NERA Senior Vice President and Environment Group Head Dr. David Harrison participated in a workshop and conference on New Market Mechanisms organized by the International Emissions Trading Association and Enel in Brussels on 13-14 October 2011. The two-day workshop brought together almost 100 experts from the private and public sectors to discuss market-based mechanisms that would attract private sector investments into solutions to prevent global climate change. The development of such mechanisms is critical to reducing the cost of meeting global objectives to reduce greenhouse gas emissions. During last year's climate negotiations in Cancun, Mexico, parties and observers to the United Nations Framework Convention on Climate Change were asked to submit ideas on new market mechanisms.
Day One's purposes were to explore the lessons learned from existing market tools (e.g., the Clean Development Mechanism) and to develop new concepts to attract the private sector in finding cost-efficient and large-scale emission reductions. Dr. Harrison delivered a presentation on "Incentives for International Sectoral Crediting Mechanisms" that summarized a report that NERA prepared on behalf of Enel. He noted that, to be viable, such mechanisms have to appeal to three key groups: (1) host governments, such as China and India; (2) buyer countries, such as those participating in the European Union Emissions Trading Scheme (EU ETS); and (3) private parties, including local parties and international investors. Dr. Harrison summarized an evaluation of alternative frameworks that could be developed to provide viable programs.
Day Two was dedicated to discussions among private sector representatives and key public decision makers -- including representatives from the European Commission, Mexico, Japan, and China -- with a view to having an exchange on the feasibility of the proposed market measures and of getting them a prominent place in the agenda for the next round of international negotiations at the end of this year. Dr. Harrison presented the summary of the key messages -- which was a compilation of conclusions discussed on Day One -- that the private sector would like the public sector to address when developing new market mechanisms.
Dr. Harrison is Head of NERA's Environment Group, which specializes in the economic analysis of regulatory, legislative, public policy, and litigation matters related to environmental considerations. Dr. Harrison has extensive experience evaluating market mechanisms to deal with climate change, including serving as a consultant to the European Commission and the UK Government in the development of the EU ETS as well as to numerous trade associations and private companies with regard to climate policy and other matters. He and his colleagues have developed the Carbon Financial Impacts Model, which NERA has used to evaluate the impacts of potential climate change policies in numerous sectors, including electricity, oil and gas, refining, cement, chemical, iron and steel, and others. Before joining NERA, Dr. Harrison was an Associate Professor at Harvard's Kennedy School and on the senior staff of the President's Council of Economic Advisors. He holds a PhD in economics from Harvard University.
View NERA's report, Evaluation of Incentives for International Sectoral Crediting Mechanisms.
View Dr. Harrison's presentation, Incentives for International Sectoral Crediting Mechanisms.
