1. Goals and Targets
IETA believes that the Parties should agree firm targets for the next commitment period;indicative medium-term (~2030) targets that lay out a series of ‘rolling targets’ forsubsequent commitment periods; and a long-term (~2050) global goal. The Bali ActionPlan makes it clear that these goals and targets should be in accordance with theprinciple of common but differentiated responsibilities and respective capabilities, andpredicated on the need to ensure comparability of effort among all Annex-I Parties.
To ensure the predictability and effectiveness of international climate efforts, IETA believesthat it is essential that the Parties establish a clear timeframe of emission reduction goals andtargets that extend over the next several decades, and that those goals and targets areenshrined in national legislation to ensure their credibility.
The provision of such goals, and their subsequent translation into domestic legislation, willensure that carbon pricing becomes embedded in long-term capital asset planning. Long-termcertainty of carbon constraints is required to drive the research, development, and deploymentof new technologies in countries facing emissions caps - especially in key energy productionand industrial sectors - as well as to enhance the predictability of carbon finance availabilityfor countries whose emissions remain uncapped.IETA advocates the use of ‘rolling targets’ as a means of strengthening the credibility of goalsand targets set
the next commitment period. Rolling targets establish a series of indicative targets for successive commitment periods. They leave some flexibility toincorporate scientific or political developments through allowing the targets to be setanywhere within a small, pre-established range. A series of rolling targets, if incorporated indomestic legislation, would go a long way to ensuring the credibility of medium-term emissionlimitations by setting each Party firmly on a trajectory toward the medium-term target itagreed at the international level.
2. Commitment Period Duration
To accommodate the need for long-term investment certainty as well as the need forflexibility to set targets based on scientific or political developments over the medium-term, IETA advocates for the adoption of commitment periods with a duration of at least8 years
a system of rolling targets, as explained above.
For the private sector, longer commitment periods provide increased predictability andcertainty for business decisions and so facilitate private sector investment in the necessaryresearch, development, and deployment of low-carbon technologies. Longer commitmentperiods also give investors increased flexibility to deploy resources for emission reductionwhen most cost-effective for their business as well as to offset short-term fluctuations inemission levels resulting from economic cycles or unpredictable and one-off occurrences, likenatural disasters. If no other factors bore on the decision of commitment period duration,IETA would advocate, very simply, for very long periods, approaching twenty years.IETA understands, however, that there will likely be a need to allow for adjustments toemissions limits based on political developments and improved scientific understanding of theclimate situation, within shorter periods of time than would be ideal for investor certainty. Forthis reason, IETA advocates the aforementioned hybrid solution that aims for a strong,credible signal of a long-term carbon price (provided by rolling targets of a binding nature)while maintaining flexibility for businesses (through a minimum 8 year commitment period)and flexibility for political and scientific developments (through the provision of a range of acceptable targets, within which the fixed target will be decided based on the available