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Several opportunities will still exist for voluntary market participants to develop and sell offsets over the next decade as more global compliance mechanisms come online, according to experts.
Australia’s Climate Change Authority (CCA) on Tuesday launched a review of the country’s Safeguard Mechanism, questioning whether the policy contributes to reducing GHG emissions and putting the spotlight on issues such as double-counting.
Emitters in Shanghai’s carbon market on Tuesday bought fewer than a sixth of the 2 million allowances on sale in 2018’s only auction in the regional scheme, with the permits clearing at the government-set price floor.
SK Market: Korea ETS sees sporadic trade, softer prices as remaining emitters chase compliance permits
Korean 2017 allowances fell slightly on Tuesday but held above $20 as a few companies that are yet to surrender permits for last year dipped into the market to pick up a modest 57,000 KAUs.
The Massachusetts House and Senate approved a bill in the waning hours of the 2018 legislative session on Tuesday that increases the state’s Renewable Portfolio Standard (RPS), but it omitted carbon pricing and several clean energy provisions that both the Senate and environmental advocates had pushed for.
US states and wholesale energy market operators should work towards implementing or expanding regional market solutions as the best way to achieve emissions reductions in the power sector, according to a discussion paper released Monday.
European carbon prices rocketed back towards recent highs on Tuesday after a strong auction result erased early weakness.
CARBON FORWARD 2018
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BITE-SIZED UPDATES FROM AROUND THE WORLD
How prepared are they? – India is working on new approaches to help cut its carbon emissions, and the Bureau of Energy Efficiency is now planning on setting up a state energy efficiency preparedness index, reports Livemint. The index will include indicators such as policy and regulations, financing mechanisms and institutional capacity, and is meant to help streamline state actions and channel their efforts, one BEE official said.
Plea reveal – The US Supreme Court on Monday refused a Trump administration plea to halt proceedings on a landmark youth climate lawsuit that argues the government needs to take stronger action on global warming. Although the court order did not say how the judges voted, the Monday notice did acknowledge criticisms of the case – originally brought on by 21 child and young adult plaintiffs in 2015 – stating that the breadth of the respondents’ claims “presents substantial grounds for difference of opinion”. The case is still pending in the District Court for the District of Oregon, where the Supreme Court instructed those judges to consider their notice. (The Hill)
Big ask – Large manufacturers are running into an uphill battle persuading President Trump to back the Obama-era Kigali Amendment to the Montreal Protocol, which will phase out the global use of HFCs over the next few decades. According to Axios, it’s proving hard for them to convince a Republican who abhors regulations, dismisses climate change, and dislikes global accords to embrace a policy that combines all three. It’s also the latest example of industry running into surprise trouble convincing Trump to back policies businesses support, like free trade. Trump administration officials are concerned about costs to consumers who use appliances affected by the policy, including air conditioners and refrigerators. They’re also critical of some of the tactics industry has employed in lobbying, according to multiple current and former government officials.
Impact assessment – A new route proposed for the Keystone XL pipeline would only have “minor to moderate impacts” on the environment and native lands, according to an Environmental Assessment released by the State Department on Monday. The document comes as a response to the Nebraska Public Utilities Commission’s decision last year to allow pipeline owner TransCanada to build the controversial project on a route longer than the one previously approved by the Trump administration. Environmental and native rights groups criticised the review after pushing for the government to carry out a more thorough Environmental Impact Statement, and TransCanada has not said if it still believes the project is financially viable. Separately, the US FERC is weighing how much consideration it should give climate change when approving natural gas pipelines, but the proposition’s path forward is murky, Bloomberg reports. Amid the US shale gas boom, agency chairman Kevin McIntyre, a Republican, agreed to reopen the agency’s nearly 20-year-old policy statement on approving new natural gas pipelines. It’s a surprise move in an administration that has largely rolled back the Obama administration’s climate change efforts. It prompted more than 2,400 comments by the July 25 deadline, with industry groups arguing the current process works well. (Climate Nexus)
Small dip – Energy consumption in Germany decreased by 1% in the first half of 2018 compared to the same period in the previous year, the energy market research group AG Energiebilanzen said on Tuesday. After the first three months, there had been a 5% increase due to the very cold weather in February and March, but the following warmer months made up for this. In the half-year reports of 2017 and 2016, the AG Energiebilanzen recorded an increase in energy usage, so 2018 marks the first year where consumption has fallen in a year-on-year comparison. Although the share of renewables has increased to 14% in primary energy consumption in the first half of 2018, the majority of energy (around 79.6%) is still supplied by fossil fuels. Separately, German power prices will trade in a range of €35-45/MWh until 2022 amid a loss of conventional capacity and “moderate” prices of coal and carbon, Moody’s said on Tuesday in a note. “Baseload power prices will be influenced by the amount of capacity leaving the market, which will include all nuclear capacity and some conventional thermal capacity,” the agnecy said. Germany plans to exit all nuclear power by 2021 and is currently discussing decommissioning coal-fired plants. In the futures market, prices for calendar-year baseload power over the next three years currently ranges from around €40-44/MWh. (Clean Energy Wire, Montel)
Let’s get closer – French President Emmanuel Macron said increased power links with Spain can be part of a bigger plan for reducing carbon emissions in energy generation, Bloomberg reports. “The issue of energy interconnections needs to be seen within a broader strategy of sovereignty and the much broader energy transition,” Macron said in Lisbon on Friday evening. He reiterated that France plans to close coal plants by 2022. Macron spoke at a joint press conference with Portuguese Prime Minister Antonio Costa and Spanish Premier Pedro Sanchez following a meeting between the three countries about improving energy interconnections between the Iberian Peninsula and the rest of Europe.
How to price it – The political feasibility of carbon prices depends less on their cost efficiency and benefits to the economy, but much more on their acceptability to the population, according to a new study. In order to increase the latter, earmarking revenues, a transparent tax policy and the compensation of low-income households – for example by an annual cheque for each citizen – are particularly important. These are the results of the new study “Making Carbon Pricing Work for Citizens” published by researchers from the Mercator Research Institute on Global Commons and Climate Change (MCC) together with scientists from Oxford University, the London School of Economics and other institutions in the journal Nature Climate Change. The scientists show different ways that sufficiently high carbon prices could be politically implemented: Among other things, a transparent communication of the costs and benefits of a carbon tax reform as well as the careful consideration of social and economic circumstances in different regions are key. Depending on these circumstances, tax revenues could, for example, be redistributed to the population via an annual payment to each citizen or finance a reduction in corporate taxes to increase productivity. Such recycling schemes would increase public acceptance of climate policy.
Update! – Carbon Tracker Initiative has updated its 2 degrees of Separation report, published in June 2017, which ranked 69 of the largest oil & gas companies’ exposure to climate risk. As expected, there have been some material moves in relative positioning since the previous report, with the reasons varying but generally falling into one or more of several broad themes:
1. Corporate Activity – such as asset divestment and acquisition
2. Data Update – such as changes to break even cost
3. Methodology tweaks – such as limited inclusion of high-cost projects
Check out the update here.
Penguin problems – The world’s largest king penguin colony has shrunk nearly 90% since the 1980s, with climate change potentially playing a role in the decline. According to new research published in the journal Antarctic Science, aerial and satellite images showed that breeding pair numbers plummeted by 88% over the past 30 years. A key factor in the drop may have been a particularly strong El Nino in 1997, which warmed the southern Indian Ocean at a rate that pushed the fish and squid population that the penguins fed on beyond their foraging range. (BBC, Carbon Brief)
And finally… Play the wild Rovers – An English football league team has been declared carbon-neutral by the UN. Gloucestershire-based Forest Green Rovers, who are currently in Sky Bet League Two, are the first football team to sign up to the UNFCCC’s voluntary offsetting Climate Neutral Now programme for the upcoming season. The initiative, launched in 2015, allows companies, organisations, governments, and citizens to reduce their carbon footprints through buying carbon offsets through the CDM. This is Rovers’ latest commitment to being environmentally friendly. Two years ago, the club, which is based in Nailsworth, near Stroud, became the world’s first vegan football club. (Sky News)
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