CP Daily: Monday July 2, 2018

Published 23:25 on July 2, 2018  /  Last updated at 23:25 on July 2, 2018  /  Newsletter  /  No Comments

A daily summary of our news plus bite-sized updates from around the world.

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TOP STORY

After weathering June bearish test, 2018 EU carbon price rally to continue in H2 -analysts

EU carbon allowances are expected to vault higher over the next few months, analysts said, after prices weathered a bearish event last month and consolidated at elevated levels within sight of their recent seven-year high.

VOLUNTARY

L’Oreal, Nespresso detail strategies for reducing supply chain emissions

Companies are increasingly looking to carbon ‘insetting’ to blend corporate climate targets with attention to resiliency and co-benefits, according to two European-based entities speaking at a webinar on Monday.

EMEA

EU Market: Strong auction helps lift EUAs back above €15, as wider energy complex advances towards highs

EU carbon allowances crawled back above €15 on Monday, helped higher by a bullish auction result, as wider European energy prices flirted with new multi-year highs.

ICYM

Mayday: Weak ambition, Chinese backtracking threaten future of CORSIA global aviation offset scheme

Fears are mounting that ICAO’s international aviation offsetting mechanism could collapse well before its 2021 start as China backtracks and other nations resist, while the scheme’s rules get severely weakened or delayed by infighting.

Colombian Senate passes climate law to deploy ETS, but rollout uncertain

The Colombian Senate approved a climate bill this week that provides for the creation of an emissions trading scheme, but the country’s recent presidential election has cast uncertainty on when the carbon market would launch.

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CARBON FORWARD 2018

SAVE THE DATE: Carbon Forward 2018 – Survive and thrive in the global carbon markets

Don’t miss the 3rd annual Carbon Forward conference and training day – Oct. 16-18, 2018 in London.

Spend two days with top experts, players, and decision-makers from the global carbon markets as they address today’s most attractive opportunities and pressing challenges. And join us for the EU ETS pre-conference training day organised by carbon market experts Redshaw Advisors, where you will learn how to effectively manage your carbon risk ahead of the looming overhaul of the bloc’s emissions trading scheme.

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Job listings this week:

Or click here to see all our job adverts

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Remember, remember the 6th of November – Washington state campaigners held a press conference on Monday to announce that they had turned in over 370,000 signatures to put a $15/tonne CO2 tax, I-1631, on the state’s November ballot. Speaking at a press conference at the Secretary of State office in Olympia, volunteer signature gatherers from the campaign emphasised the importance of the Evergreen State acting on climate change in the face of federal inaction, while also stressing the link between fossil fuel combustion and negative public health effects in marginalised communities. With the signatures submitted, the tax will come up for public approval on Nov. 6, where campaigners will hope to avoid the fate of 2016’s I-732. That carbon tax initiative divided more progressive and moderate sides within the environmental and related communities, failing with only 41% approval.

Interest compounded – Countries that are vulnerable to climate change are paying significantly more to borrow from the financial markets, according to new research reported in the Financial Times. The paper explains: “The most vulnerable developing countries have already paid more than $40bn in additional interest payments on their governments’ debt because of their exposure to climate change risks. That is set to cost them a further $168bn in the next decade, the study by academics from Imperial College Business School and SOAS University of London found. The most affected countries include Ghana, Tanzania, Kenya, Bangladesh and Vietnam.” Meanwhile, the Daily Telegraph reports that “new research from the World Bank attempting to quantify how climate change will affect South Asia over the coming decades has warned weather changes risk badly denting the living standards of hundreds of millions in the region”. It adds that the bank has calculated that “under the worst case ‘carbon intensive’ scenario, living standards will fall by 6.7% for Bangladesh, 2.8% for India, 2.9% for Pakistan, and 7.0% for Sri Lanka, by 2050”. (Carbon Brief)

Rhode rage – Rhode Island became the first US state on Monday to sue the oil industry over climate change, coming just a week after a US District judge in California dismissed similar lawsuits from the cities of San Francisco and Oakland. The Rhode Island suit, filed in the Bristol County Superior Court, alleges that 21 oil and gas companies knowingly contributed to climate change and did not adequately warn Rhode Island citizens about the risks associated with their fossil fuel products. Additionally, Rhode Island argues that the companies caused sea level rise due their actions and violated state laws by polluting, impairing, and destroying the coastal state’s natural resources and public’s ability to enjoy them. A 2017 assessment by the National Oceanic and Atmospheric Administration (NOAA) estimated that sea levels will rise by nearly 10 feet (3 metres) by 2100. (Climate Liability News)

Tax tactics – The conservative think-tank American Action Forum (AAF) released new research on Monday that says carbon taxes are less economically detrimental and generate more emissions reductions than “command and control” regulations. The AAF, which does not advocate for specific policies, modelled the hypothetical effects of a $25/t carbon tax that rises by 5% a year, finding that it would be more than twice as cost-effective as regulations from the Obama era. However, the authors call for the carbon tax to coincide with a reduction in corporate taxes, a more politically contentious path than the direct rebate model floated by the Climate Leadership Council and its new lobbying offshoot last month. (Axios)

Rule wrangling – The US Federal Energy Regulatory Commission (FERC) ordered PJM Interconnection, a regional electricity transmission organisation spanning 13 eastern states, to rewrite its market rules in a way that some observers say could restrain state efforts to address global warming. In an order published late Friday, FERC commissioners ruled by a 3-2 vote along party lines that the PJM’s current market rules don’t protect competition in the capacity market from “unreasonable” prices variations and distortions against state programmes that either keep older, uneconomic plants in operation or subsidise new technologies that are not yet competitive. In opposition, Democratic FERC Commissioner Rich Glick criticised the agency for holding back state-led efforts to mitigate climate change, while other observers cautioned that the move could lead PJM to conduct a ‘market-based’ bailout for uneconomic power plants, significantly affecting state-led efforts to craft emissions reduction strategies. (Politico)

The problem with Kigali – The Competitive Enterprise Institute and more than 20 other US national and state groups sent President Trump a letter today opposing the Kigali amendment to the Montreal Protocol – an Obama-era treaty limiting global use of potent HFC refrigeration gases. The letter outlines how the amendment would do “far more economic harm than environmental good,” adding that the environmental benefits are minimal. “It is not just consumers who will be harmed by the Kigali Amendment,” they write. “So too will millions of businesses and property owners that rely on air-conditioning or refrigeration — hotels, restaurants, office buildings, rail and truck refrigerated transport — and public buildings, such as schools, churches, theaters, and indoor sports facilities.” Many US businesses and lawmakers support the amendment due to its expected climatic impact and because a handful of American companies stand to benefit from marketing safer alternatives to HFCs. (Politco)

German ingenuity – The net output of renewable energy sources in Germany’s power mix has reached a new record share in the first half of 2018, according to Energy Charts – a website run by research institute Fraunhofer ISE. With a net generation of 113 TWh between the beginning of January and the end of June, wind turbines, solar panels, and other renewable sources contributed about 41.5% to the country’s total power generation, 9% more than during the same period last year and over a third higher than in 2014. (Clean Energy Wire)

Displacement 2030 – The often over-looked future size of the global Electric Vehicle (EV) fleet could be one of the most significant variables to displace potential oil demand in the next decade, according to Carbon Tracker. The think-tank on Monday published research showing that the oil and gas industry is underestimating the speed, scale, and impact of future EV growth, and that oil industry projections for the 2020s are 75%-250% smaller than the sales expected by global car manufacturers that have announced targets. Carbon Tracker adds that its base case assumption foresees 1 million barrels per day of oil displaced for every 60 million EVs on the road in 2030.

And finally… Changing course – The US EPA’s chief ethics officer is the latest party to call for more investigations of embattled agency head Scott Pruitt, the New York Times reported on Saturday. While Principal Deputy General Counsel Kevin Minoli had previously defended some of Pruitt’s previous scandals – such as retroactively approving the EPA administrator’s $50-per-night condo rental and expensive flights – a letter sent to the Office of Government Ethics obtained by the Times marks the public acknowledgement by Minoli that Pruitt may have violated federal ethics rules. In the letter, Minoli writes that “potential issues regarding Mr. Pruitt have come to my attention through sources within EPA and media reports”, adding that he passed along several of these matters to the EPA’s Inspector General. (Climate Nexus)

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