Event Reports

International Carbon Markets

KAS Israel organized a workshop discussing the implications of Article 6 of the Paris Climate Convention for international markets in general and Israel in particular. The meeting took place in the KAS Jerusalem office on the 26th of September. In the framework of the workshop Israeli and German experts discussed the following agenda items: The Evolution of Article 6 - Cooperative Approaches - Transfers of Mitigation Outcomes – Exchange of Carbon Units - Development of Standards and Guidelines - Accounting Rules - Carbon Pricing - Implications for Israel.

Dr. Borchard, Director of the KAS Israel outlined in his introduction of the workshop that the Paris Agreement is a historical turning point as an international agreement. Since then, Germany has already switched the ways of thinking towards climate change awareness and environmental protection but Israel still needs to bridge it’s gaps of knowledge when it comes to environmental protection. Konrad-Adenauer-Stiftung Israel took the opportunity to provide a platform to enable environmental scientific dialogue by hosting a roundtable at the Jerusalem office. Ronnie Cohen from the Ministry of Environmental Protection Israel confirmed Dr. Borchard’s introduction and added that the knowledge gaps have to be identified and subject-related expertise has to be gathered. Dr. Borchard stressed Israel’s need to understand the Clean Development Mechanisms (CDM) and referred to the recent published Israeli National Plan for the Reduction of Greenhouse Gas (GHG) Emissions.

“The Carbon Market Mechanisms in the Paris Agreement – State of Play and Expectations”

Dr. Karsten Karschunke, the first lecturer of the workshop, is a member of the German delegation negotiating team to the UNFCCC serving as an expert on global carbon markets and emission reduction projects and works for the German Emission Trading Authority. In his presentation Dr. Karschunke outlined the carbon market mechanisms in the Paris Agreement and the state of play and expectations. Therefore he introduced the participants to the carbon market mechanisms in the Kyoto-Protocol and the success story of CDM as well as a critical assessment. After a brief summary of the evolution of the market mechanisms he focused on the Article 6 in the Paris Agreement presenting the General Principles stated in 6.1, the cooperative approaches described in 6.2, the mitigation and Sustainable Development mechanism established in 6.4 and the non-market approaches recognized in 6.8. Taking this into account Dr. Karschunke opened the discussion whether Israel should enter the carbon market. Hereby he underlined the decreasing number of emissions per capita and the potential increase of renewable energy and shifting to natural gas. The audience came to the conclusion that it might be worth considering an Emission Trading System (ETS).

“The Role of Carbon Pricing to Mitigate Climate Change: Examples of Price-based Climate Action”

Ms. Malin Ahlberg continued with a presentation concerning the role of carbon pricing to mitigate climate change and examples of price-based climate action. Ahlberg is an officer form the Federal Ministry for the Environment, Nature Conversation, Building and Nuclear Safty and has, as an environmental engineer, many years of experience in the field of carbon markets and climate protection. First she drew attention to the gaining momentum of carbon pricing, followed by examples and pros and cons of different types of carbon pricing like the ETS and Carbon Tax. Hereby she emphasized in particular the benefits of carbon pricing. Ahlberg concluded her presentation by illustrating Germany’s activities to foster carbon pricing which are the Partnership for Market Readiness (PMR), Carbon Pricing Leadership Coalition (CPLC), Carbon Pricing Panel, Carbon Market Platform and the International Carbon Action Partnership, as well as illustrating the two models of innovative result-based financing of the World Bank’s Pilot Auction Facility (PAF) for methane and climate change mitigation and the Nitric Acid Climate Action Group, launched by the Federal Environment Ministry of Germany in Paris.

“Opportunities and Challenges of the Paris Mechanisms for Private Sector Involvement, taking into account experiences from CDM”

Last but not least Dr. Axel Michaleowa, Managing Director of the consultancy Perspective GmbH, working on the international climate policy instruments and the United Nations Framework - Convention on Climate Change (UNFCCC) process since 1994, spoke. He presented the opportunities and challenges of the Paris Mechanisms for Private Sector Involvement, taking into account experiences from CDM. Therefore Dr. Michaelowa drew attention to the generic experiences with the Kyoto Mechanism in regard to the expectations from 1990s and the lessons learned for 2016. He also outlined the experiences of Israel under the CDM and the additionally and baseline challenges, as well as the competition of mechanisms under the Paris Agreement, followed by his presentation of the diminished role of the private sector under Paris. The economist finished his presentation by giving recommendations to the Israeli government institutions. His recommendations were first to be very clear about the political will regarding the ambition of the Intended Nationally Determined Contribution (INDC). Second, he suggested harnessing the different Paris Mechanisms where they are most appropriate: considering the participation in a pilot activity for up-scaled crediting, the support of usage of CDM rules under the Sustainable Development Mechanism (SDM) (Art. 6.4 Paris Agreement) and carefully regarding cooperative approaches under Art. 6.2. Dr. Michaelowa’s closed his presentation with the recommendation to apply incentive-based policy mitigation instruments by reviving the competitive project funding scheme of 2011/2012 as a policy instrument underpinning Israel’s Paris Mechanism strategy.