GFMA submitted responses to the International Organization of Securities Commissions (IOSCO) public consultations on the development of sound and well-functioning carbon markets. This included a responses to both the IOSCO Compliance Carbon Markets (CCM) Consultation Report and the IOSCO Voluntary Carbon Markets (VCM) Report.
The response to the CCM report noted that GFMA supports IOSCO’s efforts to:
a) generate an open and meaningful, cross-industry dialogue with a view to maximising the potential of Compliance Markets;
(b) promote the establishment of a global baseline for the orderly functioning and operation of Compliance Markets;
(c) identify the vulnerabilities associated with upscaling Compliance Markets to mitigate the risk of market abuse and instability;
(d) promote transparent and comprehensive oversight of Compliance Markets, similar to the principles that underpin the integrity and stability of other regulated markets;
(e) strive for certainty as to the legal classification and treatment of carbon allowances; and
(f) propose recommendations to relevant authorities (e.g. regulators as well as public policy governmental institutions) to allow for flexibility in the establishment of Compliance Markets and that support meaningful cross-market and cross-border connections in both primary and secondary markets to upscale and accelerate global decarbonisation efforts.
The response to the VCM report noted that GFMA supports IOSCO’s efforts to:
(a) generate an open and meaningful, cross-industry dialogue with a view to maximising the potential of Voluntary Markets;
(b) identify the vulnerabilities relating to Voluntary Markets and collaborate with the private initiatives that seek to address them;
(c) identify the key regulatory considerations relating to Voluntary Markets to guard against market abuse;
(d) promote sound and well-functioning Voluntary Markets that adhere to best practice;
(e) identify and make recommendations to resolve uncertainties relating to the rules and procedures for: (i) trading ‘mitigation outcomes’ (under Article 6.2 of the Paris Agreement); (ii) trading carbon credits (under Article 6.4 of the Paris Agreement); and (iii) developing frameworks for co-operation between countries to reduce emissions through non-market based mechanisms (under Article 6.8 of the Paris Agreement), taking into account ‘corresponding adjustments’ to avoid double counting and double claiming;
(f) strive for certainty as to the legal classification and treatment of carbon credits; and
(g) propose recommendations to relevant authorities (e.g. securities and commodities market regulators as well as public policy governmental institutions) to support the integrity and development of primary and secondary Voluntary Markets as a means to upscale and accelerate global decarbonisation efforts.
– 10 February 2023 –
