CP Daily: Monday February 15, 2021

Published 22:32 on February 15, 2021  /  Last updated at 22:32 on February 15, 2021  /  Newsletter  /  No Comments

A daily summary of our news plus bite-sized updates from around the world.

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Reformed MSR can smooth EU carbon price rise over mid-decade, before impact fades -analysts

EU lawmakers should consider allowing the supply-curbing MSR to automatically readjust to help carbon prices rise smoothly mid-decade, analysts said on Monday, while campaigners pushed for a far tougher regime to eliminate the market’s surplus.


VCM Report: Offset prices nudge higher, while Shell ramps up retirements

Voluntary carbon market (VCM) prices gained slightly this week on continued strong volume, as oil major Shell retired several million offsets just before announcing its strategy to reach net zero emissions through markedly higher carbon credit usage.


EU Market: EUAs slip below €40 after touching new all-time high

EUAs extended their record high for the third straight day on Monday, but soon faded back below €40 as a weaker energy complex weighed and experts doubted higher levels were possible this week.

New German carbon tax to barely dent car emissions -study

Germany’s new domestic carbon pricing scheme for transport introduced this year is estimated to have a marginal impact on the country’s road-based CO2 emissions, researchers estimate.


California offset project seeks lowest recorded LCFS carbon intensity score

A California-registered compliance offset project is aiming to transition to the Low Carbon Fuel Standard (LCFS) with the lowest carbon intensity score in the transportation sector programme, according to an application posted by state regulator ARB on Friday.

Head of US offset developer departs for multinational carbon specialists

The executive director of a US offset project developer is leaving the non-profit for a global carbon credit consultancy and brokerage firm, Carbon Pulse has learned.


Stranded assets could smite fossil fuel exporter credit ratings -Fitch

‘Stranded assets’ could significantly hurt fossil fuel-exporting countries’ credit ratings, as those governments face a loss of GDP, tax revenues, and export receipts as the world ramps up its decarbonisation efforts, ratings agency Fitch has warned.


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Go big or go home – Germany wants Europe and the US to strengthen transatlantic ties with a trade deal to abolish industrial tariffs, a WTO reform to increase pressure on China, and a transatlantic emissions trading system. Peter Beyer, transatlantic coordinator for Chancellor Angela Merkel’s government, told Reuters in an interview that Germany and the new US administration under President Joe Biden should “think big” and aim for an ambitious agenda based on shared values and focused on joint interests. “Biden’s decision to reinstate the US to the Paris climate agreement (which Trump abandoned) sends an important signal,” he said. As a medium-term goal, Europe and the US should strive for a joint ETS, which could be joined by other large industrialised countries. “That may sound utopian from today’s perspective, but if we don’t think big, we won’t get far,” Beyer said. Biden will hold his first event with other leaders from the G7 in a virtual meeting on Friday to discuss the coronavirus pandemic, the world economy, and dealing with China.

Real problem for real estate – Globally, real estate firms could rack up $2.5 trillion of additional costs in the future unless they accelerate action to decarbonise buildings and to boost climate adaptation and resilience this decade. That is according to a new briefing for investors published today by ShareAction. The responsible investment charity’s new ‘Decarbonising Real Estate: Foundations for Success’ briefing outlines how a 10-year delay in action on climate mitigation and adaptation across the global real estate sector would result in trillions of dollars of additional costs. Sources of costs include physical damage to buildings from extreme weather events, higher utility bills, stranded assets, and retrofitting. While noting that many large real estate businesses are front-loading the action on decarbonisation needed – often due to pressure from their investors or from policy, as the global net-zero movement gathers momentum – the report warns that many firms are not acting quickly enough to comply with new climate regulations, which in some cases are not even Paris Agreement aligned. (edie)


Dutch delay –  The Netherlands is likely to delay the roll-out of legislation enacting CO2 limits on coal-fired plants until October since it may take time before a new government is fully up and running, sources told Montel.  The government proposed late last year to cap coal-fired power production at 35% of maximum running hours from early 2021 until the end of 2024 to help slash the country’s CO2 emissions. It had intended to pass the bill in parliament by the end of the first quarter.

Carbon calling – Finland-based Climate Leadership Coalition, Sweden’s Haga Initiative, and Norway’s Skift Business Climate Leaders on Monday launched the ‘Call on Carbon’ initiative to ramp up climate investments and effective carbon pricing. The signatories call on governments to back their net zero targets with “effective, robust, reliable, and fit-for-purpose” carbon pricing instruments, and to finalise the rules for the international market mechanisms under Article 6 of the Paris Agreement. “We urge governments to act on this during 2021 and in doing so support COP26 in Glasgow and make it a true game changer,” the organisations said in a press release.

PIE in the sky – The Polish Economic Institute (PIE) has assessed that the government’s decarbonisation plan may be less expensive than maintaining the status quo until 2040. The government’s planned investments in the fuel and energy sectors are forecast at PLN 890 bln whereas PIE estimates maintaining the current system through 2040 would cost PLN 1.064 trillion – or 19.5% more – without even taking into account external costs (mainly health and environmental). PIE points out that energy companies having to buy additional EU ETS allowances could incur a further PLN 400 bln, while declining to pursue decarbonisation could result in Poland missing out on PLN 260 bln in funds from the EU’s various funds by 2030. (Biznes Alert)

Pragmatic levy – A consumption levy would be a more “pragmatic” approach than the CBAM planned by the EU, and should be considered for at least an introductory period, think-tank German Green Budget (GBG) said. Under a consumption levy, standard emissions values would be set for every product sold within the EU, with the option of providing evidence for emissions that are individually lower. And it would be relatively easy to introduce a high CO2 price under a consumption levy compared with under a carbon border, where it would raise serious questions regarding WTO rule compliance, GBG scientific director Swantje Fiedler said. (Argus Media)

Hub funds – The UK government is to fund a new £10 mln green finance research centre based in the cities of London and Leeds to develop granular, publicly available data that could allow financial institutions and investors to identify a company’s most at-risk assets, or spot deforestation in supply chains. (FT)


Social Stig-ma – The US social cost of carbon should be at least $100/tonne, well above the $8 level under President Trump or even the $60 level set by President Barack Obama. That’s according to influential economists Joseph Stiglitz and Nicholas Stern, in a paper before President Biden’s administration is expected to release an interim report on the issue this week. They claim the US needs to go wider than just pricing emissions and must include inequality, technological innovation, disclosure of risk in capital markets, the incumbent power of existing infrastructure and social networks, and the damage from other kinds of pollution. (Bloomberg)

Federal freeze – The US EPA on Friday asked a federal court to partially freeze a mandate that was issued when judges scrapped the Trump administration’s Affordable Clean Energy (ACE) rule last month. The agency wants to delay the order that vacates Trump’s repeal of the Obama-era Clean Power Plan while the EPA crafts new standards for power plant GHG emissions, according to a motion filed at the US Court of Appeals for the District of Columbia Circuit. The request would ensure that the Clean Power Plan wouldn’t go into effect and create obligations for states while the EPA reviews its options for coal-fired plant carbon rules under the Clean Air Act. (Bloomberg)


Gates hate – Microsoft founder and billionaire philanthropist Bill Gates has slammed the US left’s Green New Deal proposal to decarbonise in a decade as a “fairytale” of peddled fantasies. Gates admitted he’s an imperfect messenger for climate action himself, saying he spends $7 mln a year or three times normal fuel prices to power his private jets with biofuels. He is currently peddling his book on climate change, focusing on technological solutions and urging governments to effectively price emissions. (BBC)

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