Some 2000 visitors from more than 100 countries are leaving Barcelona today at the end of Carbon Expo. The meeting, now in its 10th year, got off to a great start on Wednesday with the director of the World Bank´s Climate Policy and Finance unit, Mary Barton-Dock, welcoming the participants, followed by stimulating opening remarks from Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change (UNFCCC).
Figueres urged the audience to continue building carbon markets and not wait for policy perfections. She also encouraged participants to continue making the case for carbon markets to policy makers, who have committed to a global agreement on emissions by 2015. She emphasized the importance for the private sector to more loudly voice their willingness and ability to move to a low-carbon growth trajectory and compared the carbon market to a tree planted just a few years ago, not possibly imagining that today it would have sprouted 6,800 projects registered with the UNFCCC in 88 countries, representing 215 billion dollars of investment.
However, Figueres also acknowledged the importance of domestic initiatives that were putting a price on carbon, at a time when a global agreement continued to challenge policy makers.
"Now those carbon enthusiasts – myself included – also have an unfortunate tendency to stand over this tree that is growing still and insist that the growth has to come from the trunk, because that is what we planted and we want to see growth from the trunk," Figueres said. "But the fact is that we need to realize that growth is not now coming from the trunk, it’s actually coming from an extraordinary number of offshoots that are springing up everywhere."
This leads me to the World Bank report, Mapping Carbon Pricing Initiatives, released on Wednesday morning, which focuses on the proliferation of domestic carbon initiatives around the world that put a price on carbon – either through cap and trade schemes or carbon taxes. At the press conference, Alex Kossoy of the World Bank presented the report´s findings - over 40 national and 20 sub-national jurisdictions, as varied as Kazakhstan, China, South Africa and Australia, have either been implemented or are considering pricing mechanisms. He also talked about the linking that is taking place between markets, such as between the EU ETS and Australia, and California and Quebec. While the European trading scheme stutters, the general feeling at Carbon Expo this year was that the future rides on these national initiatives.
It was evident that the growth of domestic carbon markets was a common theme that echoed across the Expo this year. Dirk Forrister, President and CEO of International Emissions Trading Association (IETA), also commented on the emergence of national pricing initiatives:
"Domestic markets are the ones that people are really paying attention to, that are going to affect price formation, that are going to create the supply-demand dynamics and that may create connections through linkages."
I was also delighted to see that more than one speaker referred to the World Bank’s “Turn Down the Heat” report and highlighted the challenges that emerged from the recent announcement that atmospheric concentration of carbon dioxide had crossed the 400 parts per million threshold. Did we catch a new sense of urgency? Perhaps not, but the emergence of the Expo as the annual event for all forms of market mechanisms including analysis of carbon and non-carbon transactions, is now clearly established.
On this last point, the fact that we were able to, after some effort, convene the UNFCCC’s Standing Committee on Finance to hold its first Forum on May 28 as a means of consulting with stakeholders and market participants was a major step in sensitizing negotiators to climate financial markets. More than 100 people spent the entire day coming to grips with issues related to everything from the role of investors and innovative approaches in financing to strategic perspectives on climate finance.
What ultimately made this Carbon Expo a great success was the convergence of ideas and the quality of exchanges that happened at plenaries and in the corridors of Fira.
For us at the World Bank, in addition to the honor of co-hosting the Expo, this was also an opportunity to test the ideas that we believe are needed to shape the future of this space: the globally connected markets of the future, energy innovations for Africa, ratings systems for NAMAs, climate-smart agriculture, and sustainable cities, among others.
What stood out at Carbon Expo this year were the many legends and veterans that attended – including Andrei Marcu and Ken Newcombe who put together the first Carbon Expo a decade ago. There were also many young people participating. In fact, most of the people in my own team are barely half my age! This is as it should be: it is they who will deal with the consequences of current global ambition on carbon, in both their professional and personal lives. Ten years from now when they host the 20th Expo, they will surely hold us accountable; as the World Bank's president asked us when he saw the Turn Down the Heat report – what did you do, and when you knew? To quote Figueres, we are not waiting for policy perfections.
Finally, a participant at our ratings session on Friday said that, ever so often, a defining moment comes along that is a game changer. This, he said, was one of them. That is what the Expo has to do, year after year. See you next year!