IETA Launches “Markets for NCS Initiative” to Boost Climate Action.

The International Emissions Trading Association today launches the Markets for Natural Climate Solutions (NCS) Initiative.

NCS draw on the power of nature to actively manage land use emissions, remove carbon from the atmosphere and store it in natural systems.

The initiative aims to build a global market for carbon credits generated from NCS projects from forests, soil and wetlands, enabling private sector investment at scale. Markets for NCS will support the transition to a low-carbon economy and promote increased ambition on climate action.

“Markets for Natural Climate Solutions represents the best opportunity (yet) to make NCS an investable asset class,” said Dirk Forrister, IETA’s CEO. “We want to rapidly scale up private sector finance and leverage the potential of nature to help achieve the Paris Agreement goals,” said Dirk Forrister, IETA’s CEO.

NCS are potentially one of the most cost-effective forms of CO2 management and can make a critical contribution to meeting the Paris Agreement’s goal of net zero emissions by the second half of the century. However, at present, only a fraction of the financing aimed at addressing climate change is allocated to these activities.

Despite increasing interest from the private sector, barriers still remain to invest in NCS at large scale. To address this challenge, IETA is working in collaboration with members and stakeholders to establish an effective policy roadmap and market strategy.

“The global effort on emissions reduction has so far focused mainly on cutting CO2 from industrial activity,” said Simon Henry, director of carbon market development at IETA. “Markets for NCS aims to extend our ambitions to using nature in its entirety as a way to both remove greenhouse gases and to manage land use emissions.”

IETA has already gathered a core group of private sector enterprises to help drive the work of establishing NCS as a critical component of the fight against climate change.

The initiative will focus on achieving high environmental integrity, accounting certainty between systems and price transparency, whilst working to empower and benefit local communities involved. 

Key to the initiative are a robust set of rules governing Article 6 of the Paris Agreement, particularly regarding market mechanisms, which are expected to be agreed at this year’s COP.

In 2018, the world’s carbon markets soared to a record value of €144 billion. Inclusion of NCS in carbon markets would significantly increase this value further by unlocking additional investment whilst contributing to mitigation efforts necessary in meeting the goals of the Paris Agreement.

IETA’s Markets for NCS Initiative is led by Simon Henry, IETA’s Director of Carbon Market Development. More details about the initiative may be found at www.ncs.ieta.org.

Founder members of the Markets for NCS Initiative include the Arbor Day Foundation, BHP, BP, Chevron, Shell and Woodside Energy.

Arbor Day Foundation

“Markets for Natural Climate Solutions is an exciting and essential collaboration to scale natural climate solutions. Together we are using the power of markets and private sector value chains to create a better future. If ever there was a time for trees, now is that time.” Dan Lambe, President of Arbor Day Foundation.

BHP

“Conserving, avoiding deforestation and restoring high-carbon ecosystems like forests can provide at least 30 percent of the mitigation action needed to meet the goals of the Paris Agreement.

“Very little climate finance is allocated towards these natural climate solutions. BHP is pleased to support this initiative to increase the scale of private sector investment in NCS and to add cost-effective decarbonisation to policy frameworks.” Dr Fiona Wild, Vice President Sustainability & Climate Change, BHP.

BP

“This IETA initiative will review and recommend policy and commercial tools to help unlock the barriers to develop large scale compliance markets for Natural Climate Solutions.” Paul Jefferiss, BP.

Chevron

“Chevron is looking forward to participating in this initiative to further our understanding of natural climate solutions in terms of their environmental and social benefits and also the needs for a well-designed market in which carbon offsets resulting from natural climate solutions could be traded.” Arthur Lee, Chevron Fellow and Senior Technical Advisor on Climate Change.

Shell

“Natural climate solutions are scalable now and offer significant opportunity for carbon dioxide removal. For this to happen, the world needs a widely recognised robust market to channel capital to nature-based projects, while ensuring the highest standards of carbon accounting.” David Hone, Shell's Chief Climate Change Adviser and IETA Board member. 

Woodside Energy

“Over the last decade, Woodside has invested over A$100 million dollars in biosequestration across Australia. We are excited to be able to collaborate on this initiative to build the market for natural climate solutions internationally.” Shaun Gregory, Executive Vice President Sustainability, Woodside Energy.

5 December 2019

IETA