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ANALYSIS: Dems’ Senate win improves US climate prospects, but comprehensive measures still seen out of reach
The Democratic Senate victories secured this week will enable US President-elect Joe Biden (D) to more easily reverse Trump-era environmental rollbacks, confirm political appointees, and advance green spending and infrastructure provisions, but the razor-thin majority in both Congressional chambers will still create hurdles to pass more aggressive federal climate legislation, experts told Carbon Pulse.
EUAs stormed to a new all-time high on Thursday, stretching Monday’s record and closing in on €35 as energy and equity markets also notched gains.
NA Markets: RGGI surges to all-time high amid Democrat Senate victories, CCAs nudge above 2021 floor
RGGI Allowance (RGA) prices surged to an all-time high on thin demand this week as Democrats secured a majority in the US Congress, while California Carbon Allowance (CCA) values inched slightly above the programme’s 2021 floor price.
WCI regulated entities shifted carbon allowances and offsets into compliance accounts during Q4 2020 ahead of California’s interim cap-and-trade true-up deadline, while the state moved nearly 23 million allowances into Allowance Price Containment Reserve (APCR) tiers, according to data published Thursday.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Eastern skirmishes – Tensions between Ukraine and Russia have spilled over into the UN’s climate forum, with conflicting territorial claims surfacing in a routine carbon accounting document. Submitted in May 2020, Ukraine’s national greenhouse gas inventory report said “the occupation and attempted annexation of Crimea and armed aggression by the Russian Federation” had led to a loss of control over 7% of Ukraine’s territory. “This fact complicates, and sometimes makes impossible, the process of data collecting and reporting, needed for the annual National GHG Inventory.” The report then detailed why it views Russia as an occupying power, citing UN resolutions and reports. Moscow hit back, saying in a statement released Dec. 30 that the allegations were “absolutely incorrect and unacceptable”. It claimed not to be a party in the “Ukrainian internal conflict that covers the territory of Donetsk and Lugansk regions” and argued the Crimean people had chosen self-determination in a controversial 2014 referendum. Most international actors do not recognise the 2014 referendum and continue to regard the Crimea region as part of Ukraine. (Climate Home)
Inefficient flows – Electricity between the EU and the UK is no longer flowing as smoothly following Brexit, according to energy traders association EFET. When the EU and the UK unveiled their new trade agreement, energy traders expressed both relief and anxiety, but could not hide their fears about the additional red tape caused by Britain’s departure from the EU’s single market, citing “customs declarations and changes in day ahead auction procedures”. According to a European Commission spokesperson, power continues to flow across interconnectors in both sides of the Channel, “albeit less efficiently”. (Euractiv)
Final 45 – The US Internal Revenue Service and the Treasury Department released final regulations Wednesday on how businesses can claim the ‘45Q’ tax credit for CCUS. The final regs include rules to determine adequate security measures for the geological storage of qualified CO2, the definition of carbon capture equipment; and standards for measuring utilisation of qualified carbon. In addition, the final rules permit smaller carbon capture facilities to be aggregated into one project for purposes of claiming the credit when certain factors are present, such as common ownership and location. The latest coronavirus stimulus bill also extended the 45Q credit to apply to CCUS projects that begin construction by 2025, two years later than previously agreed in 2018. (Accounting Today)
MPG miss – The US EPA reported fuel economy for Model Year 2019 vehicles sold in the US was 24.9 miles per gallon (10.6 km/L), or 0.2 MPG below the same metric in MY 2018. Fuel economy has largely risen since MY 2004, leading to lower emissions from the transportation sector. Preliminary data showed MY 2020 would rise to 25.7 MPG, but those figures were based on projected production volumes rather than sales.
Bay Area batteries – California may need to utilise a growing number of household batteries to help ease demand during future heat waves to avoid rolling blackouts, according to a Los Angeles Times story. With California working towards climate neutrality, the state’s grid will have to incorporate programmable thermostats, solar-charged batteries, and electric vehicles as it seeks to satisfy summer demand. Those small additions can be aggregated to save energy resources across the grid, potentially avoiding future blackouts. The state could also use virtual power plants, or 5 MW solar-charged batteries, that can distribute power to small sections of the grid.
Colour theory – A third of American rivers have changed colour since 1984, with the shift likely due to variety of factors, including climate change, according to a new study. The study published in the journal Geographical Research Letters found a noticeable shift in US rivers turning greener since 1984. The study found roughly 5% of US rivers are blue, or pristine, 66% are yellow due to soil, and 28% are green from algae. The study attributed these shifts to fertiliser run-off, dams, efforts to fight soil erosion, and man-made climate change. (AP)
And finally… Absorbing good news – Rapidly eliminating planet-heating emissions to net zero means global temperatures could stabilise within just a couple of decades, scientists say in a paper published in Nature Climate Change. For many years it was assumed that further global heating would be locked in for generations even if emissions were rapidly cut, but scientists have now factored in the dynamism of the Earth’s natural systems, whereby stopping emissions would actually see atmospheric CO2 content go down due to the huge carbon absorption capacity of oceans, wetlands, and forests. (The Guardian)
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