The future of cities - urban development for sustainable transformation
Insight by Nora Holz
The idea behind the International Carbon Action Partnership (ICAP) was born in 2007, in the policy planning department of the German Foreign Office, with a view to begin fostering cooperation on international climate change issues and related foreign policy. From humble beginnings in a single email inbox, a political declaration was signed in Lisbon in the same year.
ICAP quickly began to garner attention and grow. It welcomed its first memberships from governments around the world thinking about and working on emissions trading systems (ETS). The Secretariat moved soon after to the German Federal Ministry of the Environment.
It took several forays into new territory for ICAP to find its niche in the world of carbon pricing, and climate and foreign policy more broadly. ICAP’s first steps were taken in the Kyoto era – where linking seemed a conceivable way to build a global carbon market “under the Kyoto cap” and where an organization like ICAP could facilitate and accelerate this effort. For this reason, ICAP began with a focus on any and every technical aspect of ETS, in particular the design elements that might facilitate future linkages, such as MRV, allocation, scope, and coverage.
In this period 2007-2013, the Secretariat was led by Martin Bergfelder, later succeeded by Tobias Hausotter. ICAP engaged early on with jurisdictions in the Asia-Pacific region – notably from South Korea, Australia, New Zealand, Kazakhstan, and national and subnational systems in Japan. Dialogue with these regional frontrunners at the time was an important signal of true international cooperation and laid the foundations for the diverse set of members and observers that make up ICAP today.
But global cooperation and exchange remained all the more relevant in a world where models of ETS implementation – with view to scope, allocation, and cap-setting – varied significantly from continent to continent. Renewed vigor in ETS’s potential as a key instrument to tackle climate change meant that those in the field relished the opportunity to learn from their peers. ICAP’s capacity-building programs and training courses also began to reflect the accumulation of practical experiences. With the introduction of ETS master classes, ICAP responded to the growing need not just for conveying ETS basics, but for opening a channel for seasoned ETS practitioners to convey their knowledge to a new generation of ETS designers, working to launch systems in the Global South. The ICAP alumni from these training courses now comprise around 1000 practitioners keeping in touch, working together, and exchanging when they meet at international climate events.
ICAP’s role as an ETS knowledge hub also began to evolve in this time. In 2014, the first edition of the annual Emissions Trading Worldwide Status Report was published. This has become a critical ETS resource and our flagship publication. In 2015, together with the World Bank’s Partnership for Market Readiness, ICAP brought together practical lessons on ETS design and implementation in an ETS Handbook, sparked by demand from policymakers around the world. We expanded our ETS news reporting, and in 2019 launched our Allowance Price Explorer.
Even as other global initiatives emerged, focusing on different aspects of carbon pricing, ICAP retained its position as a key institution with authority to speak on ETS. To this day, ICAP remains a safe and neutral forum to openly exchange on ETS design and engage in advanced technical dialogue. ICAP continues to forge collaborations with other carbon pricing initiatives around the world.
Stefano De Clara has been at the helm since 2021. Now, 15 years since ICAP’s inception, we find ourselves once again at a crossroads with ETS. Established systems from the last decade are maturing. They are largely stable, reliable, and have weathered various storms, showing resilience to financial crises, a pandemic, and now a global energy crisis. At the same time, new systems are also coming online, especially in the Latin American and Asia-Pacific regions.