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ANALYSIS: German strategy to cancel EUAs to offset coal phaseout may come down to interpretation, resolve
Doubts are growing that Germany’s proposed plan to cancel a large quantity of EU carbon allowances based on its coal phaseout may not give a neutral price signal for the bloc’s ETS, as modelling difficulties and loosely-worded guidance may test Berlin’s resolve.
Power sector emissions covered under the northeast US RGGI carbon market increased by almost 7% last year despite falling in Q4, marking only the second time in the programme’s history that yearly CO2 output has accelerated.
New York state lawmakers reintroduced an omnibus climate change bill on Thursday that allows for a market-based mechanism to help achieve enhanced GHG reduction targets, with legislators standing better odds of passing the proposal in 2019 after Democrats took control the upper chamber this year.
US carbon prices on both coasts experienced relatively little movement this week, with RGGI allowances (RGAs) slightly increasing as an entity shifted positions on the secondary market while California Carbon Allowances (CCAs) dipped on thin activity.
A group of Japanese companies have scrapped plans to build a coal-fired power plant that would have emitted some 12 million tonnes of CO2 annually, and are considering constructing a gas-fired plant in the same location.
European carbon prices lost ground today amid falling power prices and ahead of Germany’s first auction for almost three months.
BITE-SIZED UPDATES FROM AROUND THE WORLD
A Green New Development – US Congresswoman Alexandria Ocasio-Cortez and Senator Ed Markey – both Democrats – are set to unveil legislation laying out a Green New Deal as soon as next week, Axios reports. A spokesperson for Markey confirmed the offices are working on legislation, but said there is no final text and timing isn’t set. Varshini Prakash, co-founder of the Sunrise Movement, also said legislation might come mid next week. It’s unclear to what extent the proposal will adhere to a document circulating that describes the policy in broad strokes and dates back to last year. The draft is a broad-brush template for a sweeping climate, energy and economic plan that includes: a transition to 100% renewable electricity, massive federal investment in cutting greenhouse gases, a federal jobs guarantee for people working in the low-carbon transition, and more. Experts say any such proposal is dead on arrival in Congress, but it is intended to show that advocates and lawmakers are laying down markers for how Democrats might tackle climate change if they regain control of Washington in the 2020 elections.
Schmidt fits – The Chilean government has nominated environment minister Carolina Schmidt to lead the UN’s COP25 in the country next January. Schmidt would be the first woman in eight years to hold the position of president-designate to the annual UN climate summit, and she told a local outlet that she fought doggedly for Chile to host the conference after Brazil withdrew its nomination last fall. Previously head of Chile’s National Office for Women, Schmidt is aiming to present parliament with the country’s first climate legislation in August, though few details have emerged. The dates and venue for COP25 have also yet to be announced. (Climate Home)
No saint Bernard – The new chairman of the UK’s principal climate science denier campaign group holds investments in a number of fossil fuel companies, including those building controversial oil and gas pipelines in Canada. Labour peer Lord Bernard Donoughue was handed the reins of the Global Warming Policy Foundation (GWPF) after former Chancellor Nigel Lawson stepped down earlier this month. The GWPF has provided a platform to opponents of action on climate change for more than 10 years. According to DeSmog UK, Donoughue’s 30 shareholdings include four investment funds that list BP and Shell in their top five holdings, while another fund has shares in ExxonMobil. The House of Lords’ latest Register of Interests also shows another of his fund holdings invests heavily in oil and gas infrastructure in the US and Canada, including the controversial Kinder Morgan and Keystone XL pipelines.
Higher and higher – Robert Gibbins, head of Autonomy Capital, says he expects EU carbon allowances, the *hottest* commodity of 2018, to move higher. Speaking to Financial Adviser Magazine, Gibbins says EUAs, now trading around €23, could climb to at least €35, the price at which he estimates they would begin to do their job of destroying the viability of coal and other dirtier sources of energy.
LaFleur flight – US Federal Energy Regulatory Commissioner Cheryl LaFleur will not seek a third term at the agency when her term ends later this year, meaning the body will lose its longest-serving member and only regulator with experience at an electric utility. An advisor to the commissioner said that Senate leaders told LaFleur this week that she would not be renominated for the position, but he declined to detail the nature of the conversations. That will leave the White House to nominate a replacement for both LaFleur and deceased former Commissioner Kevin McIntyre. No one political party can hold more than three seats on the five-member FERC, meaning that the current regulator’s future makeup of two Republicans and one Democrat requires the Trump administration to nominate one from each party. (Utility Dive)
Following suit – Colorado’s new attorney general said Wednesday the state will withdraw from a lawsuit challenging the Obama administration’s Clean Power Plan, the Denver Post reports. Democrat Phil Weiser’s announcement signalled a reversal from his predecessor, Republican Cynthia Coffman, who signed Colorado on to a multi-state suit seeking to roll back the EPA programme. Michigan’s new Democratic government also pulled out of the lawsuit earlier this month. Weiser said Colorado would join two other multi-state suits: one trying to block the Trump administration from rolling back tougher car mileage standards, and another that would preserve the right of individual states to impose higher mileage standards than the federal requirements. Separately, the EPA will reschedule a public hearing and extend the comment period for its proposal rolling back CO2 emissions limits for future coal-fired power plants because of the government shutdown, Politico reports.
We’ve got your back – Elsewhere, Rhode Island Senator Sheldon Whitehouse and eight state attorneys general are throwing their support behind a California lawsuit that challenges Chevron and dozens of other other fossil fuel companies for knowingly contributing to climate change. Whitehouse and the AGs from California, Maryland, New Jersey, New York, Oregon, Vermont, Washington, and Rhode Island filed separate amicus briefs to the 9th Circuit Court of Appeals on Tuesday. The briefs support the state’s regional plaintiffs, who want to keep the suit against the companies in California. (The Hill)
(Mari)Time to act – The Nova Scotian capital of Halifax this week became the second Canadian city to declare a climate emergency. Though the city council’s declaration is unlikely to mobilise any additional provincial or federal funds, the municipality will use the order in preparing changes to its climate change action plan due this fall. The decision follows Vancouver’s city council also endorsing a climate emergency earlier this month. (Global News)
It pays to be loyal – Scandinavian air carrier SAS will introduce a new carbon offset scheme on Feb. 1 that encompasses all tickets booked through its loyalty programme EuroBonus. The company said carrying out that approach will offset 40% of all passenger-related CO2 emissions, on the way to SAS’ goal of cutting its total emissions 25% by 2030. SAS said that offsetting covers almost 4% of its passenger CO2 emissions, and the EuroBonus programme has 5.6 million members. (FlightGlobal)
CO2-hoarding superplants – Scientists at the US’s Salk Institute aim to create the “Ideal Plant” to help curb global warming. They are talking to seed companies and preparing to do tests on major agricultural crops such as wheat, soy beans, corn, and cotton to eventually introduce the plant worldwide. One idea they have revolves around genetically engineering a plant to hold CO2 in the ground in what could be a less radical form of climate geoengineering. (Financial Times)
Don’t block it out – Joseph Pallant, founder of Blockchain For Climate and Carbon Project Solutions, discusses the carbon market and specifically putting the Paris Agreement on the blockchain with OST Live. He says the big opportunity for blockchain pertains to avoiding double counting of the emission reductions achieved under countries’ Nationally Determined Contributions. The objective of his organisation and others doing similar pioneering work is to “go from a single-source database, custom-build tool to track this really important future commodity (ITMOs), and utilise this really vibrant, beautiful tool in blockchain,” with the additional benefits of transparency, security, and immutability. (YouTube)
And finally… Genocide green – Colonisation of the Americas at the end of the 15th century killed so many people, it disturbed Earth’s climate. That’s the conclusion of scientists from University College London, who say the disruption that followed European settlement led to a huge swathe of abandoned agricultural land being reclaimed by fast-growing trees and other vegetation. This pulled down enough CO2 from the atmosphere to eventually chill the planet and create a cooling period often referred to in the history books as the “Little Ice Age” – a time when winters in Europe would see the Thames in London regularly freeze over. (BBC)
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