a range o

179、f measures to address GHG emissions from shipping in Europe,alongside continuing to push for global action at the IMO.In particular,the Commission proposes to Hans Bergman,European Commission DG CLIMAFigure 1 Greenhouse gas emissions by aggregated sectorSource:European Environment Agency“Greenhouse

180、gas emissions by aggregated sector”201920Status Report 2022The EUs plan to extend carbon pricing to maritime transport I CONTENTextend the EU ETS to shipping,2 building on the EUs MRV system for CO2 emissions from ships,which started in 2018.3 This proposal is now under scrutiny by the Council of th

181、e EU and the European Parliament and will hopefully be adopted by the end of 2022.The proposed extension of the EU ETS will have many benefits.First of all,the inclusion of maritime transport in the ETS will ensure it contributes to the EUs climate objectives,since emissions will be part of the over

182、all emissions cap,in line with the common level of ambition expected from the sum of all ETS sectors.Moreover,it will give shipping companies incentives to cut emissions where it is the most economical.By creating a price signal in line with the“polluter-pays”principle,it will make energy efficiency

183、 investments more financially attractive and will also reduce the cost differential between traditional and alternative fuels.Finally,full auctioning will raise revenues that can be used to support climate mitigation measures,fund research and innovation,and address social impacts.2 Proposal for a D

184、irective amending Directive 2003/87/EC establishing a system for greenhouse gas emission allowance trading within the Union,Decision(EU)2015/1814 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and Regulation(EU)2015/757(C

185、OM/2021/551 final)3 Regulation(EU)2015/7574 It will apply to European Economic Area(EEA)countries as well.Of course,extending the ETS does not come without challenges,and the proposal has been designed to mitigate these to the best extent possible.One challenge is to maximize the amount of GHG emiss

186、ions covered while limiting administrative costs.The proposed ETS extension therefore only covers transport ships larger than 5,000 gross tonnage,which are responsible for about 90%of CO2 emissions from the sector.These ships have already been reporting and verifying their CO2 emissions since 2018,i

187、n line with the MRV regulation referred to above.Another challenge is to avoid the risk of competitive distortion.To ensure an equal treatment and level playing field,the system will be flag-neutral.In total,around 1,600 shipping companies representing about 12,000 ships both EU and non-EU will have

188、 to purchase and surrender ETS allowances for each tonne of reported emissions.The system will be“route-based”and will cover emissions from all voyages within and between EU countries4 as well as 50%of the emissions from voyages starting or ending outside of the EU,leaving third countries to decide

189、how to appropriately address the emissions from the other half of the voyage.Balancing the need for quick action and the necessity to let stakeholders get used to the new system also presents a challenge.For a smooth transition,a phase-in period is proposed from 2023 to 2025,where regulated entities

190、 would only be obliged to surrender allowances for a portion of their reported emissions,gradually rising to 100%by 2026.Penalties and other enforcement measures including port access denials are foreseen to ensure compliance with the new rules.To ease administration,each shipping company will be as

191、sociated with an administering authority of an EU Member State.The ETS extension to maritime transport will certainly be a game-changer to reduce GHG emissions from shipping,but it cannot do the trick alone.To address the various technological,economic and regulatory Figure 2 EU(Convention)-Share of

192、 transport greenhouse gas emissionsSource:European Environment Agency“Share of transport greenhouse gas emissions”2019Other TransportationAviationRoad transportMaritimeRailways13.9%13.4%71.7%21The EUs plan to extend carbon pricing to maritime transportPractitioner Insights I CONTENTbarriers that cur

193、rently hinder the decarbonization of the sector,a range of different policy measures are proposed.Among these,the“FuelEU Maritime”5 initiative is designed to boost demand for clean fuels by setting maximum limits reduced every five years on the GHG content of energy used by ships,and by encouraging

194、zero-emissions technologies at berth.With regard to fuel distribution,the proposed“Regulation on Alternative Fuels Infrastructure(AFIR)”6 will set,among other things,mandatory targets for shore-side electricity at main ports.On the supply side,the revision of the“Renewable Energy Directive(RED)”7 sh

195、ould increase the current EU-level of 32%of renewable energy sources in the overall energy mix to at least 40%by 2030,with a special focus on the transport sector.This basket of measures should greatly help the uptake of renewable and low-carbon fuels and breakthrough technologies.Finally,action at

196、the international level is also crucial to fully embrace a green and global transition in maritime shipping.The Commission is fully committed to continue supporting ambitious progress under the framework of the IMO,especially as mid-and long-term measures including market-based mechanisms come under

197、 discussion.From every angle and at all levels,in the maritime sector and all others,the EU is firmly committed to decarbonizing its economy with efficiency,ambition,and overall coherence.The year 2022 will certainly be decisive in that respect.5 Proposal for a Regulation on the use of renewable and

198、 low-carbon fuels in maritime transport and amending Directive 2009/16/EC(COM/2021/562 final)6 Proposal for a Regulation on the deployment of alternative fuels infrastructure,and repealing Directive 2014/94/EU of the European Parliament and of the Council(COM/2021/559 final)7 Proposal for a Directiv

199、e amending Directive(EU)2018/2001 of the European Parliament and of the Council,Regulation(EU)2018/1999 of the European Parliament and of the Council and Directive 98/70/EC of the European Parliament and of the Council as regards the promotion of energy from renewable sources,and repealing Council D

200、irective(EU)2015/652(COM/2021/557 final)Figure 3 Projections of maritime ship emissions as a percentage of 2008 emissionsSource:Fourth IMO GHG Study 202022Status Report 2022Carbon dioxide removals in reaching net zero I CONTENT2021 saw considerable momentum behind increased climate ambition,but ther

201、e remains a large gap between announced targets and implemented actions.In the last few years,many countries have put forward new or updated medium-term targets,including 140 NDCs,and long-term targets,such as the 59 net-zero emission targets and 47 long-term low-emissions development strategies(LT-

202、LEDS).The ambition level of these goals was unimaginable even a few years ago.If met in full and on time,recent IEA analysis suggests these climate pledges could hold the rise in global temperature to 1.8 C by 2100.1 Setting an ambitious goal is a necessary starting point but devising workable strat

203、egies and implementing effective policies is more important.Many countries are now turning to the task of translating their net-zero targets into near-term policies and plans,including by assessing the role of emission removals and the use of markets.2Emission removals will play a critical role in r

204、eaching global net-zero emissions.All of the IEA scenarios that limit global warming to 1.5 C include the use of carbon dioxide removal(CDR)approaches.3 CDR refers to capturing CO2 from the atmosphere,and permanently storing it.The balance between emission reductions and removals,and the level of re

205、liance on CDR,varies by scenario.Nevertheless,removals are not an alternative to deep mitigation,but a means of achieving net-zero emissions.A portfolio of CDR approaches will also likely be needed,which can encompass the following:a.Technology-based CDR options include direct air carbon capture and

206、 storage(DACCS),and bioenergy with carbon capture and storage(BECCS),which involves the capture and permanent storage of CO2 from processes where biomass is converted to energy.b.Nature-based solutions depend on ecosystems to capture carbon,and typically include afforestation and reforestation(i.e.,

207、repurposing land-use by growing forests),and other forms of ecosystem restoration such as the enhancement of wetlands and soils.1 https:/www.iea.org/commentaries/cop26-climate-pledges-could-help-limit-global-warming-to-1-8-c-but-implementing-them-will-be-the-key2 https:/www.oecd-ilibrary.org/environ

208、ment/understanding-countries-net-zero-emissions-targets_8d25a20c-en3 Ibid,and https:/www.iea.org/reports/net-zero-by-20504 Ibid5 Ibid.Note:the IEA Global Energy Sector Roadmap to Net Zero by 2050 only covers the energy sector and only relies on technology-based carbon removals.6 https:/www.iea.org/c

209、ommentaries/a-closer-look-at-the-modelling-behind-our-global-roadmap-to-net-zero-emissions-by-20507 https:/ involving enhanced natural processes include enhanced weathering(artificially accelerating the natural process whereby acid rain dissolves minerals that then react with CO2 to form carbonates)

210、,land-based approaches(such as biochar),and ocean-based approaches(such as ocean fertilization or alkalinization).Nature-based solutions are considerably less expensive today but more prone to the risk of non-permanence of stored emissions;their vulnerability to fires,pests,diseases,and forestry pol

211、icy changes could lead to reversals of CO2 stored.Furthermore,their dependence on land can create complex challenges at scale,with carbon storage potentially conflicting with food production,biodiversity,and local development objectives.Technology-based CDR options are currently costly but could byp

212、ass many of these challenges,potentially retaining CO2 for centuries in appropriately selected and managed geological storage sites.4 However,the enhanced weathering and ocean-based approaches here mentioned require further research to understand their potential for carbon removals as well as their

213、costs,risks,and trade-offs.A rapid scale-up of technology-based CDR approaches is needed to reach global net-zero by 2050.Although the IEA Net Zero by 2050 Roadmap5 deploys a limited amount of technology-based CDR compared to IPCC 1.5 scenarios6,this entails a significant scale-up of BECCS and DACCS

214、 relative to today,reaching 1.9 GtCO2 in 2050(see Figures 1 and 2).Currently,around 2.5 MtCO2 is captured annually from the 13 BECC plants(for CO2 use and storage)and 19 DAC plants in operation globally.Achieving the level of deployment in the Net Zero Scenario will require further large-scale demon

215、strations to refine technologies,reduce capture costs,and better understand the scale and removal potential of these approaches.Resources constraints and social acceptance,including of geological CO2 storage,could limit the scale-up of technology-based CDR approaches7.Addressing Carbon dioxide remov

216、als in reaching net zero The role of carbon markets Luca Lo Re,Sara Budinis,and Tom Howes International Energy Agency(IEA)23Carbon dioxide removals in reaching net zero Practitioner Insights I CONTENThigh upfront investment costs(for BECCS)and energy needs(for DACCS)would require new business models

217、 and policy support to allow large scale deployment for certain regions,while any potential environmental impacts of CDR approaches would need to be carefully managed.Moreover,carbon accounting frameworks for CDR will need to consider potential CO2 storage reversal.Relying on geological CO2 storage

218、provides high confidence in both the permanence of the storage and quantification of CO2 removed.With new certification and methodologies,carbon markets could support the scale up of technology-based CDR approaches.Allowing the use of emission removal units in domestic and international carbon marke

219、ts could generate financial flows and create demand for carbon removal services,spurring investment in CDR.8 In domestic markets,experience with removals is so far limited to nature-based solutions,most typically forest-based offsets generated under strict methodologies.9 This is the case in existin

220、g markets,such as Chinas GHG voluntary emission reduction program10,Californias compliance offsets program11,and New Zealands unique coverage of the forestry sector under the countrys ETS12.The inclusion of technology-based CDR approaches and removal units in domestic carbon markets is not trivial i

221、t is both untested and faces considerable economic,legal and policy design challenges.These include how technology-based CDRs can be inte-grated into an ETS,how they relate to an ETS cap,to the allocation of free allowances,to a possible carbon border adjustment,and how to import or export CDR credi

222、ts in linked ETS are all areas that require further research.13 For instance,currently the EU ETS considers the combustion of biomass to be“carbon neutral”14;as such,there is no incentive or recognition for the emitted CO2 to be stored through BECCS.Moreover,as a recent ICAP paper has shown15,in the

223、 context of net zero,ETS caps might fall to zero emissions or even become negative,which would entail an obligation for 8 Ibid9 https:/ https:/www.edf.org/climate/status-chinas-voluntary-carbon-market11 https:/ww2.arb.ca.gov/our-work/programs/compliance-offset-program12 https:/www.mpi.govt.nz/forest

224、ry/forestry-in-the-emissions-trading-scheme/13 https:/www.frontiersin.org/articles/10.3389/fclim.2021.690023/full14 https:/www.emissions- https:/ 1:World energy-related CO2 emissions and removal across the energy system in the IEA Net-Zero Emissions by 2050 Scenario,20202050.Figure 2:Technology-base

225、d removals across the energy system in the IEA Net-Zero Emissions by 2050 Scenario,20202050Unabated CO2 emissionsBECCSDACCSNet emissions202020302040205035,00030,00025,00020,00015,00010,0005,000-5,0000MtCO2BECCSDACCS20202030204020502,0001,5001,0005000MtCO224Status Report 2022Carbon dioxide removals i

226、n reaching net zero I CONTENTcovered entities to purchase and surrender removal units.The implications of this in terms of carbon leakage and competitiveness concerns would require further exploration.16 The experience in crediting technology-based CDR approaches in international carbon markets,incl

227、uding through Article 6 of the Paris Agreement,is still limited and new crediting methodologies are needed.For example,IPCC emissions reporting guidelines for national inventories cover BECCS but not yet DAC.17 The crediting from DAC could benefit from simplified baseline methodologies since the MRV

228、 of removed emissions is more straightforward and transparent compared to the methodologies for projects using counterfactual baselines.Carbon markets could provide incentives,but additional policies are needed to scale up technology-based CDR approaches.While some recent developments,such as the EU

229、 proposal on carbon removal certification18,are a good first step towards possible voluntary markets for CDR credits,carbon markets alone are likely not sufficient to provide the incentives needed to bring CDR approaches at scale.Markets need to be complemented by other forms of policy support,espec

230、ially if the long-term carbon price signal is unclear.This support could be framework policies and targeted support that aims to:(i)foster innovation;(ii)push early deployment;and(iii)co-operate internationally.Some recently launched initiatives aim at addressing these issues,including Mission Innov

231、ations“CDR Mission”19,the US“Carbon Negative Shot”20 and support for DAC hubs in the US.21 16 Ibid17 https:/www.ipcc.ch/report/2019-refinement-to-the-2006-ipcc-guidelines-for-national-greenhouse-gas-inventories/18 https:/www.europarl.europa.eu/legislative-train/theme-a-european-green-deal/file-carbo

232、n-removal-certification19 http:/mission- https:/www.energy.gov/articles/secretary-granholm-launches-carbon-negative-earthshots-remove-gigatons-carbon-pollution21 https:/www.iea.org/reports/direct-air-capture25The Carbon Pricing in the Americas PlatformPractitioner Insights I CONTENTThe Carbon Pricin

233、g in the Americas PlatformFinding a path to mitigation across continentsWith 2021 ending on a high note for the Carbon Pricing in the Americas(CPA)platform,we,the co-chairs,are very excited to enter 2022 with a clear signal that interest in carbon pricing is alive and strong in the Americas.This sig

234、nal is coming from a good mix of national and sub-national governments located in all regions of our continent;this diversity in our membership has indeed been recognized as one of our strengths.We are confident that the appeal of the CPA can encourage more governments to join our ranks in the futur

235、e,and we hope to expand our network this year.The mission of the CPA platform remains the same:to foster a dialogue and share information,experiences,expertise,and best practices among governments that have already put a price on carbon,are in the processing of implementing one,or are exploring the

236、possibility of doing so.We encourage the convergence of carbon pricing policies that are both cost-effective and efficient,in terms of design and GHG emission reductions.A NEW CPA DECLARATION IN 2021Since the unveiling of the first CPA Declaration in Paris in December 2017,the CPA platform has under

237、taken a range of tasks in pursuit of our mission.Our efforts are driven by our members and partners,so an important step was to understand their diverse views and interests on carbon pricing.To this end,we have organized webinars and polled our members and partners to better understand their needs a

238、nd priorities with regards to the development and implementation of carbon pricing instruments.Our members have expressed interest in a broad range of topics in the realm of carbon pricing,ranging from the choice of the best carbon pricing instrument to policy design and infrastructure,approaches to

239、 implementation and operation,revenue use and distributional impacts,MRV,benchmarking and linking of carbon pricing instruments,stakeholder consultation and acceptability,as well as competitiveness and carbon leakage issues.It is our common view that more work needs to be done to promote and support

240、 carbon pricing and markets in the Americas,to stimulate the alignment of carbon pricing systems and maximize climate action,while ensuring real progress on reducing emissions.As the CPA platform offers a space where governments of the Americas can showcase what they are doing while receiving feedba

241、ck from their peers,and where members and partners can build relations based on converging interests,we believe it can play a significant role in that endeavour.In 2021,CPA members and partners agreed that it would be pertinent to update the 2017 Declaration to reflect the changes that the world was

242、 experiencing,from the overall rise in climate ambition to the COVID-19 pandemic and its trail of green recovery packages.We also recognized that a fresh declaration would present a good opportunity to reach out to potential new members in the Americas.With this background,the CPA platform convened

243、a side event at the IETA Business Hub during COP 26 to unveil the“Glasgow Declaration on Carbon Pricing in the Americas”.It was a great success,and we were very pleased to welcome the following new members:Dominican Republic,Jalisco,Panama,Paraguay,Quertaro,and Yucatn.We should mention that this lis

244、t is in no way closed we invite interested governments to endorse the Declaration and join our ranks as members of the platform.The Glasgow Declaration asserts,among other things,our collective intentions to strive towards carbon neutrality by 2050 or before,to facilitate a just transition,and to em

245、phasize the importance of voluntary international cooperation in carbon markets,including through Article 6 of the Paris Agreement.The endorsers also declare their commitment to pursue the implementation of carbon pricing as a central policy instrument for climate action,including in public investme

246、nt decisions and as a key component of a green recovery from the COVID-19 pandemic,and to regularly raise the carbon price to better reflect the social cost of carbon.They further commit to continuing their regional cooperation efforts under the CPA with a view to aligning carbon instruments.By the

247、Co-chairs:Juan Pedro Searle,Chile Jean-Yves Benoit,Qubec26Status Report 2022The Carbon Pricing in the Americas Platform I CONTENTLOOKING AHEAD AT 2022 AND BEYONDAs co-chairs of the CPA,we also believe it would be useful to examine potential synergies and opportunities for coordination with other car

248、bon pricing initiatives and forums that are active in the Americas.There is great potential to harness the pool of knowledge and capacities already available,encourage further networking,enable information sharing,and avoid duplication.Gathering these forces could enhance efficiency to fight climate

249、 change in the Americas and we are committed to exploring that avenue along with our members and partners.We are hopeful that there is enough commitment in the Americas to rise to the challenge of fighting climate change and that there is enough vision in this part of the world to use the right tool

250、s to do so successfully.Carbon pricing instruments are among the tools that have proven to be efficient in reducing GHG emissions.It is important that ever more governments learn about them,choose the right one for their circumstances,and stay on the lookout for the chance to align these policies ac

251、ross the Americas so that,together,we may all adopt a successful comprehensive approach to fighting climate change.The Carbon Pricing in the Americas platform was born after the launch of the“Paris Declaration on Carbon Pricing in the Americas”in 2017.By endorsing the Glasgow Declaration four years

252、later,member governments of the CPA platform reaffirmed their support of the Paris Agreement and advocated for the scaling up of the climate action in the Americas,notably by highlighting the importance of carbon pricing mechanisms as effective instruments to reduce GHG emissions and committed to wo

253、rk towards the alignment of carbon pricing policies in the region.The endorsers also acknowledge that the alignment of these policies across the Americas can provide a variety of co-benefits,including more efficient emission reductions,improved market liquidity,and reduced competitiveness concerns.T

254、he current endorsers of the Glasgow Declaration on Carbon Pricing in the Americas and members of the CPA platform are:British Columbia,California Air Resources Board on behalf of the State of California,Canada,Chile,Dominican Republic,Jalisco,Nova Scotia,Panama,Paraguay,Qubec,Sonora,and Yucatan.The

255、CPA platform can also count on the support of the following partner organizations:Carbon Trust,Center for Clean Air Policy,Conservation International,ECLAC,EDF,ICAP,IETA,UNEP,the World Bank,and the UNFCCC secretariat.Jean-Yves BenoitJuan Pedro Searle27Charting the course to carbon neutrality for all

256、 CaliforniansPractitioner Insights I CONTENTCharting the course to carbon neutrality for all CaliforniansRachel Gold,California Air Resource BoardIn recent years,smoke from the most destructive wildfires on record has cloaked California.Families in the fire zones have hastily evacuated and schools f

257、aced closures as teachers and children struggled to breathe in and outside of their classrooms.Downwind of these wildfires and in search of clean air,some have headed to safer areas,aware that others lacked the resources to do the same.Californias horrifying fire season in 2017,with 47 deaths and 1.

258、5 million acres burned across the state,1 is now a moderate year compared to the devasting wildfires,extreme drought,and flooding that are the new normal.Climate change-fueled natural disasters are exacerbating existing disparities in our communities,where families without the means to adapt bear ev

259、en greater health and economic burdens.It is in this context,with climate disasters dispropor-tionally impacting communities heavily burdened by pollution from multiple sources and most vulnerable to its effects,that California has set a goal for statewide carbon neutrality by 2045 a goal in line wi

260、th what science says is needed to limit global warming to 1.5 C.Meeting this goal requires transformational change.It entails driving down emissions from all sources in our GHG inventory,drastically reducing or eliminating fossil fuels burned,and converting our natural and working lands from a sourc

261、e of emissions to a sink.In guiding this change,California continues to focus on designing its portfolio of climate change programs to advance equity and environmental justice.California met its 2020 GHG reduction target2 four years early.Now,through its Scoping Plan Update process,the California Ai

262、r Resources Board(CARB)is assessing progress on achieving the faster and deeper reductions needed to meet our 2030 target3 as we lay out the path to carbon neutrality in 2045.The update occurs every five years,4 and this current 2022 Scoping Plan Update5 is focused on identifying both the endpoints

263、for our transition to carbon neutrality and the near-term actions necessary to bring air quality benefits to the most burdened communities,while also providing long-term GHG reductions.1 Cal Fire 2017 Incident Archive2 Return to Californias 1990 level of GHG emissions.3 For a 40%reduction in emissio

264、ns compared with 1990 levels by 2030.4 As per Assembly Bill 32.5 See AB 32 Climate Change Scoping Plan|California Air Resources Board for more information.6 See About California Climate Investments for more information.7 Summary of Auction Proceeds to California and Consigning EntitiesCentral among

265、Californias suite of climate policies is the Cap-and-Trade Program.To date,by design,Californias ETS has tackled the least-cost emissions reductions first.By doing so,we are establishing clear long-term investment signals,allowing time to incorporate technological advances,and reinvesting billions o

266、f dollars in auction proceeds to further GHG reductions throughout the state,with a focus on supporting disadvantaged communities.This approach has laid the groundwork for the more difficult reductions ahead.In line with this challenge,CARB has already doubled the stringency of the cap from the 2013

267、2020 period into this new decade,increasing the rate of cap decline from 2%to approximately 4%per year.Critical to Californias approach are design features in the ETS and complementary measures that provide support for heavily burdened communities.A central strategy is reinvesting state-owned ETS au

268、ction proceeds to benefit these communities while simultaneously reducing GHGs.The California Legislature determines the appropriation of state-owned auction proceeds pursuant to statutory requirements that investments achieve emissions reductions and be directed towards the most disadvantaged commu

269、nities,alongside certain continuous appropriations,and annual budget priorities.6 Thus far,Californias ETS auctions have generated over USD 18 billion,7 the majority of which is being directed to individuals and communities most in need of assis-tance.This emphasis on investing in burdened commu-nit

270、ies is essential as we strive to ensure our climate Critical to Californias approach are design features in the ETS and complementary measures that provide support for heavily burdened communities.28Status Report 2022Charting the course to carbon neutrality for all Californians I CONTENTpolicies sup

271、port a just transition.These funds are being used to help individuals and local governments purchase zero-emission vehicles,increase access to affordable and energy-efficient housing,assist farmers with purchasing cleaner equipment,and increase alter-native mobility options,among other actions.8Anot

272、her example of reinvesting auction proceeds is the Transformative Climate Communities program,which empowers communities with high levels of poverty and pollution to set their own goals and develop strat-egies to address air pollution and reduce GHGs in their neighborhoods.So far,this program has re

273、sulted in the development of sustainable affordable housing,local renewable energy,increased transit services,urban greening,bicycle sharing programs,and other local initiatives.9California has also implemented a unique approach to protecting consumers from the energy cost increases associated with

274、its ETS.Allowances are freely allocated to electric and natural gas utilities,which then must sell a portion of the allowances at auctions and return the proceeds to consumers through flat,lump-sum credits on electricity and natural gas bills.While the increased 8 See California Climate Investments9

275、 More information is available at:California Strategic Growth Council,Transformative Climate Communities.10 See summaries for Electrical Distribution Utility and Natural Gas Supplier Use of Allocated Allowance Value at:11 Local air districts are government bodies responsible for regional air quality

276、 planning,monitoring,and stationary source and facility permitting.California has 35 local air districts.12 Community Air Protection Programenergy costs incentivize conservation and efficiency,the flat credits provide relief from the cost increases.This approach is also an important mechanism to ens

277、ure the protection of lower-income consumers from cost increases.The flat credits are paired with public messaging encouraging residents to reduce energy usage and are complemented by Californias robust energy efficiency programs.Through 2020,Cali-fornia residents have received nearly USD 6 billion

278、in credits since the beginning of the program,easing their financial burden associated with achieving our climate goals.10Californias ETS works in concert with a range of complementary measures that protect communities from exposure to air pollution and support the transi-tion to carbon neutrality,i

279、ncluding the direct regulation of stationary sources by local air districts11,emissions standards for vehicles,incentives for electric vehicles,and the Community Air Protection Program.Estab-lished in 2017,the Community Air Protection Program develops community-focused actions to reduce air pollutio

280、n and improve public health in the most impacted communities.12 Through this program,CARB partners with local communities to identify pollutant 29Charting the course to carbon neutrality for all CaliforniansPractitioner Insights I CONTENTsources of concern and develop strategies to reduce exposure o

281、r address the underlying causes of pollution.Each year,this program expands to additional commu-nities throughout the state,applying lessons learned from its community-centered approach.As we assess Californias suite of climate programs through the 2022 Scoping Plan Update,it is of central importanc

282、e to ensure that these programs continue to protect public health and support opportunities in heavily burdened communities.Our priority is to minimize fossil fuel combustion,which is the primary driver of both climate change and public health prob-lems related to poor air quality.For many applicati

283、ons,alternatives to fossil fuel combustion already exist,and the Scoping Plan Update process is the platform for all Californians to publicly discuss where,when,and how the change to alternatives should happen.To develop policies that are effective,inclusive,and equitable,it is vital we engage with

284、a diverse set of stakeholders.While California has a robust and exten-sive public consultation process,we recognized the need to do more to engage with communities that face high barriers to engagement in these processes.Fully incorporating inclusivity and equity into climate change policy design ha

285、s required us to develop new levels of engagement and coordination with commu-nities,local government,academics,industry,and other agencies.CARB recently expanded its leadership focus on these issues with an executive-level officer for environmental justice,who is dedicated to incorpo-rating environ

286、mental justice into policies and building meaningful relationships with community organiza-tions and leaders.Climate change has already changed California,from the basic need to evacuate due to wildfires to the extreme droughts that are leaving some communities without water.These changes contribute

287、 to the urgency of our collective work to tackle the more difficult GHG reductions ahead and support climate adaptation in a manner that is equitable,effective,and supports resil-ience in our communities.To develop policies that are effective,inclusive,and equitable,it is vital we engage with a dive

288、rse set of stakeholders.31Charting the course to carbon neutrality for all Californians2 Infographics I CONTENTInfographics32Status Report 2022 CONTENTFrom Supranational to LocalEmissions trading systems operate at every level of governmentThis infographic demonstrates the diversity and complexity t

289、hat exists with respect to the level of government at which emissions trading can be implemented.At one end of the spectrum,the EU ETS oper-ates supranationally in all EU Member States plus Iceland,Liechten-stein,and Norway.At the other end,city-level ETSs are in operation,for example,in Shenzhen an

290、d Tokyo.Multiple ETSs may be in force in countries like Germany,where some emissions are covered by the EU ETS and others by the German National ETS.Similarly,the China National ETS currently covers power sector emissions while other province-and city-level ETS pilots regulate emissions from a varie

291、ty of sectors.In North America,many provincial or state-level ETSs exist,with some linked domestically or internationally.In the rest of ICAP Status Report 2022 you can find a wealth of information about these individual systems that are already in force as well as many others that are under develop

292、ment or consideration.1 SupranationalEU Member States+Iceland+Liechtenstein+Norway8 CountriesChinaGermanyKazakhstan MexicoNew ZealandRepublic of KoreaSwitzerlandUnited Kingdom6 CitiesBeijing*Chongqing*Shanghai*ShenzhenTianjin*Tokyo19 Provinces&StatesCalifornia Connecticut Delaware FujianGuangdongHub

293、eiMaine Maryland Massachusetts New HampshireNew JerseyNew YorkNova ScotiaOregon Qubec Rhode IslandSaitama PrefectureVermontVirginia*Beijing,Chongqing,Shanghai and Tianjin are provincial-level municipalities in the Chinese administrative system.33From Supranational to Local2 Infographics I CONTENT13A

294、LMOST 1/3 OF THE GLOBAL POPULATION LIVES UNDER AN ETS IN FORCE55%JURISDICTIONS MAKING UP 55%OF GLOBAL GDP ARE USING EMISSIONS TRADINGOF GLOBAL GHG EMISSIONS ARE COVERED BY AN ETS17%34Status Report 2022 CONTENTEmissions Trading WorldwideThe state of play of cap-and-trade in 2022In forceUnder developm

295、entUnder considerationEstablished a new Climate Protection Program including an ETS for fuel suppliers.The systems first compliance period is 202224.Several important program changes were introduced:the introduc-tion of a price ceiling with two price containment reserve tiers below it;reductions in

296、the use of offset credits;and a steeper allowance cap decline through 2030.Mexican ETS Pilot ProgramOregon Cap-and-Trade ProgramWashingtonCalifornia Cap-and-Trade ProgramRegional Greenhouse Gas Initiative(RGGI)An ECR began operation in 2021.Pennsylvania released the final regulation to establish an

297、ETS and to join RGGI.Connecticut Delaware Maine Maryland Massachusetts New Hampshire New Jersey New York Rhode Island Vermont VirginiaMassachusetts Limits on Emissions from Electricity GenerationNew MexicoNew York CityNorth CarolinaQubecCap-and-Trade SystemTransportation and Climate Initiative(TCI-P

298、)Nova ScotiaCap-and-Trade ProgramBegan its fourth compliance period covering 20212023.New rules include amended price tiers for reserve allowances and reformed eligibility requirements for offset projects.BrazilChileColombia35Emissions Trading Worldwide2 Infographics I CONTENTThe ICAP ETS world map

299、depicts emissions trading systems currently in force,under development or under consideration.As of January 2022,there are 25 ETSs in force.Another seven are under develop-ment and expected to be in operation in the next few years.These include ETSs in Colombia,Indonesia,and Vietnam.15 jurisdictions

300、 including Brazil,Finland,and Japan are also considering the role an ETS can play in their climate change policy mix.If a jurisdiction has multiple systems in force,it is depicted in blue,with the borders of the jurisdiction representing the layered systems(e.g.Germany and Guangdong).If,however,the

301、jurisdiction has a system in force but is also considering an additional system,it is depicted in blue but also features a(light)green border(e.g.Finland).There is currently no jurisdiction with both an ETS in force and another system under development.UK ETSFinlandSuccessfully completed its first y

302、ear of operation with active trading in primary and secondary markets.German National ETSUkraineThe Fit for 55 package released in July 2021 proposed adjustments to the cap,the MSR,and benchmarks;the inclusion of the maritime sector;a carbon border adjustment mechanism;and a separate fuel ETS for bu

303、ildings and transport.EU Member States Iceland Liechtenstein NorwayEU ETSEU Fuel ETSTurkeyKazakhstan ETSMontenegroSwitzerland ETS Beijing Chongqing Fujian Guangdong Hubei Shanghai Shenzhen TianjinChinese PilotsIndonesiaThailandVietnamPhilippinesMalaysiaTaiwan(China)PakistanRepublic of Korea ETSJapan

304、Sakhalin(Russia)Tokyo Cap-and-Trade ProgramSaitama ETSNew Zealand ETSMajor reforms established a cap on unit supply and introduced auctioning.The fixed price option was replaced with a cost containment reserve.China National ETSTrading of allowances in the secondary market started in July 2021.The f

305、irst compliance period,covering 201920,was successfully concluded with a high compliance rate.36Status Report 2022 CONTENT2005200620072008200920013*Beijing,Guangdong,Shanghai,Shenzhen,Tianjin*RGGI includes New Jersey(as of 2020)and Virginia(as of 2021).3 GtCO2e0 GtCO2e6 GtCO2e9 GtCO2e+RGG

306、I*+New Zealand+EU ETS+Switzerland+California+Qubec+Kazakhstan+Chinese Pilots*+Tokyo+Saitama5%of global GHG emissionsGlobal Expansion of ETSThe share of global GHG emissions under an ETS tripled since 2005The graphic depicts the worldwide growth of emissions trading over time.Systems are spreading ar

307、ound the world.With a new addition this year in Oregon,the share of global GHG emissions covered by emissions trading has reached 17%,more than triple the amount when the EU ETS was launched in 2005.Changes over time are driven by the addition of new sectors and systems,as well as by the counter-act

308、ing trends of declining caps in many systems and growing global emissions.See“Notes on Methods and Sources”for further details.37Global Expansion of ETS2 Infographics I CONTENT20002020212022+Chongqing+Hubei(as new Chinese Pilots)+Fujian(as a new Chinese Pilot)+Republic of Korea

309、+Ontario+Mexico+China National ETS*+Germany+UK*+Oregon Ontario +China National ETS+Nova Scotia*The Chinese National ETS came into force in 2021 but has retroactive compliance obligations in 2019 and 2020,indicated above by the striped bar17%of global GHG emissions*In 2021,the UK launched its own ETS

310、 which required an adjustment in the EU ETS cap.38Status Report 2022 CONTENTSector CoverageSectors covered by emissions trading across systemsThe graphic shows sectors(types of economic activity)covered by an ETS in force in 2021.Systems are listed clockwise alphabeti-cally,with the numbers in the o

311、utermost ring indicating the share of aggregate emissions covered by the system.Upstream coverage in a sector is indicated with an arrow.Sectors are considered covered when at least some entities in the sector have explicit compliance obligations.Typically,not all facilities in the sector are regula

312、ted because of limits like inclusion thresholds.In addition,not all gases or processes of a given sector are covered.The jurisdictions respec-tive factsheets provide more information on system coverage.Note in particular that the coverage figures in the ETSs in China and for RGGI reflect CO2 emissio

313、ns only.The graphic includes only sectors which are covered by at least one ETS.See“Notes on Methods and Sources”for further details.ForestryWasteDomestic AviationTransportBuildingsIndustryPower44%41%74%CHINA NATIONAL ETS*CHINESE PILOTSCALIFORNIAFujian,Guangdong,Shanghai,TianjinBeijing,Shanghai,Shen

314、zhenBeijing,Shanghai,Shenzhenindicates which sector represents upstream coverage*Coverage numbers reflects CO2 emissions only40%39%46%8%20%28%40%49%85%43%78%73%10%GERMANYEU ETSKAZAKHSTANMASSACHUSETTSMEXICOQUBECNOVA SCOTIANEWZEALANDOREGONREPUBLIC OF KOREARGGI*SWITZERLANDTOKYO&SAITAMAUNITED KINGDOMEmi

315、ssion coverage Sectorscovered16%39Auctioning Revenue2 Infographics I CONTENTAllowance auctions generate revenue that can be used in areas reflecting jurisdictional priorities.Jurisdictions have tended to use auction revenues to fund climate programs,including on energy efficiency,low-carbon transpor

316、t,and clean and renewable energy.Revenues have also been used to support energy-intensive industries,as well as to assist disadvantaged and low-income groups.The amount of revenue collected depends on the jurisdictions size,ETS coverage,share of auctioned allowances and allowance prices.By the end o

317、f 2021,systems worldwide raised over USD 161 billion cumulatively.See“Notes on Methods and Sources”for further details.Auctioning RevenueEmissions trading as an additional source of government revenue$161billion since 2008totalNova Scotia$57million since 2020Chinese Pilots$255million since 2013Massa

318、chusetts$71million since 2018New Zealand$937million since 2021Germany$8,497million since 2021UK$5,928million since 20219Korea210.4257.7199.4$668million since 20019EU ETS21,881.536,734.416,389.6$117,554million since 20019RGGI416.3926.2284.0$4,702million since 20082021

319、20202019California1,699.33,992.43,065.3$18,230million since 20019Qubec521.2902.2727.7$4,387million since 20019Switzerland8.319.28.6$64million since 2014Energy efficiencyClean/Renewable energyDirect assistance to industry and low-income communitiesGHG reduction programsLow-carbo

320、n innovationInnovation in CCSGeneral budgetPublic/Low-carbon transport40Status Report 2022 CONTENT40%0%29.6100%CoverageAllowance price in USDAuction shareOffset useGERMANYCoverageAllowance price in USDAuction shareOffset useNEW ZEALAND49%0%36.056%39%0%62.657%EU ETSCoverageAllowance price in USDAucti

321、on shareOffset use28%0%70.753%CoverageAllowance price in USDAuction shareOffset useUKDifferent Shapes of ETSA comparative look at key metrics in selected systemsThe axes on each graph correspond to a specific metric.Coverage shows the share of the jurisdictions GHG emissions covered under the ETS,ex

322、cept in China and RGGI where it represents CO2 emissions only.Allowance price is the average auction settlement price,except in China where it is the average secondary market price.It is measured in USD per metric tonne of CO2e and averaged over 2021.Auction share,expressed as a share of the cap,den

323、otes the share of allowances that were auctioned and generated revenues for the jurisdictions government.Offset use indicates the share of a compliance entitys obligations that can be met using approved offsets.To aid comparison,the axes share the same scale across graphs.See“Notes on Methods and So

324、urces”for further details.CoverageAllowance price in USDAuction shareOffset use10%0%57.16%SWITZERLAND41Different Shapes of ETS2 Infographics I CONTENT67%8%22.478%CoverageAllowance price in USDAuction shareOffset useQUBECCoverageAllowance price in USDAuction shareOffset use73%5%23.14%REPUBLIC OF KORE

325、A37%4%22.474%CoverageAllowance price in USDAuction shareOffset useCALIFORNIACoverageShare of jurisdiction emissions covered by the ETS(0100%)Allowance priceAverage USD price over 2021 per tonne of CO2e(USD 080)Auction shareShare of allowances not allocated for free(0100%)Offset useShare of complianc

326、e obligations which can be met using offsets(010%)CoverageAllowance price in USDAuction shareOffset use44%5%7.20%CHINACoverageAllowance price in USDAuction shareOffset use100%3.3%10.616%RGGI42Status Report 2022 CONTENTNet-Zero Targets and ETSETS as an important policy instrument for the net-zero tra

327、nsitionAround the world an increasing number of jurisdictions,representing an ever-greater share of global GHG emissions,are adopting mid-century net-zero emissions targets to limit global warming.Emissions trading is an important component of the climate policy portfolios aimed at achieving these t

328、argets.This infographic combines ETS-covered emissions data from ICAP Secretariat with data from on the status of country-level net-zero target adoption and GHG emissions.It shows the change in target adoption status across three categories(in law;under development/discussion;no net-zero target)and

329、the extent to which jurisdictions rely on emissions trading to deliver these targets(shaded area within each category representing the share of emissions covered by an ETS currently in force at the subnational,national or supranational level).See“Notes on Methods and Sources”for further details.In l

330、awUnder development/discussionNo net-zero targetGHG emissions by net-zero-target status in MtCO2eETS-covered emissions in%4,937 MtCO2e36,561 MtCO2e5,840 MtCO2e37%17%7%202135%2020525 MtCO2e23,956 MtCO2e22,857 MtCO2e34%1%Share of ETS-covered emissions within target-status category43Allowance Price Dev

331、elopments2 Infographics I CONTENTAllowance Price Developments2021 in a longer historical contextThis infographic uses data from the ICAP Allowance Price Explorer to visualize developments allowance markets in 2021(top panel)and in a long historical context since 2008(bottom panel).Both the short-and

332、 long-term price developments are driven by changes in current and expected future scarcity of allowances,due to variations in general economic conditions,revisions to the rules of the systems(including those governing offsets and market stability mechanisms),and inter-actions with other climate and

333、 energy policies.Prices in the top panel are the daily observations in the systems with secondary market data,and the clearing prices in the systems with primary market data on the day of the auction/sale.In the bottom panel,daily observations are averaged over the calendar month.In both panels,observations in non-USD currencies are converted to USD using monthly exchange rate data from the IMF.Th