‘Climate Change Response Act 2002—Part 4 New Zealand greenhouse gas emissions trading scheme’9
Note: in order to keep New Zealand’s key climate change legislation under one act, the Act incorporates both the Climate Change Response (Emissions Trading Reform) Amendment Act 2020, and the Climate Change Response (Zero Carbon) Amendment Act 2019. The ‘Zero Carbon Act’
details domestic targets to 2050, establishes the Climate Change Commission, and mandates a process of setting and meeting five-year national emission budgets.
FACTSHEETS – 03paKiSTan Status Report 2021ICAP
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PAKISTAN
In force
Under development Under consideration
Launched a national committee in 2019 to assess the role and scope of an ETS Work is underway on preparing MRV regulations for an ETS
Pakistan is considering market-based climate policy instru-ments, including an ETS, to tap into low-cost abatement opportunities and leverage low-carbon investments.
The ‘Pakistan Climate Change Act, 2017’ provides the legal and institutional framework for climate policy in Pakistan.
It establishes the cross-ministerial Pakistan Climate Change Council responsible for the country’s overall climate strategy as well as the Pakistan Climate Change Authority, which is tasked with coordinating climate policy development and implementation, in addition to designing and establishing a national registry and database on GHG emissions. In 2019, the Pakistani Ministry of Climate Change, in cooperation with the United Nations Framework Convention on Climate Change secretariat and the Institute for Global Environmental Strategies, published a study on carbon pricing underlining the potential for emissions trading in Pakistan in the power and industry sectors.
Following the outcomes of the study, Pakistan launched the National Committee on Establishment of Carbon Markets in December 2019. The committee is tasked with assessing the role and scope of carbon markets in delivering Pakistan’s NDC and identifying opportunities for and chal-lenges to improving emissions data. Among other objectives, it will review existing carbon market designs, deliberate with national stakeholders, draft reports, and coordinate informa-tion-sharing and capacity-building activities.
The ongoing work is focused on developing recommenda-tions for the government on the development of a domestic ETS and of credit-based trading mechanisms linked to inter-national carbon markets, which would enable Pakistan to supply offsets to partner countries. Provisions are being drafted for domestic instruments under Article 6, and work is underway on preparing MRV regulations for an ETS. More-over, Pakistan is developing a carbon pricing communication strategy.
Background Information
GHG REDUCTION TARGETS
BY 2030: 20% below BAU including LULUCF (NDC conditional on international support)
Other Information
INSTITUTIONS INVOLVED
Ministry of Climate Change Pakistan Climate Change Council Pakistan Climate Change AuthorityNational Committee on Establishment of Carbon Markets
IMPLEMENTING LEGISLATION/REGULATION
Pakistan Climate Change Act 20171OVERALL GHG EMISSIONS (excluding LULUCF) 397.5 MtCO2e (2015)
OVERALL GHG EMISSIONS BY SECTOR (MtCO2e) Energy 186.0 (47%)
industrial processes 22.0 (6%) agriculture 174.3 (44%) Waste 15.5 (4%)
1 – www.na.gov.pk/uploads/documents/1485513841_966.pdf
FACTSHEETS – 03phiLippinESStatus Report 2021 In early 2020, the Committee on Climate Change of the
Philippine House of Representatives conditionally approved the ‘Low Carbon Economy Act’ House Bill (HB) No. 2184, which includes provisions for a domestic cap-and-trade system. A technical working group has since been estab-lished to review the bill, which will be reconsidered based on the group’s input. The bill would establish a cap-and-trade system for the industrial and commercial sectors, admin-istered by the Philippine Department of Environment and Natural Resources (DENR) and the Department of Trade and Industry.
Under the proposed legislation, the cap-and-trade system would cover a variety of GHGs, including carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, and any other gas determined by the DENR to contribute to global warming. The DENR would determine key details regarding setting annual emissions reduction targets, setting a cap, distributing allowances, monitoring, and enforcement. The bill would also establish a ‘Climate Reinvestment Fund’ to be used by the DENR to exclusively address global warming. The bill does not specify a timeline to have the system in place.
Background Information
GHG REDUCTION TARGETS
BY 2030: Conditional pledge to keep 2030 emissions 70%
below BAU levels (INDC, NDC to be submitted in 2020/2021)
Other Information
INSTITUTIONS INVOLVED
Department of Environment and Natural Resources Department of Trade and Industry
House of Representatives Committee on Climate Change
PHILIPPINES
In force
Under development Under consideration
OVERALL GHG EMISSIONS (excluding LULUCF) 229.0 MtCO2e (2017)
OVERALL GHG EMISSIONS BY SECTOR (MtCO2e) Energy 133.0 (58%)
industrial processes 12.0 (5%) agriculture 63.0 (28%) Waste 20.0 (9%)
Legal basis being developed for an ETS in the industrial and commercial sectors
FACTSHEETS – 03rEpUBLiC OF KOrEaStatus Report 2021ICAP
Korea Emissions Trading System
CAP592 MtCO2e (2020) 609 MtCO2e (2021)
GASES
Several gases OFFSETS AND CREDITS
domestic
AVERAGE 2020 PRICE1
KrW 32,595.83 (USd 27.62) TOTAL REVENUE
KrW 480.7 billion (USd 407.3 million2), KrW 248.3 billion (USd 199.4 million) collected in 2020
SECTORS:
Fuel Combustion
(including transport) 632.4 (87%) industrial processes 57.0 (8%) agriculture 21.2 (3%) Waste 17.1 (2%) In force
Under development Under consideration
1 – Average secondary market price from KRX.
2 – The regular auction schedule began in 2019. Allowances were also auctioned in 2016 and 2018 by the Allocation Committee from the reserve for market stability measures.
Revenues from these auctions totalled USD 99.6 million and are not included in the total auction revenue figure above.
East Asia’s first national ETS Phase 3 commenced in 2021 with a stricter cap, updated allocation provisions, and third-party participation 2050 net-zero target currently in the legislative process
ETS DESCRIPTION
The Korea ETS (K-ETS) was launched on 1 January 2015, becoming East Asia’s first nationwide mandatory ETS and, at the time, the second-largest carbon market after the EU ETS. The K-ETS covers 685 of the country’s largest emitters, accounting for ~73.5% of national GHG emissions. It covers direct emissions of six GHGs, as well as indirect emissions from electricity consumption. The K-ETS is meant to play an essential role in meeting Korea’s 2030 updated NDC target of a 24.4% reduction from 2017 emissions.
The first and highest legal base for green growth and imple-mentation of the K-ETS is the ‘Framework Act on Low Carbon, Green Growth’ (2010). The ‘Act on Allocation and Trading of Greenhouse Gas Emissions Allowances’ (‘Emissions Trading Act’) and its Enforcement Decree, passed in 2012, stipulate government actions, institutions, and timelines for the K-ETS.
Further details of the K-ETS were outlined in two Master Plans (January 2014 and February 2017). Detailed Allocation Plans are released for each trading phase (January 2014, July 2018, and September 2020).
The K-ETS was preceded by a mandatory GHG and Energy Target Management System (TMS) that was launched in 2012 (following a two-year pilot phase started in 2010). The TMS facilitated the collection of verified emissions data and training in the MRV process and still applies to smaller enti-ties not covered by the K-ETS.
YEAR IN REVIEW
2020 was an important year for climate ambition in Korea with the government announcing a Green New Deal and a net-zero target for 2050, tied to a commitment to speed
up investment in clean technologies across the economy.
2020 also saw notable developments in the K-ETS with the adoption of key regulations for the third trading phase which commenced with the start of the new trading year in 2021. The updates include amendments to the ‘Emissions Trading Act’ and the adoption of the Phase 3 Allocation Plan in September 2020—the latter of which forms the main ETS document detailing updated design provisions ahead of the new trading phase.
Starting from Phase 3, financial intermediaries can partici-pate in the secondary market and trade allowances as well as converted carbon offsets on the Korea Exchange (KRX)—
complementing the “market maker system” that was intro-duced in Phase 2 to support market liquidity. Furthermore, the system’s scope has been expanded to include construc-tion companies and (large) transport companies. This corre-sponds to a rise in the number of compliance entities from
~610 to 685 and a 3.2% increase in the average annual cap, amounting to 609 million tCO2e during 2021–2025. The inclu-sion of these sectors brings the system’s coverage to 73.5%
of national emissions, an increase of more than 2 percentage points. The allocation plan also foresees the introduction of a futures market at a yet-to-be-determined date.
In line with earlier announcements about allocation provi-sions in Phase 3, the share of auctioning increases from 3% to 10% in 2021 for a total of 41 out of 69 industries eligible to participate in auctions. The remaining 28 subsectors receive 100% free allocation as determined by a carbon leakage index. The share of benchmarking increases from 50% to 60% and expands to a total of 12 sectors. The share of offsets in Phase 3 is reduced from 10% to 5%.
Background Information
OVERALL GHG EMISSIONS (excluding LULUCF) 727.7 MtCO2e (2018) OVERALL GHG EMISSIONS BY SECTOR (MtCO2e)