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TOP STORY
California carbon market emissions fall nearly 3% in 2019
California fuel sector GHGs under the state’s WCI-linked cap-and-trade programme emissions dropped for the second consecutive year in 2019, with the power sector adding to the Golden State’s year-on-year programme-wide decline while natural gas bucked the trend.
AMERICAS
US Election Roundup: Presidential vote count continues, as Republicans primed to hold Senate
US election results remained too close on Wednesday to decipher whether President Donald Trump or Democratic nominee Joe Biden will take the Oval Office next year, though Republicans appeared all but certain to hold the Senate – in a blow to the future of national climate legislation.
Minnesota council recommends state develop LCFS proposal in 2021
Minnesota should implement a Low Carbon Fuel Standard (LCFS) to help meet the Midwestern state’s GHG reduction and biofuels goals, a governor-appointed council said Tuesday.
ASIA PACIFIC
Analysts see limited upside potential for South Korean CO2 prices
Korean CO2 allowance prices might move slightly up from current levels of 22,500 won ($19.70) during the 2020 compliance cycle, but will get nowhere near the highs seen in the first few months of this year amid sizeable over-supply, analysts said Wednesday.
EMEA
EU Market: EUAs retake €25 on short-covering, reports suggesting Biden win
EUAs surged to a seven-day high above €25 on Wednesday, extending their recovery rally as financial markets rose despite an undecided US presidential election.
EU ETS-financed Modernisation Fund among “main tools” to reach net zero, Visegrad diplomats say
The EU’s €14 billion Modernisation Fund should be expanded to support cleaner energy and industry in poorer member states as the bloc moves towards higher climate ambition, envoys from Central European nations said on Wednesday.
COMMENT
MARCU MY WORDS: The importance of the Article 6 Guidelines to the success of the Paris Agreement
The absence of the Article 6 Guidelines creates uncertainty for the accounting treatment of assets in the emerging carbon market under the Paris Agreement as well as for other related markets. The importance of the international accounting treatment cannot be overstated.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
*Carbon Pulse is organising and moderating a series of side events at the IETA-ICAP Carbon Markets Virtual Pavilion on Nov. 11-12, including sessions on the EU ETS, China, Canada, RGGI, and carbon as an investible asset class. The full event programme also offers high-level discussions and interactive sessions, along with an informal carbon markets networking area for people to connect and stay in touch. Registration is free and open to the public, but spaces are limited for the Carbon Pulse side events so sign up now!*
Emily (not) in Paris – The US formally exited the Paris Agreement on Wednesday, fulfilling a promise by President Donald Trump to withdraw the world’s second-largest GHG emitter from the UN pact to fight climate change. Trump first announced his intention to withdraw the US from the agreement in June 2017, arguing it would undermine the country’s economy. The administration formally served notice of the withdrawal to the UN on Nov. 4, 2019, which took one year to take effect. The departure makes the US the only country of 197 signatories to have withdrawn from the 2015 agreement, although Democratic presidential candidate Joe Biden has said he would re-join the pact on “day one” of his administration. The presidential race remained too close to call on Wednesday, with multiple swing states still counting ballots as of Wednesday afternoon. (Reuters)
Bezos bucks – Jeff Bezos, CEO of tech giant Amazon, will begin giving the first round of grants from his $10-bln “Bezos Earth Fund” to a variety of US-based environmental groups, The Atlantic reports, citing anonymous sources. The fund, announced in February, will distribute $100 mln each to The Nature Conservancy, the Environmental Defense Fund, the Natural Resources Defense Council, the World Wildlife Fund, and the World Resources Institute. Grants of $10 mln to $50 mln will be given for the Energy Foundation, the Union of Concerned Scientists, the ClimateWorks Foundation, and the Rocky Mountain Institute. (Axios)
New Qid on the block – Qatar Airways is the latest carrier to launch a carbon offsetting programme, allowing for passengers to voluntarily compensate the emissions associated with their journey at the point of booking. The initiative, announced Tuesday, is built on a partnership with trade group IATA’s Carbon Offset Programme and climate and sustainable development experts ClimateCare. The offsets will contribute to the Fatanpur Wind Farm project in India, consisting of 54 wind turbines and a combined output of 108 MW, which has the potential to avoid 210,000 tCO2e annually.
Sukuk on this – Separately but not unrelated, regional rival Etihad Airways has issued a $600-mln, five-year unlisted “transition sukuk” to finance its shift to a greener future, which it says is the first of its kind and the first sustainability-linked bond from the high-emitting airline industry. The UAE flagship carrier claimed another first for sustainable finance with an unusual framework that allows it to issue either project-specific “use-of-proceeds” deals, or sustainability-linked instruments that tie financing costs to achieving company-wide ESG targets. As the deal is a sharia-compliant bond issue, failure to meet the targets will trigger a penalty clause linked to purchasing carbon offsets in addition to its requirements under CORSIA, rather than the 25-basis-point coupon step-up seen on sustainability-linked bonds for companies such as Italian electricity generator Enel and Brazilian pulp and paper company Suzano, as the rapidly developing market continues to expand. Bankers said state-owned Etihad opted for the structure to show its seriousness about sustainability and to overcome scepticism about a difficult sector that many investors view as inherently unsustainable. Etihad’s sukuk deal supports its pledge to reach net zero emissions by 2050 via carbon reduction targets that it says will see the airline halve its 2019 emissions by 2035. It has also pledged to cut emissions intensity in its passenger fleet by 20% by 2025. (IFR)
A one-time thing – Emissions from the global energy sector will be 7-8% lower in 2020 than in 2019, but most nations are still failing to align their energy generation and consumption patterns with long-term climate targets, Capgemini warns. The consulting firm’s World Energy Markets Observatory report for 2020, published Tuesday, notes that this decrease is unprecedented – emissions from the sector fell just 0.4% year-on-year in 2019 – but unlikely to last. Capgemini believes emissions will “likely rise again” as mobility restrictions ease, with nations largely failing to decouple GDP growth from energy-related emissions. The report provides a string of policy recommendations for markets with net zero targets, including calls for a “meaningful carbon price” and clarity on price trajectories in the mid and long-term. (edie)
Beefing up – A coalition of UK health professions has called for a climate tax to be imposed on food with a heavy environmental impact, such as red meat or dairy products, by 2025 unless the industry takes voluntary action on the impact of their products. According to the UK Health Alliance on Climate Change’s (UKHACC) latest report, taxes on plastic bags and sugary soft drinks had shown such policies can reduce harmful activities, and a food carbon tax could make a similar impact. The UKHACC report makes a series of recommendations including a swift end to buy-one-get-one-free offers for food that is bad for health and the environment, and for perishable foods that are often wasted. (The Guardian)
Engie times – France-based electric utility Engie said Tuesday it has halted talks over a potential long-term supply agreement with US liquefied natural gas developer NextDecade, with the company having come under pressure not to import LNG produced from shale gas. Engie in late October said it needed more time to consider any future agreement with NextDecade after it was reported that the French government and environmentalists were putting pressure on the partly state-owned company not to agree a deal because it did not conform to the country’s climate change goals. (S&P Global Platts)
And finally… What’s their secret? – Debates about the causes of climate change, which dominated discussions on German language social media at the start of the millennium, have now largely vanished, according to an analysis by consultancy Vico. In cooperation with Stuttgart Technical University, the consultancy analysed 7,200 randomly chosen posts in German on social networks (Facebook, Instagram, Twitter, YouTube), blogs, forums, news, as well as Q&A portals between February and June this year. The researchers found a strong “home focus” in the discussions. Issues most often discussed were global warming (24%), weather extremes (11%), and species loss (10%). “The long-standing discussion of causes has become a marginal topic and only takes place on a few particularly exposed portals,” Vico found. Instead, social media debates on climate change have become much more emotional in recent years on comparison to an earlier study from 2003 to 2007. (Clean Energy Wire)
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