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Colombia may have lost millions in carbon tax revenue while doing little to advance its climate goals, according to an NGO investigation into two REDD projects that raises questions about how forest carbon projects interact with government rules.
UK carbon allowances just ended their second straight month above the trigger for possible market intervention, but views are mixed as to whether the British government will decide to unleash more supply into the market in an attempt to dampen rising prices if the Cost Containment Mechanism (CCM) is activated at the end of July.
The Green Climate Fund’s board clashed this week over several climate adaptation projects, disbursing $500 million mostly to mitigation schemes and falling behind in its aim to balance its funding.
Swiss commodities trading house Mercuria has launched on environmental products, launching a new business led by veteran market players, many of whom have recently left oil majors including BP and Shell, Carbon Pulse has learned.
Private sector companies are likely to face more legal challenges seeking to force them to adopt more ambitious emissions-cutting policies in the coming years, as climate-related litigation increases “dramatically”, according to a report published Friday.
The municipal government of Wuhai city in Inner Mongolia on Friday released documentation showing that provincial authorities have issued administrative punishment to a company for falsifying data related to its CO2 allocation under China’s national emissions trading scheme.
More than 12 million Chinese Certified Emissions Reductions (CCERs) traded across all platforms in the Chinese market in June, setting a new record, but the ETS delay and lack of clarity about future offset issuances is creating challenges for traders.
New Zealand carbon allowances on Friday rose to new record levels as demand remains strong after a number of traders were left wanting at the June auction.
Speculative firms increased their California Carbon Allowance (CCA) positions over the week as their cumulative holdings rose above the 100-million mark, while emitters’ short positions increased at the futures expiry, according to US Commodity Futures Trading Commission (CFTC) data published Friday.
A summary of legislative and regulatory action on carbon pricing, clean fuel standards, and clean energy at the US subnational and federal level this week, including developments in California, New Jersey, Rhode Island, Colorado, and Nevada.
EUAs failed to extend the previous session’s all-time high on Friday despite steadier energy prices, but still managed to lock in a solid 4.2% weekly gain.
If Europe is serious about remaining a frontrunner in meeting the objectives of the Paris Agreement, then it urgently needs an ambitious EU ETS reform to clean up its historic addiction to free handouts so the practices of sustainable frontrunners become the market norm, argues Leon de Graaf of #SustainablePublicAffairs.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
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Putin passes – President Vladimir Putin signed legislation that will require Russia’s big emitting businesses to report their GHG emissions starting Jan. 2023, Reuters reported. Vladimir Burmatov, chairman of the parliamentary committee on ecology and environmental protection, has called the legislation a first step towards carbon regulation in Russia, the world’s fourth biggest emitter. The law would coincide with when the EU plans to introduce a carbon border adjustment mechanism that could impact much of Russia’s export-focused heavy industry. Read Carbon Pulse’s latest on Russia’s climate actions.
Ramaphosa ramp-up – South Africa should set a more ambitious NDC in the lead-up to November’s COP26 UN climate talks, a commission advising the president has recommended. A draft NDC in March significantly lowered the upper limit of the target range for GHG in 2030, to a range of 398-440 MtCO2e. But the commission recommended a lower range of 350-420 MtCO2e in 2030. Researchers Climate Action Tracker estimates South Africa emitted roughly 480-490 MtCO2e last year. (Reuters)
Activist takeover – The German activist group Climate List (Klimaliste) has announced the establishment of a national political party, but will not yet run in the upcoming federal elections in September. During an online press conference, Klimaliste said it will instead support climate activists running for parliament as direct candidates and to “challenge the established parties”. Klimaliste member Beatrice Bednarz said the climate policies proposed by the leading political parties are far off the Paris Agreement’s 1.5C target. “We need a CO2 price of at least €195/t,” she argued. “The Greens merely demand €60 by 2023. This shows they are far from striving for climate justice.” Meanwhile, the ruling German conservative CDU/CSU alliance has stabilised its position as the country’s most popular party again, relegating the briefly-surging Greens back to second place, according to a survey commissioned by news magazine Der Spiegel. Three months before the Sep. 29 election, Some 29% of respondents said they would be voting for the conservatives, whereas the Greens would receive 22% of the vote, the Social Democrats (SPD) 17%, the pro-business FDP 12%, the right-wing populist AfD 9%, and the Left Party 6%. Some 45% said that environmental and climate policy are determining factors in their decision, followed by jobs and growth (39%), domestic security (30%), and health (29%). (Clean Energy Wire)
Justice divide – EU countries and the European Parliament are at loggerheads over the revision of the Aarhus regulation, which allows individuals and civil society to challenge law in court on environmental matters, sources familiar with the process have told Euractiv. The inclusion of state aid and national-level implementation decisions in the scope of the legislation are the most contentious aspects. The European Parliament’s position is that both of these need to be included in the regulation, and some countries including Luxembourg, Austria, the Netherlands, Latvia, and Denmark, support moving closer to the MEPs’ position. Other countries, like Italy and France, have been more hesitant to support the Parliament’s position. But Hungary said it cannot support measures that go beyond the position of EU member states agreed in the Council of the EU. The European Commission is also reluctant to increase the scope of the Aarhus regulation, warning of a potential overload of the EU’s judicial system.
A lotta zloty – In order to achieve climate neutrality in Poland by 2050, it will not be enough to reduce the consumption of fossil fuels and develop renewable and nuclear energy, a new study has found. The entire economy will need large-scale implementation of BECSS, CCS and CCU technologies; the electrification of industry and the use of hydrogen; the expansion of electromobility; and structural changes in the agricultural sector, the report by Poland’s Centre for Climate and Energy Analyses (CAKE). Most of the emission reductions will need to take place in energy, but the sector’s role will diminish over time. This energy sector is need to carry 80% of the total reduction burden to 2030, and 55% by 2015, compared to a 2015 baseline. The decarbonisation and modernisation of the Polish energy sector will require significant investment estimated at €295 bln between 2021-50, which is some 60% above a previous projection.
Divisive action – Climate change will hit the south of the EU harder than the north, which is driving a wedge into one of the Union’s deepest fault lines. That’s the major finding from a survey of more than 100 scientific papers, interviews with climate scientists and a leaked draft of the next report by the UN Intergovernmental Panel on Climate Change. (Politico)
One at the time – Japan’s Inpex has announced its second domestic carbon neutral gas sales and purchase agreement this week, and its third in total. This time, Joetsu City Gas and Water Bureau has agreed to buy carbon-offset gas from Inpex and sell on to its customers, in particular Arisawa Manufacturing Co. The deal initially involves 19,000 tCO2, according to Inpex, but it is another sign that “carbon neutral” gas is taking hold in China as companies are lobbying the government to not impose mandatory emissions policies.
Lowering expectations — Canadian Environment Minister Jonathan Wilkinson said the country’s emissions reduction target will be “on the lower end” of the 40-45% below 2005 goal outlined by PM Justin Trudeau in April, according to an interview with iPolitics this week. Wilkinson said Canada will likely file an official target with the UN in July, with the country slated to set a specific number rather than a range. The range announced earlier this year would translate into 400-440 mln tonnes per year by 2030, down from the 740 Mt in 2005.
Throwing shade – An executive at utility company NRG Energy questioned the sector’s ability to achieve President Joe Biden’s goal of decarbonise the power grid by 2035, saying the final 20% would rely on technology not widely commercially adopted. Vice President of Regulatory Affairs Travis Kavulla said recent studies have shown decarbonising 80% of the US electricity grid is realistic, but he was sceptical of achieving in the final 20%. Xcel Energy CEO Ben Fowke added at the online policy discussion hosted by Power Events that the 2035 goal was a “stretch goal”. (Utility Dive)
Fun while it lasted – A three-judge panel from the US Court of Appeals for the DC Circuit unanimously vacated the US EPA’s 2019 approval for year-round E15 sales under former President Donald Trump’s administration on Friday, saying the federal agency had not fulfilled the regulatory process. In their ruling, the court disagreed with the EPA’s interpretation that the Clean Air Act creates a waiver for fuels containing 10% ethanol. Analysis firm ClearView Energy Partners said the ruling was a setback for biofuel producers who see preserving or expanding domestic sales as critical for the sector. (S&P Global Platts)
False positives – The UK’s public broadcaster BBC has removed an educational webpage laying out the “benefits” of climate change after a furious online reaction. BBC Bitesize, its website for schoolchildren, claimed warmer temperatures “could lead to healthier outdoor lifestyles” and that a benefit of climate change could mean easier access to oil in Alaska and Siberia. Other apparent benefits highlighted by the BBC included the ability to one day grow more crops in Siberia, new shipping routes created by melting ice, and new tourist destinations. Meanwhile, Britain’s Met Office has used a parody weather forecast set almost 40 years in the future to issue a stark climate change warning, the PA reports. A video posted on Twitter predicts highs of 40C on the first Saturday of Wimbledon “in 2059” and overnight temperatures in the mid-20s. The Met Office said the video was not a real forecast but contained examples of “plausible” weather based on climate projections.
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