International Emissions Trading Association (IETA)

Nominated for promoting a global market for greenhouse gas emissions, including the use of offsetting through the Clean Development Mechanism (CDM), even though this currently cannot guarantee emission reductions.


The International Emissions Trading Association (IETA) describes itself as a “non profit business organisation” created to “establish a… framework for trading in greenhouse gas emission reductions”. Formed in 1999, it has 168 member companies, including big energy (BP, Shell, Vattenfall); banks (BNP Parisbas, Goldman Sachs); lawyers (Clifford Chance, Norton Rose,); and carbon trading companies (including EcoSecurities). It works in partnership with bodies like the World Bank to develop “an active, global greenhouse gas market.”

A lobbying powerhouse in climate talks

In just over ten years, IETA has become a lobbying powerhouse at the UN climate change talks. At two of the most important recent UN meetings on climate change – held in Bali and Poznan – IETA had the largest accredited non-governmental delegation (lobby groups are accredited as non-governmental organisations, or NGOs), dwarfing the presence of established NGOs such as Greenpeace.

In Bali, for example, with some 336 representatives including lawyers, financiers, consultants, certifiers and emissions trading experts, IETA made up 7.5% of the 4,483 NGO delegates at the UN climate talks. The sheer size of IETA’s presence worried environmental and development groups at the conference. Peter Hardstaff, from the World Development Movement commented: “The fact that the IETA is the biggest NGO in Bali is indicative of the influence it will extend over the outcome of the talks.”

In Poznan, IETA once again had the biggest NGO presence with over 250 lobbyists. The lobby group had hired a whole building where it was holding up to 12 events per day, described by one delegate as a “real parallel conference”. IETA is already gearing up for a large lobbying presence at the UN climate talks in Copenhagen with some 66 events scheduled.

Promoting the CDM

IETA uses these events to promote the idea of a totally global market in greenhouse gases, a mechanism which allows corporations and governments to buy and sell the right to pollute. Key to this market is the Clean Development Mechanism (CDM), which allows governments and industry in developed countries to claim to be making carbon reductions by investing in supposed “clean developments” in the developing world. This is also known as offsetting.

The CDM has been severely criticised because it allows rich countries to avoid making emissions cuts at home. There is also strong evidence that some of its projects are creating serious social and environmental problems in developing countries. According to David Victor, a leading carbon trading analyst at Stanford University, two-thirds of the supposed emission reduction credits being produced by the CDM are not backed by real reductions in pollution.

Some even argue that the CDM increases pollution. In 2008, at an IETA lobbying event at the European Parliament, a participant from the Öko-Institut commented that by giving credit to what is effectively business as usual, the CDM “results in a global increase of greenhouse gas emissions.”

A key area of controversy is the ‘additional’ nature of CDM projects: that is where projects that qualify for CDM credits must be able to show that the emission reductions would not have happened anyway, even without the CDM funding: ie they are “additional” to what would have happened. But even IETA concedes that proving ‘additionality’ is “an almost impossible task” and one EU Commission official estimated in Poznan that 40% of CDM projects are not additional to what would have happened without CDM funding.

IETA knows the issue of ‘additionality’ will be an issue in Copenhagen. One of its events is called “Sustainability instead of additionality?” where it concedes that “During the negotiations, many Parties highlighted the fact that the CDM to date is being perceived to have contributed little to sustainable development.”

Although the CDM has failed to reduce global emissions, IETA still claims it has been a success. Its lobbying documents argue that the CDM “has demonstrated that market-based mechanisms spark new, keen interest in clean development activities in countries whose emissions must be addressed if the international community is to meet its climate change objectives. The invaluable momentum that the CDM has created must be preserved and built upon.”

IETA goes further and argues that what is needed now is “a new CDM with more flexible mechanisms”, including an expansion and broader standards for project approval, including sector-specific standards, allowing different rules for polluting industries – creating the potential for those industries to escape tough standards.

High level access to decision-makers

IETA secures valuable access to decision-makers through its staff and members. Its President is Henry Derwent, a former Director for International Climate Change in the UK government. It also secures access through its members, such as Ecosecurities, a leading emissions trading company recently taken over by JP Morgan.

Ecosecurities develops CDM projects, sells carbon credits and provides consultancy services to business as well as the European Commission and UN Framework Convention on Climate Change. Ecosecurities has set up a body called the Project Developers’ Forum to lobby for more CDM projects to be approved. In Poznan, Ecosecurities had 16 lobbyists, 15 of whom were operating under the umbrella of business associations, including the Business Council for Sustainable Energy, the Carbon Markets and Investors Association, and as IETA lobbyists.

In response to being told IETA had been nominated, Henry Derwent said: “We will be honoured to accept this recognition of the work we have been doing over more than 10 years. During that time we have been delighted to see that the principle of emissions trading has been more and more widely accepted across the world.”