The World Trade Organization will meet on green-trade rules immediately after the climate talks in Glasgow in November this year, according to Ngozi Okonjo Iweala, director general of the organization.
Greening the flows of goods and services will be a step forward in the climate fight, boosting employment in renewable energy, for instance, she told an IEA conference.
The EU and other nations are pushing for trade to be linked to climate policy to encourage action on cutting emissions by countries wanting to tap global markets.
“We know we need to scale up investments, both public and private,” Okonjo Iweala said. Trade can facilitate it, she said.
China’s senior energy official Zhang Jianhua said international collaboration is important.
Tackling the climate crisis by installing renewable energy is helping India’s ability to give its people their first access to electricity, said Raj Kumar Singh, that country’s minister of power, new and renewable energy.
Feb. 10, 2021 — US Chamber of Commerce names Suzanne Clark as new CEO, replacing Thomas Donohue, who led the organisation for more than two decades, WSJ reported.
Days before Mr. Biden was sworn into office, the Chamber took its strongest position yet in favor of climate-change legislation: WSJ
Another fascinating two sentences:
In 2019, the Chamber said Mr. Donahue would step down in 2022—an announcement that came moments after The Wall Street Journal published a story reporting that Mr. Donohue regularly used the Chamber’s corporate jet service to travel on business and personal trips, including a weeklong trip to the Greek Islands in 2019 with his girlfriend.
At the time, the Chamber said it would conduct an extensive search for a successor.
Jan. 29-31, 2021 –LONDON: OPINION — Call me an optimist (plenty have), but the diplomatic foxtrot taking place across the globe right now seems like some sort of delicate-aggressive climate-trade negotiation.
The U.S., China and the European Union know it’s time to cooperate aggressively on climate action and on the trade of goods.
Doing so would tackle half the world’s heat-trapping gas and give us all an outside chance of keeping temperatures from rising 1.5C.
As climate activist Greta Thunberg rightly keeps reminding us, it seems very unlikely. But take a ride in my green-hydrogen-fueled helicopter for a few minutes and fly as high as possible — and you might be able to glean some hope.
“What we are seeing is the beginnings of a very comprehensive approach by China where climate negotiations will be a very important instrument of its wider foreign, trade and economic policy engagement, especially in a post-Covid world,” said Ashutosh Shastri, founder, director of EnerStrat Consulting, an energy and climate markets advisor. “They don’t take any of these things lightly.”
The substantial barriers to a climate deal between the three include choosing which currency gets to become the base currency of any global carbon market, agreeing some rules of green finance to limit greenwashing and agreeing green WTO/Paris carbon trading rules.
So the Renminbi, Euro and U.S. dollar are firmly in the frame and each will be fighting for a global role in the climate shift.
The U.S. and Europe are also using climate policy to further economic interests and climate-justice goals. Importantly, China is seeing a plan by Europe to install a carbon tax at its border as “an incentive” to engage rather than as a threat, which has apparently been its stance until this month.
I’ve added emphasis to some of this below to highlight the key bits.
The U.S. dance
John Kerry, special climate envoy, USA, Jan. 27 press conference: “With respect to China, obviously we have serious differences with China on some very, very important issues. And I am as mindful of that as anybody, having served as Secretary of State and in the Senate, the issues of theft of intellectual property and access to market, the South China Sea. I mean, run the list; we all know them. Those issues will never be traded for anything that has to do with climate. That’s not going to happen.
But climate is a critical standalone issue that we have to deal on in the sense that China is 30 percent of the emissions of the world; we’re about 15 percent of the emissions of the world. You add the EU to that, and you got three entities that are more than 55 percent or so.
So it’s urgent that we find a way to compartmentalize, to move forward. And we’ll wait and see.
But President Biden is very, very clear about the need to address the other issues with China. And I know some people have been concerned. Nothing is going to be siphoned off into one area from another.
China playing “hard-to-get” in its response, one day later
Foreign Ministry Spokesperson Zhao Lijian: Climate change is a common challenge faced by humanity. As it concerns the future of all humankind, to tackle it requires global actions, global response and global cooperation instead of any solution by a single country. China and the United States share broad common interests and abundant room for cooperation. We had fruitful cooperation on addressing climate change, and played a constructive role on the conclusion, signing and entry into force of the Paris Agreement. China is ready to cooperate with the United States and the international community on climate change.
That said, I’d like to stress that China-U.S. cooperation in specific areas, unlike flowers that can bloom in a greenhouse despite winter chill, is closely linked with bilateral relations as a whole. China has emphasized time and again that no one should imagine they could ask China to understand and support them in bilateral and global affairs when they blatantly interfere in China’s domestic affairs and undermine China’s interests. We hope the United States can create favorable conditions for coordination and cooperation with China in major areas.
The long-distance-climate-dance between China and the U.S. has been underway ever since Biden got into office 11 days ago. It’s been fascinating to watch.
Jan. 27, Zhao Lijian responds: “First, China is the largest developing country in the world, but the target time China has set for itself to reach carbon neutrality is only 10 years behind that of major developed countries. Second, most developed countries have pledged to achieve carbon neutrality by 2050, which means it will take them 60 years to traverse the path from carbon peaking to neutrality. As China aims to peak carbon dioxide emissions before 2030 and strives to achieve carbon neutrality before 2060, it will only take China about 30 years.”
U.S. officials in the new administration promoted how the country’s states and cities had kept up the downward pressure on emissions.
The EU-China relationship seems more assured. China’s following Germany’s solar rollout, for instance, while being keen to sell its inexpensive PV panels to Europe and the global south.
“We are complimentary. We can do a lot actually to make full use of each others’ advantages,” ambassador Fei Shengchao, minister councilor at China’s mission to the EU, said Jan. 28 at a Euractiv online conference.
At that event, EU climate negotiator Elina Bardram invited China to peak its emissions in 2025 instead of 2030, taking advantage of the opportunity to boost ambition provided by Joe Biden’s win in the U.S. election. China’s not budging, not immediately at least.
The most populous nation may be waiting for bigger incentives before joining forces with the other two. That could be related to trade (back off on Huawei, for instance) or on the terms of the climate deal itself…such as a looser 2030 emissions cap or more generous use of historic carbon credits.
With the U.S. putting together its new Paris climate pledge within three months (and China also due to update its pledge), the timing of a potential deal is becoming sooner rather than later. China’s national carbon market officially starts tomorrow.
On top of that, China’s 14th five-year plan covering the 5 years starting 2021 may be set as early as March, 2021.
Even a small amount of progress would be a relief, because we are now in the fourth devastating decade of dragging our feet over the climate.
One of my readers says waiting for the deal is a little like Waiting for Godot, the famous existentialist novel, where Vladimir and Estragon engage in a variety of discussions and encounters while awaiting a third man (or woman?).
Except the enraging climate stalemate is probably the biggest ever existential threat.
It’s difficult to know if China or the U.S. is Godot … but Kerry’s language above seems to indicate he wants Estragon’s role (he doesn’t seem like a Vladimir, anyhow).
China, with less historical blame for the crisis despite its huge population, seems happy to keep the other two waiting. (No one ever said the Chinese can’t negotiate and the “best negotiator in the world” Donald Trump, didn’t get them over the line.)
The good news is if the three big celebrities of the climate crisis can get their stuff together during the next few months, the world is now in a much better place to hop on board aggressively and potentially influence their agreement before/during United Nations climate talks in November.
Should the three find a way to meet on carbon markets then there may not be a need for Europe to implement its disrupting and complicated carbon border adjustment mechanism, said Edmond Alphandery, former finance minister of France, at the event. Other nations from Brazil to India and Russia could then get on board, encouraging buying and selling of greener goods among global trade groups.
Adding to the momentum is digitization of trade via the World Trade Organization, which will make it easier to incorporate carbon prices, even if they are at different levels around the world, especially in the period through 2030.
Having no trade barriers related to climate “is the objective we should have in mind,” Alphandery said.
China, whose emissions are partly the result of making stuff for the U.S. and Europe, may be on board. I’ve not ever heard a Chinese official say anything like this, publicly keeping an open mind on a global carbon price (usually China insists on having a lower price, at least initially):
“I will not rule out any possibility in any particular regard,” Fei said.
So … there’s at least a chance of unprecedented global cooperation on climate, partly because big trade groups have formed around the globe, including in Africa, Asia, the Americas (and the EU is still largely intact).
“This is not America against Europe against China,” said Lidia Pereira,” a member of the European Parliament. “This is not an economic conflict or a conflict for the control of some parts of the globe. We can only win together, or we will lose together,” she told the Euractiv event.
(Adds MEP in final paragraph, china ambassador, former French minister, EU climate negotiator, EnerStrat Saturday, extra U.S.-China dance moves Sunday; made Shastri‘s comment clearer after speaking with him again Sunday)
Jan. 26, 2021 — LONDON: China continues to slowly turn the screws on greenhouse gas, saying Shanghai is to peak its emissions before 2025, according to China Daily.
Having the city begin cutting emissions soonish indicates the most populous country is looking closely at what it can do as nations are meant to be boosting the ambition of their climate targets before the Glasgow UNFCCC talks in November.
It comes as John Kerry, special U.S. climate envoy asks China to try to reach net zero by 2050 instead of 2060. The U.S. has only 4% of the world’s population yet has the most historical responsibility for climate change.
Shanghai is aiming to hit its peak in carbon dioxide emission before 2025, five years ahead of the country’s timeline, according to a five-year plan being reviewed at the ongoing municipal people’s congress.
The draft of the Shanghai’s 14th-Five-Year Plan and development vision for 2035 stated that the city will push forward energy saving and emission reduction in key industries such as electricity, chemicals and steelmaking to ensure that carbon emission peaks before 2025.
By 2025, the annual amount of coal consumption in the city is expected to be under 43 million metric tons, and the ratio of coal in primary energy consumption will be reduced to around 30 percent, while the use of natural gas, which produces less greenhouse gases than carbon or oil, will be raised to 15 percent.
In the past five years, Shanghai has been developing its renewable energy sector as it seeks to increase the use of new energy to 8 percent of the city’s total electricity consumption.
Thirty eight states covering 80% of the U.S. population “kept going” on emission cuts despite Trump’s anti-climate-action stance, Kerry said. The nation needs to press on “with humility,” he said. “They are not going to believe us when we just say it, we have to do it,” he said after speaking with European leaders calling for more ambitious climate action.
See this report on Kerry’s earlier remarks from last week:
Kerry called on U.S. states to keep up their downward pressure on emissions. All nations need to set targets for 2025 and/or 2030 “so everyone can understand it’s not fake. It’s not a phony, empty promise. It really is getting real.”
The 2050 target for net zero is “a global target. We have to be there by 2050,” Kerry said.
–China retains access to EU markets and gets investment possibilities in renewable energy, the Financial Times reports
By Mathew Carr
Dec. 28-29, 2020– LONDON: Agreement ‘could be reached as early as Tuesday’ following movement on major sticking point, Newspapers reported.
“No country had raised ‘stop sign’ clearing way for political endorsement, source says,” according to the South China Morning Post.
For China, it retains access to EU markets and offers investment possibilities in renewable energy, the Financial Times reports.
The endorsement of the deal came after EU negotiators said there were “positive developments” on Beijing’s commitments on labour standards, one of the major sticking points.
The EU and China have been cooperating on carbon pricing. China’s national carbon pricing system has been delayed as U.S. President Donald Trump resisted climate action. With Trump being replaced by Joe Biden next month, more cooperation on the climate crisis is seen between China, the U.S. and EU, which last year had 44% of the world’s energy emissions.
Yet trade tensions remain high across the world, and the climate transition, or lack of it, is seen potentially upsetting existing economic relationships.
“China’s economic growth aims to meet the Chinese people’s aspiration for a better life and inject impetus into global economic recovery. China is still the biggest developing country in the world, where uneven and inadequate development remains a prominent problem. Development is the underpinning force for tackling all challenges. As we work to develop a new development paradigm for high quality development, China will play a more active role in global market, deepen cooperation with other countries, and share development opportunities for win-win results,” said China Foreign Ministry Spokesperson Zhao Lijian on Dec. 28 at a regular press conference.
Dec. 17, 2020 — LONDON: Standards that require companies to disclose their climate risks and measures to ensure a clean exit to the coronavirus pandemic are seen boosting demand for carbon credits.
“A number of large multinationals including Unilever, Microsoft, Mars, Maple Leaf Foods, Google, Nike, HSBC, Swiss Re have committed to making their business operations carbon neutral,” said Lisa DeMarco, senior partner at DeMarco Allan LLP and others, in an article published Wednesday on the Energy Regulation Quarterly website. The firm specialises in climate law.
“And any number of entities are purchasing carbon offsets in the voluntary carbon market in order to achieve those targets. These developments herald a new age of climate commitment veracity that are certain to require additional climate-related financial disclosures to both shareholders, investors, and ultimately, end-use customers.“
United Nations emissions credits have already registered a tiny uplift in market prices in recent days. See this from ICE Futures Europe. It could be a sign of more to come. See this:
The government responses of the world’s 200 nations to the global pandemic have largely included incentives to use cleaner, health-conscious measures and climate policies to spur economic production and employment.
“Many of those policy responses and economic stimuli have ‘green strings’ in the form of enhanced climate change and environmental, social, and governance (ESG) disclosure obligations. Canada is no exception,” DeMarco said.
On May 11, 2020, the Canadian government released the Large Employer Emergency Financing Facility (LEEFF), to provide Canada’s largest employers that are impacted by the COVID-19 pandemic with liquidity relief, she said.
Companies are required to demonstrate a long-term commitment to addressing climate change and commit to publishing annual climate-related financial reports in accordance with the Task Force on Climate-related Financial Disclosures (TCFD).
Supporting TCFD organizations represent 77 countries and include companies with a combined market capitalization of over $15 trillion, and more than 750 financial firms, responsible for assets of over $155 trillion. Over 110 regulators and governmental entities from around the world support the TCFD, including the governments of France, Belgium, Canada, Chile, Denmark, Ireland, Japan, New Zealand, Sweden, and the United Kingdom.
Full text here: The COVID-19 pandemic is anticipated to trim global economic growth by 3–6 per cent in 2020, result in levels of unemployment not experienced since the Great Depression of the 1930s, and curtail global trade by 13–32 per cent. Virtually all of the governments of the more than 200 countries affected by the pandemic have enacted fiscal and/or monetary policies that are intended to facilitate economic recovery from the pandemic. Many of those policy responses and economic stimuli have “green strings” in the form of enhanced climate change and environmental, social, and governance (ESG) disclosure obligations. Canada is no exception.
On May 11, 2020, the federal Government released the Large Employer Emergency Financing Facility (LEEFF), to provide Canada’s largest employers that are impacted by the COVID-19 pandemic with liquidity relief. Companies are required to demonstrate a long-term commitment to addressing climate change and commit to publishing annual climate-related financial reports in accordance with the Task Force on Climate-related Financial Disclosures (TCFD). The government’s stated intent of mandating TCFD was to ensure that recipient corporations are (i) thinking about the challenges that climate change will pose to the company’s future and have a response for it, and (ii) disclosing their climate footprint, and the related challenges that they may face to their shareholders. While there is no reported uptake of the LEEFF to date, its existence and its climate-related disclosure obligations are consistent with recovery programs in other jurisdictions.
The EU has also tied its economic recovery programs to stronger climate-related financial disclosure and support for the goals of the Paris Agreement. On May 27, 2020 the EU released its Next Generation EU Plan, which basis the EU economic recovery largely on the EU New Green Deal and includes climate disclosure obligations. It includes a €750 billion recovery plan that relies heavily on sustainable and digital transitions to COVID-19 economic recovery and climate resilience. The spending will be guided by a sustainable finance taxonomy (the “Taxonomy”) aimed to channel private investments into technologies and solutions that contribute to at least one of six pre-defined environmental objectives: (i) climate change mitigation, (ii) climate change adaptation, (iii) sustainable use and protection of water and marine resources, (iv) transition to a circular economy, (v) pollution prevention control, and (vi) protection and restoration of biodiversity and ecosystems. The taxonomy sets performance thresholds for economic activities. The standards and thresholds set are anticipated to inform the EU’s proposed carbon border adjustment mechanism (CBAM) and shape new tariffs on higher emission products imported into the EU. In Canada, the Canadian Standards association is also developing a Green Taxonomy for sustainable finance.
All of these recovery plans include climate disclosure obligations consistent with the recommendations of financial leaders including Mark Carney, the former governor of the Bank of England, who has identified the recovery from COVID-19 as a “chance to avoid returning to the status quo.”
This article outlines the existing requirements and developing trends in climate-related and ESG financial disclosure in Canada and other jurisdictions during this time of COVID-19 economic recovery. We postulate that enhanced climate related financial disclosures and standards may form the basis for sector specific GHG emission standards and potential carbon-related border measures. We expect similar requirements to emerge in this increasingly trade protectionist context that is shaping the global pandemic economic recovery and the Paris Agreement pathway to a carbon neutral world in or around 2050.
I. EXISTING REQUIREMENTS FOR CLIMATE-RELATED FINANCIAL RISK DISCLOSURE
There are a number of climate related standards and requirements, but global consensus appears to be emerging around the TCFD. Support for the TCFD has grown to include over 1,027 organizations, with a market capitalization of over $12 trillion as of the beginning of 2020. TCFD requires climate-related disclosure in four core areas:
Governance. Disclose the organization’s governance around climate-related risks and opportunities. The guidance affirms that the tone from the top is critical. A recent legal opinion for the Climate Law Initiative confirmed that directors are legally obligated to address climate change risk and opportunities as part of their oversight of the companies they serve. In the context of climate change risks, directors and officers that exhibit conscious disregard or wilful ignorance of the material financial risks of climate change may be liable for breach of their fiduciary duty of trust and duty of loyalty. Failure to consider climate change risks may lead to liability and actions against the corporation, and in some cases, personal liability for directors and officers. Accordingly, securities disclosure requirements necessitate that material risks associated with climate change be disclosed. Stakeholders, broadly defined, are increasingly demanding that directors and officers understand, measure, mitigate, and report on the risks associated with climate change.
Strategy. Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning where such information is material.
Risk Management. Disclose how the organization identifies, assesses, and manages climate-related risks.
Metrics and Targets. Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
Canadian Securities Administrators (CSA) and the Ontario Securities Commission (OSC) have each promulgated instruments supporting climate-related financial risk disclosure. The CSA issued Staff Notice 51-358 Reporting of Climate Change-related Risks (the “Notice”) in August 2019, which expressly cites the TCFD recommendations and provides guidance on preparing disclosure of material climate-related risks. The Notice follows and expands upon CSA Staff Notice 51-333 Environmental Reporting Guidance, issued in 2010.
The Notice was motivated by (i) increased investor interest, (ii) room for improvement in disclosure, and (iii) domestic and global developments, including the recommendations of the TCFD and domestic voluntary disclosure frameworks. It organizes climate-related risks into two categories:
Physical risks which are acute (event-driven), and chronic (longer-term shifts in climate patterns).
Transition risks which include reputational, market, regulatory, policy, legal, and technological risks.
The Notice recognizes that climate risks are difficult to quantify but encourages: (i) issuers to carefully consider if they have any material exposure to climate risks; and (ii) boards and management to adopt relevant, clear, and understandable entity-specific disclosure of how the business is specifically affected by all material risks resulting from climate change.
The OSC has emphasized that “companies already have an obligation to disclose material environmental and governance information,” and has committed to “continue to monitor the appropriateness of disclosure being provided” and “determine the need for a regulatory response” to the TCFD.
II. DEVELOPING TRENDS IN CLIMATE CHANGE RELATED OVERSIGHT AND DISCLOSURE
Over 1,010 companies have committed to taking science-based targets toward achieving a maximum of 1.5 degrees of global warming in accordance with the Science Based Targets initiative and guidance documents for various sectors, including the financial sector. A number of large multinationals including Unilever, Microsoft, Mars, Maple Leaf Foods, Google, Nike, HSBC, Swiss Re have committed to making their business operations carbon neutral. And any number of entities are purchasing carbon offsets in the voluntary carbon market in order to achieve those targets. These developments herald a new age of climate commitment veracity that are certain to require additional climate-related financial disclosures to both shareholders, investors, and ultimately, end-use customers.
While standards do exist for the voluntary carbon markets, a number of new initiatives are pushing toward enhanced standardization, harmonization and transparency. These initiatives address some but not all potential customer confusion around net zero, carbon neutrality, carbon offsets and include:
The Mark Carney lead Task Force on Scaling Voluntary Carbon Markets;
The Environmental Defence Fund and ENGIE initiatives around the voluntary market; and
The International Organization for Standardization (ISO) 14030 initiatives around green finance.
There are a breadth of issues, terminologies, and a corresponding increase in demand for corporate entities to achieve the goals of the Paris Agreement, even in the face of a member state’s failure to do so. As a result, we do not see the demand for increased standardization and climate related disclosure diminishing. In fact, it is our view that it is only a matter a time before the TCFD requirements and related carbon consumer protection standards become mandatory. The increasing interest of consumer protection agencies and competition/anti-trust bodies also signals the growing trend.
We expect this trend to follow a hockey stick increase in importance should the Taxonomy and/or the related ISO standards be used to support border measures including the CBAM set out in EU New Green Deal and/or carbon border related measures in other jurisdictions. In conclusion, the “carbon writing on the wall” is clear: enhanced climate related disclosures are here to stay and will increasingly become a part of stakeholder expectations and integrated financial disclosures.
*Elisabeth DeMarco,Senior Partner, DeMarco Allan LLP.
Jonathan McGillivray, Senior Associate, DeMarco Allan LLP.
Daniel Vollmer, Student-at-law, DeMarco Allan LLP.
Congressional Research Service, “Global Economic Effects of COVID-19” (21 September 2020), online (pdf): <fas.org/sgp/crs/row/R46270.pdf> (“CRS COVID Report”).
The LEEFF program will be open to large for-profit businesses – with the exception of those in the financial sector – as well as certain not-for-profit businesses, such as airports, with annual revenues generally in the order of $300 million or higher. To qualify for LEEFF support, eligible businesses must be seeking financing of about $60 million or more, have significant operations or workforce in Canada, and not be involved in active insolvency proceedings; See Prime Minister of Canada, News Release, “Prime Minister announces additional support for businesses to help save Canadian jobs” (11 May 2020), online: <pm.gc.ca/en/news/news-releases/2020/05/11/prime-minister-announces-additional-support-businesses-help-save>.
The Financial Stability Board’s Task Force on Climate-related Financial Disclosure (TCFD), the Sustainability Accounting Standards Board (SASB), the United Nations Sustainable Development Goals (SDGs), Canada’s Expert Panel on Sustainable Finance (Expert Panel), the World Bank’s Principles of Responsible Investment (PRI), the Carbon Disclosure Project (CDP), the Climate Disclosure Standards Board (CDSB), the Global Real Estate Sustainability Benchmark (GRESB)/Green Building Certification Institute (GBCI), the Global Reporting Initiative (GRI), the Science Based Targets Initiative (SBT), and Renewable Energy 100 (RE 100).
Task Force on Climate-related Financial Disclosures (TCFD) was established by the Financial Stability Board to develop voluntary, consistent climate-related financial risk disclosures for companies to use when providing information to investors, lenders, insurers and other stakeholders. Sustainability Accounting Standards Board (SASB) is an independent, non-profit private sector standards-setting organization dedicated to enhancing the efficiency of capital markets by fostering high-quality disclosure of industry-specific sustainability information. United Nations Sustainable Development Goals (SDGs) are a collection of 17 goals set by the United Nations General Assembly to be a blueprint to achieve a better and more sustainable future for all by addressing the global challenges we face, including those related to climate change, poverty, inequality, environmental degradation, peace and justice.
Dec. 15, 2020 — LONDON: Seven carbon markets, existing and possible, could link and cover most of the world’s emissions, according to a key China academic.
China, the U.S., the EU, Russia, South Africa, Korea and Southeast Asia could link carbon markets, providing an incentive to reduce climate-damaging emissions, said Xiliang Zhang of the Institute of Energy, Environment & Economy at Tsinghua University.
The tokenisation of commodities and products, blockchain may help spur linking of carbon markets, Zhang told the online European Climate Summit.
Speakers on the summit panel discussing carbon-market linking expressed doubt linkages were likely anytime soon. Australia and the EU had a failed attempt at linking. A link between the EU and Switzerland took years. China’s planned domestic carbon market is years behind schedule and the U.S. does not even have plans for a national market.
The U.K. is leaving the EU carbon market at the end of this month, shrinking it and probably reducing trading liquidity.
The U.K. may link with Europe’s program or it might set out its own global cooperation with other countries, after Brexit. Carbon market linkages don’t need to be struck between nations in close geographical proximity, because trading is done electronically. However rules and the ambition of emission-reduction targets would probably need to be similar.
“I personally think that it would be so much easier for the U.K. to join the EU emissions trading system, which they know and which they have institutionalised than any other ETS,” said Silke Karcher, head of division, EU Climate and Energy Policy, European Climate Initiative, carbon markets, at the German Ministry for the Environment. “I find it hard to imagine they would try anything else, but who knows?”