US PRESIDENT Joe Biden’s Leaders Summit last week revealed that climate action ambition is increasing and the timeframes for taking strong action are shortening, states the quarterly International Carbon Markets Briefing from the Carbon Market Institute (CMI).
CEO of the CMI, John Connor said after years of a vague focus on 'low carbon economy' aspirations, discourse had shifted to 2050 net-zero emission goals and, importantly, the credibility of nations’ plans to get there, including their 2030 targets.
“This scrutiny and momentum sets a precedent and expectation for what is to come in the next six months to COP26,” Mr Connor said. “Between now and November there are more opportunities for strengthened targets to be announced, including at the UN General Assembly in September, the G20 Summit in October, and at CMI’s 8th Australasian Emissions Reduction Summit in June.”
According to the CMI briefing launched today, last week’s announcements now mean that over 50 percent of global GDP is aligned with an emissions reduction trajectory designed to keep average global warming to 1.5ºC and that 70 percdent of the global economy is now covered by a net zero target, including every G7 country.
However, Mr Connor warned that countries with similarly high levels of climate ambition were likely to develop improved terms of trade between them, disadvantaging those lagging behind.
“With countries like Australia falling behind this increased ambition, investments in the just transition may end up unevenly distributed,” Mr Connor said. “That’s because those countries with concrete or legislated targets provide more assurance for clean economy investment opportunities.
“Strong global climate ambition and collaboration is driving better aid, trade and diplomatic relationships between these nations and will inevitably position them to be able to take more, and more immediate, advantage of opportunities. This mitigates risks to their economies and communities as the climate crisis deepens.”
The CMI welcomed the Australian Government’s announcement to fund development of Article 6 capacity building in the Indo-Pacific, saying it represents a clear and timely shift in policy towards more open and constructive engagement in international carbon markets.
“Regional engagement in international carbon market development is a critical step for Australia to play a more meaningful role in the region,” Mr Connor said.
“Australia has a wealth of knowledge and expertise in the development of nature-based solutions and our decarbonisation and drawdown industries are very keen to engage in the challenge of international carbon markets, positioning our domestic industry for growth.
“Australian business stands ready to engage, and we look forward to working with government on these developments.”
The CMI is the independent industry association for business leading the transition to net zero emissions. Its members include primary producers, carbon project developers, Indigenous corporations, legal and advisory services, insurers, banks and emission intensive industries developing decarbonisation and offset strategies. The CMI's Quarterly International Climate Policy and Market Developments Briefing is a member-only publication. www.carbonmarketinstitute.org