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CARBON FORWARD 2020
No EU carbon border adjustment mechanism (CBAM) option under consideration will be exempt from a potential WTO challenge, industry representatives told the Carbon Forward 2020 conference on Thursday, adding that “nitty-gritty” details will determine compatibility with international trade rules.
The EU carbon market could be on the verge of breaking into a much higher price range above €30 based on a strengthening bullish consensus amongst investors, experts said at this week’s Carbon Forward 2020 conference, predicting that several new breeds of EUA buyers could lead the way.
The 27-nation European Council is willing to find a compromise with poorer EU countries in order to agree a 2030 emissions reduction target of 55% by year-end, draft summit conclusions show, as some governments that were previously reluctant start to get on board with the European Commission’s proposal.
Launching a UK carbon market and linking it to the EU ETS within the next 18 months, all while maintaining coverage on UK-based installations, “is doable”, the European Commission’s former top climate official said Thursday.
EUAs fell below €25 to their lowest since mid-June on Thursday, testing a key technical support as more COVID-19 restrictions and a Brexit talks impasse spurred selling.
New Zealanders go to the polls this Saturday, and while it looks like Prime Minister Jacinda Ardern will win re-election by a landslide the specifics of the results may still have important impacts on how the government handles the emissions trading scheme over the next three years.
RGGI allowance (RGA) prices neared the $7 mark this week on heightened speculator interest and bullish expectations for the post-2020 emissions trading programme, as California Carbon Allowance (CCA) values gained ground on the WCI carbon market’s 2021 auction reserve price.
The US Federal Energy Regulatory Commission (FERC) on Thursday said it has the authority to consider subnational proposals to incorporate carbon prices into wholesale electricity markets, but called for input on how certain details could fall within the agency’s jurisdiction.
US agriculture technology company Indigo Ag on Wednesday announced that nine domestic and multinational businesses will purchase carbon credits for sequestering GHGs in soils, with the price coming in on the high end of global voluntary offset market values.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Drop and drag – Global CO2 emissions fell by 8.8% in the first six months of this year due to the effects of coronavirus-related restrictions, marking the biggest drop for a first half-year period on record, a study showed. The research, published in the journal Nature, said emissions fell by over 1.5 bln tonnes during H1 2020 compared to the same period last year. The reduction is larger than for any economic downturn and the annual decrease in GHG output during World War II, although mean emissions are much bigger now than at that time. (Reuters)
South to squeeze – Vulnerable nations are being squeezed between mounting debt to respond to the economic and health impacts of the coronavirus pandemic and the need for longer-term investments to address the climate crisis. While the world’s advanced economies have spent an estimated $12 trillion on stimulus packages, fragile and indebted economies in Africa and Latin America are struggling to meet basic needs. In Angola and Belize, senior government officials told Climate Home they were facing tough choices on how to spend their budget, with climate action at risk of cuts to protect spending on access to food and water, health, and education.
Not zero yet I – Reports last month that South Korea has committed to a net zero emissions target by 2050 have created some confusion, as that pledge was just a motion backed by parliament, but is not yet government policy. The environment ministry clarified Thursday that after a wide-reaching public consultation period that has been going for months, a council with representatives from 15 ministries will hold a debate on the nation’s path to becoming a low-carbon society on Oct. 17 at 1300 local time, and will be broadcast live on the ministry’s YouTube channel. When the council has finalised its draft proposal for a future low-carbon strategy it will be subject to a public hearing due in November. After further input from the Green Growth Committee and the State Council, the plan will be finalised and submitted to the UNFCCC in the form of an updated NDC by the end of the year.
Not zero yet II – Pressure on the Australian government to set a net zero target is increasing, with the majority of major emitters, industry associations, experts, and civil society groups backing such a goal for 2050. Most recently, Federated Farmers announced its own net zero target, with support from most of the agriculture sector. But the government has held out against the net zero goal, with Agriculture Minister David Littleproud this week calling the farming group’s target “a journey that is fictional”, and said the ruling Coalition won’t back it because it will achieve nothing and it would be up to the government to explain to voters who would have to pay for it. (The Land)
On track – EU countries largely make good progress towards reaching their existing energy and climate targets for 2030, said the European Commission in a series of reports released on Wednesday. Several member states – such as Germany, France, Austria, and the Netherlands – are projected to fall short of achieving their national GHG reduction targets with existing measures, but others, including Croatia and Spain, are set to overachieve theirs. While the EU is on track to overshoot its current target of reducing emissions by 40%, raising it to at least 55%, as proposed by the Commission, would require significant additional efforts by the member states. EU nations are also set to overachieve by a short margin their renewables target for 2030, currently fixed at 32% of the bloc’s total energy mix. (Clean Energy Wire)
Looming outages? – National Grid has warned that Britain’s electricity will be in short supply over the next few days after a string of unplanned power plant outages and unusually low wind speeds this week, The Guardian reports. The warning is the second from the electricity system operator in recent weeks. In mid-September the company issued an official warning to the power market that its ‘buffer’ of power reserves had fallen below 500 MW and it may need to call on more power plants to help prevent a blackout. Since 2015, National Grid’s greatest challenge has been an oversupply of electricity which has threatened to overwhelm the grid during times of low electricity demand. The system operator has already spent almost £1 bln on extra measures to prevent blackouts over the first half of the year by paying generators to produce less electricity during the coronavirus lockdown.
Quests for the grail – French consultancy Capgemini has come up with a list of 55 “technology quests” – everything from floating wind to ammonia-fuelled ships and insect protein – that it says will not only help Europe meet its carbon-free target, but also boost the continent’s post-COVID economy. Notably, nuclear power, nuclear fusion, and blue hydrogen derived from methane with CCS are all absent from the list. (Recharge News)
And finally… Can hardly Barrett – US Supreme Court justice nominee Amy Coney Barrett, for the second time in as many days, denied the scientific consensus on human-caused climate change during her Senate confirmation hearing Wednesday. In response to a line of questioning from California Senator and vice presidential nominee Kamala Harris (D), Barrett agreed COVID-19 is infectious and that smoking causes cancer, but then said climate change is “a very contentious matter of public debate”. Barrett’s denial came just a day after she said, “I’m certainly not a scientist … I’ve read things about climate change. I would not say I have firm views on it.” Barrett’s answer mirrors language often used by Republican politicians who seek to avoid outright climate denial. “For [Barrett] not to have firm views on climate change is almost unbelievable,” Ann Carlson, a faculty director of the Emmett Institute on Climate Change and the Environment at UCLA School of Law, told the New York Times. Barrett’s answer, Carlson said, “seems like a pretty strong signal to those in the know that she is sceptical of regulating greenhouse gases.” Others were starker in their assessments. “You either accept science or reject it. Amy Coney Barrett repeatedly refusing to accept climate science further proves that she is unfit to serve on the Supreme Court,” said Sierra Club Democracy Program Director Courtney Hight. Bob Percival, director of the environmental law programme at the University of Maryland, agreed. “Her response suggests that she either is a climate change denier or someone who is afraid of offending the President and his supporters in the fossil fuel industry,” he told E&E. If confirmed next week, Barrett could tip the balance of the Supreme Court on myriad climate and environmental issues. (Climate Nexus)
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