Presenting CP Daily, Carbon Pulse’s free newsletter. It’s a daily summary of our news plus bite-sized updates from around the world. Subscribe here
RGGI allowance (RGA) prices rose early on Wednesday as market participants took a bullish view of Democrats securing a majority in Virginia’s legislature Tuesday night, a feat that could allow the state to join the regional ETS in 2021.
China is likely to opt for the softer range of the proposed emission benchmarks for coal-fired power plants set to be brought into the national cap-and-trade programme next year as power companies baulk at the most ambitious options, according to observers.
Quebec’s WCI-regulated emissions saw meagre year-on-year growth in 2018, as reductions in the electricity sector minimised gains seen from transportation, according to data released by the environmental ministry this week.
California emitters fully complied with surrendering compliance instruments against 30% of their 2018 GHG output at the state’s Nov. 1 interim cap-and-trade deadline, ARB officials said.
Transportation and Climate Initiative (TCI) stakeholders and observers remain split on where to assign compliance obligations and whether to regulate biofuels under the potential cap-and-invest programme in the US Northeast and Mid-Atlantic regions, according to public comments.
EUA prices sank below €25 on Wednesday as a technical support was breached amid pressure following a bumper auction and signs that the European economy is barely responding to recent stimulus efforts.
Two more installations have picked up EU ETS-related fines by the UK government.
The UN’s CORSIA aviation offsetting scheme is just over a year away from entering into force, but a myriad of supply- and reputation-related concerns is clouding the horizon for airlines and investors, not least the fact that it remains unclear exactly which credits will be eligible.
BITE-SIZED UPDATES FROM AROUND THE WORLD
We’re in trouble – A report by 11,258 scientists from a range of different disciplines across 153 countries warns that the planet “clearly and unequivocally faces a climate emergency,” according to the Washington Post. The “viewpoint”, published in the journal Bioscience and covered widely by news outlets around the world, also provides six key policy goals that will be vital to addressing this challenge. After analysing 40 years of data on a range of measures, the authors’ conclusion is that governments are failing to adequately address the crisis facing them. “Profoundly troubling” trends include the amount of meat consumed per person, the number of air passengers, and global tree cover loss, as well as carbon emissions and fossil fuel consumption. The researchers involved are members of the Alliance of World Scientists, and are pushing strategies including leaving remaining fossil fuels in the ground and pursuing negative emissions, for examples by “enhancing natural systems”. They also suggest that more should be done to stabilise – and “ideally gradually reduce” – human population growth, with the global number “currently increasing by over 200,000 people a day”. (Carbon Brief)
And we’re not doing nearly enough – The world is on a path to climate disaster, with three-quarters of the commitments made by countries under the Paris Agreement “totally inadequate”, according to an analysis published by the Universal Ecological Fund. Of the 184 NDCs made, 136 are judged insufficient in the report. Only the 28 countries of the EU and a few others including Norway, Switzerland, and Ukraine are on track with their commitments, it added. Four nations currently produce half of all CO2 emissions, but of them the US has gone into reverse in terms of its climate action, and Russia has failed to make any commitment to cutting at all. China and India are cleaning up their energy systems, but their surging economies mean their GHGs will continue to grow for a decade, while other major oil-producing nations, including Saudi Arabia, UAE, and Kuwait have set no reduction targets for themselves. Another problem, it says, is many pledges are unlikely to be met, due to the US withdrawing from Paris, Brazilian President Jair Bolsonaro undoing environmental policies, or because poorer nations do not get the funding they need from the GCF, with the US and Australia halting their contributions. (Guardian)
Fund blunders – California and Colorado’s public pension funds together lost out on over $19 billion over the past decade by investing in fossil fuel stocks, according to a report released on Tuesday. The three public pension funds analysed are currently worth a combined $663 bln. However, if they’d divested from fossil companies in 2009 while keeping their other investments at the same proportions, they could have amassed a combined additional $19 billion in 10 years, the report published by Corporate Knights, a Canadian media, research and financial firm, concludes. Two of the funds – CalPERS and CalSTRS – invest on behalf of roughly 2.8 mln California public employees, including teachers, firefighters and municipal workers, while the third – PERA – invests on behalf of 600,000 Colorado public employees. The fossil fuel-linked losses work out to $2,900 per member in Colorado, $5,572 per member of CalSTRS, and $6,072 per CalPERS member, the report adds, finding that the portfolio hit to CalPERS was $11.9 bln, with $5.5 bln in losses to CalSTRS and $1.77 bln to PERA. (DeSmog)
Trading time bomb – The carbon pricing system for heating and transport fuels planned by Germany could prove to be a legal “time bomb” and lead to billions of euros in reclaims if the country’s Constitutional Court decides the levy is unlawful, climate policy research institute IKEM said in a report on the scheme’s legal implications. IKEM said the planned law for fuel emissions trading that is part of Germany’s Climate Action Programme 2030 can neither be classified as skimming off of profits – as no pricing cap is planned in an initial phase until 2026 – nor as a consumption tax since the costs for allowances will be allocated to consumers even though these are not the ones using them. Moreover, the price cap prevailing by 2027 “could lead to a price explosion for which companies cannot prepare”, the researchers said. The IKEM report proposes shortening the CO2 price’s introduction phase and abolishing the subsequently planned price corridor to turn it into a legally sound consumption tax. (Clean Energy Wire)
Shelved – The Flemish government has dropped the idea of introducing a tax on CO2 emissions, according to local media. Although a tax on CO2 emissions was not mentioned in the Flemish government agreement, the idea was still a potential option for the government’s climate policy moving forward, The Brussels Times reports. Employers, energy suppliers, trade unions, and environmental activists recently called for further research into the idea – the details of which were unclear. However, the Flemish government recently told the European Commission that it was dropping any plans for a carbon tax.
Sasol’s strategy – South African petrochemicals giant Sasol – the country’s second largest polluter – is targeting a 10% reduction in its GHG emissions by 2030, bringing its current 56 Mt per year of emissions down to 50 mln. The company last month published its inaugural climate change report, as part of a broader sustainability journey, and it is aligning itself with the recommendations of the Task Force on Climate-related Financial Disclosures. Additionally, the company is working on an emission reductions roadmap, which will be published by Nov. 2020 and will establish a long-term target and set out an implementation strategy from 2021 that will include budget aspects and executive remuneration targets. Some solutions will include using alternative feedstocks, such as gas, as well as looking at capital allocation and maintenance towards acquiring more efficient equipment. Some 85% of Sasol’s emissions profile is in South Africa, particularly in the chemicals complex in Secunda. The coal-to-liquids facility is an energy-intensive, multi-step process that converts coal to liquid fuels and chemicals, and emits the equivalent of four coal-fired power stations. To put this into context, the facility makes up 10% of South Africa’s emissions, and with the country’s share of worldwide emissions at around 1.3%, means the plant makes up some 0.13% of the global total, or roughly 1/700th. (Mining Weekly)
Sham-paign – The aviation industry is preparing a campaign it hopes will counter a ‘flight shaming’ movement that has weakened demand for air travel. Global lobby IATA, which represents nearly 300 airlines, is coordinating the effort, which will also involve industry stakeholders including ATAG. “We will launch a very, very big campaign … to explain what we have done, what we are doing, and what we intend to do in the future,” IATA’s head Alexandre de Juniac told Reuters. They will try to explain to the public how the industry is reducing its environmental impact, countering what de Juniac said had been “misleading information”. The industry claims to have halved its emissions per passenger since 1990, largely thanks to more fuel-efficient aircraft, and it has a plan to cut net CO2 by 2050 and to achieve carbon-neutral growth from international aviation from 2020 through its CORSIA offset mechanism.
Another lawsuit – Honolulu officials are planning to sue fossil fuel companies over their alleged role in climate change. The lawsuit set to be filed against the companies aims to hold them “accountable for the costs and consequences” of climate change, according to Hawaii News Now. Honolulu Mayor Kirk Caldwell (D) announced the move at a press conference Tuesday, alleging that fossil fuel companies have known for decades about the impacts their businesses have on the climate. The move follows a similar one made by Maui County in an effort it made to seek compensation for the mounting costs of climate change. A resolution calling for support of the lawsuit is set to go before the full city council. If that passes, the city will then seek outside counsel on a contingency basis, meaning there will be no legal costs to taxpayers. It was not immediately clear which fossil fuel companies the city of Honolulu planned to name in its suit. (The Hill)
Carbon tax reopened – The Philippines’ environment ministry is ‘studying’ a carbon tax as a means to increase government revenue and bring down greenhouse gas emissions, a senior official told the Business Inquirer. The nation has been considering such a move before, but in November last year decided against it, saying it would be unpopular while also ineffective at cutting carbon.
To the moon – Washington DC-based Derivatives exchange Nodal Exchange announced it saw record trading on its North American environmental futures contracts in October as 13,335 lots exchanged hands during the month, representing 7.2% of market share. While the company did not break that total figure down by individual contracts, Nodal has listed numerous WCI, RGGI, and renewable energy certificate contracts as part of its collaboration with Chicago-based product development firm IncubEx.
Highly RECcomended – Evolution Markets will host a Renewable Energy Certificate (REC) on behalf of the Massachusetts Clean Energy Center (MassCEC) on Nov. 13, the brokerage announced Wednesday. MassCEC plans to offer 6,915 Vintage 2019 Massachusetts Class I Renewable Certificates generated in the first and second quarters of 2019 from five separate projects.
And finally… Extinction reprieve – The UK’s High Court has overturned a city-wide protest ban against Extinction Rebellion protests, rendering illegal arrests that took place under it. It said the Met Police had used powers beyond the reach of the law, Section 14 of the 1986 public order act, which can only apply to single assemblies. The judges ruled that the movement’s uprising, which brought much of central London to a standstill last month, constituted multiple, physical assemblies despite being organised under the umbrella of one movement. (Climate Home)
Got a tip? Email us at firstname.lastname@example.org