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The UN International Marine Organisation (IMO) faces continued drag in developing policies to reduce GHGs, with some countries claiming that the cost is too high even as the container shipping industry sees record-breaking profits this year.
North American carbon allowance prices set new all-time highs on Friday, with California Carbon Allowances (CCAs) surpassing $30 and RGGI Allowances (RGAs) bubbling closer to the programme’s Cost Containment Reserve trigger level.
The Ontario Ministry of Environment, Conservation and Parks (MECP) on Friday adopted an amendment package for the province’s Emissions Performance Standards (EPS) that will align the province’s electricity sector benchmark with the federal ‘backstop’, but did not indicate whether it will move to incorporate carbon offsets in the nascent scheme.
A group of Canadian fossil fuel companies on Thursday announced their three-step approach to reaching net zero operational emissions by 2050, with the first phase to focus heavily on a CO2 transportation and storage network in the oil sands heartland of Alberta.
Financial players unwound their California Carbon Allowance (CCA) positions slightly over the week, while compliance entities kept their holdings nearly unchanged, according to US Commodity Futures Trading Commission (CFTC) data published Friday.
Liquidity continued to improve slightly in China’s emissions market over the past week, but allowance and offset prices both lack direction amid a lack of progress on policy and operational issues.
Australia’s Emissions Reduction Fund contracted the purchase of 6.8 million offsets at last week’s auction, the Clean Energy Regulator said Friday, with the average price up 6% from the previous auction but far below secondary market levels.
Japan’s government has confirmed that it will boost the share of renewables and accelerate the return of nuclear power, with cabinet’s approval on Friday of a draft energy plan that will guide policy efforts to reach the recently upgraded emissions reduction target for 2030.
Japan should push for a global solution to be found for rules guiding the international carbon market and expand its Joint Crediting Mechanism (JCM) to drive bigger involvement from domestic companies in foreign offset projects, the nation’s biggest business group has said.
EUAs rose to a one-week high early on Friday but ended up shedding 2% week-on-week, as late profit-taking canceled out the strongest daily auction in more than two months.
Pilot trading in Russia’s domestic carbon market is expected to start before the end of next year, according to a senior bank official, with at least three regions looking to launch pricing schemes.
Only around an eighth of possible supply from CDM projects could deliver abatement that would not otherwise happen if those carbon-cutting activities were allowed to transition into the Paris Agreement regime, according to researchers.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Export crediting – A coalition of many of the world’s richest nations has pledged to end export credit support for unabated coal power projects. The OECD announced it has brokered a new Arrangement on Officially Supported Export Credits, with Australia, Canada, the EU, Japan, Korea, New Zealand, Norway, Switzerland, Turkey, the UK, and the US all signing off on the deal. The deal covers all officially supported export credits and tied aid for: new coal‑fired power plants without operational CCS and existing plants unless the purpose of the equipment supplied is pollution or CO2 abatement and such equipment does not extend the useful lifetime or capacity of the plant. (BusinessGreen)
Side hustle – EU diplomates are concerned that side deals planned by the UK hosts of the COP26 UN climate talks in Glasgow next month could give recalcitrant nations an excuse not to complete the Article 6 rulebook on international emissions trade and to set more ambitious NDCs, Bloomberg reports, citing an anonymous EU official. In addition to the central process at the two-week talks, the UK is asking countries sign up to deals to end coal power and deforestation, reduce methane emissions, deliver climate financing and accelerate the transition to clean electric vehicles.
Won’t Xi you there? – The Times has reported that UK PM Boris Johnson has been told that China’s President Xi Jinping will not attend COP26. Asked earlier this week if Xi will join the summit, China’s climate envoy Xie Zhenhua told Reuters to wait for an announcement. An editorial in the paper said it means the summit “may fall short of its goals”, but adding: “That does not mean it is doomed to failure.” Xie also told Sky News that China does not need UK actions to encourage it to set more ambitious climate goals. His statement came as Johnson wrote in the foreword for the UK net zero strategy that “the UK is not afraid to lead the charge towards global net zero at COP26”, adding “the likes of China and Russia are following our lead”. It was also announced this week that Indian PM Modi would attend COP26. (Carbon Brief)
Pre-COP checkup – Some 145 countries – or around 70% of Paris Agreement signatories, accounting for almost 60% of global emissions – have now submitted a new or updated NDC (see WRI’s NDC Enhancement Tracker for the latest). While most of the major economies have submitted an updated plan, two of the world’s largest emitters – China and India, responsible for 24% and 7% of global emissions respectively – have not. According to WRI, all countries have mitigation commitments. All new and updated NDCs include elements to reduce or limit GHGs, with most countries (around 90% of those submitting to date) adopting a target to reduce emissions. WRI Senior Fellow Taryn Fransen says these commitments make a modest dent in the Paris “emissions gap.” Before the agreement was signed, global GHG emissions were on track to reach nearly 60 billion tonnes CO2e by 2030, or more than double what they ought to be to limit warming to 1.5C. The first round of NDCs shaved around 10% off that gap, and preliminary estimates indicate that the current round is on track to deliver another 10%. “To state the obvious, this is too little,” Fransen said. “But – importantly – the 2030 numbers don’t tell the whole story. Besides NDCs, 65 countries have pledged to reach net zero emissions by mid-century. Taking into account both the NDCs (as well as additional 2030 pledges from China and South Korea) and the net zero targets, warming could be limited to 2.1C,” she added. While this still exceeds Paris’ objectives, it represents real progress from 2015, when warming was on track to reach well over 3C. Of the countries submitting new NDCs, around 60% increased their ambition, while 14% made no change or decreased their ambition. Fransen adds: “It is clear at this stage that COP26 will conclude with a large gap still in place. Leaders at COP26 must address this gap with urgency. The Agreement stipulates that countries make a new round of commitments in 2025, but earlier progress is needed – especially by governments of high-emitting countries that have not yet stepped up their commitments.” WRI is urging countries to agree next month to all parties take steps to bring their targets into line with a 1.5C pathway no later than 2023, when they will undertake a Global Stocktake to assess their collective progress. UN Secretary-General Antonio Guterres and the Executive Director of the UN Environment Programme (UNEP) Inger Andersen will officially launch UNEP’s own flagship Emissions Gap Report on Tuesday, Oct. 26.
Frans & Russia, no love – The EU’s climate boss Frans Timmermans will not travel to Moscow to discuss climate action ahead of COP26, a Commission spokesperson told The Moscow Times. “Due to agenda issues, which meant it was not possible to meet all the relevant counterparts on the dates available, and the coronavirus situation, it was decided to postpone Mr Timmermans’ visit to Moscow until a later date,” the spokesperson said. The visit was supposed to take place on Oct. 25. Timmermans had planned to visit the Russian capital prior to the Glasgow summit, which kicks off at the end of this month. The Moscow Times called Timmermans’ cancellation “another setback” for Western attempts to engage Russia ahead of the summit. It comes after the Kremlin announced Wednesday that President Vladimir Putin will not attend COP26.
Little hope for G20 – As G20 heads of state are set to gather in Rome next week, Reuters reports that the 20 richest countries are struggling to strike an agreement over coal decommissioning and limiting global warming to 1.5C degrees. The meeting will inevitably set the tone of the upcoming COP26 climate summit, with Britain’s Alok Sharma having said earlier this month that this would be a “make or break” for ensuring successful negotiations. However, while few concessions have been made since the last gathering of energy and environmental ministers in July, sources recognised this should come as little surprise as sensitive issues like stopping fossil fuel subsidies will likely be handled during the summit.
Replacing the nuclear fleet – At a time when nuclear power seems to be gaining increasing consensus among EU countries, the UK identified a site for hosting small modular reactors (SMRs), a new atomic technology promising huge cost savings over traditional large-scale reactors, the Financial Times reports. This followed the executive’s decision to give nuclear a central role in its net-zero emissions strategy this week.
Putting the fail in Fianna Fail – Ireland has failed to meet an EU commitment to reduce non-ETS emissions by 20% between 2005 and 2020, according to provisional data released by the Environmental Protection Agency. The figures show that the country’s emissions are still only 7% below 2005 levels, contrary to a commitment made under the EU’s Effort Sharing Decision (ESD). They also show that Ireland’s GHG emissions under the current coalition government led by Fianna Fail fell by just 3.6% last year, despite the impact of the pandemic. They had fallen by 4% in 2019. A spokesperson for the Department of Environment, Climate and Communications confirmed that Ireland will need to purchase additional carbon allowances under the EU ETS to make up the shortfall. “Pre-Covid estimates of the additional costs of purchasing carbon credits for compliance with these targets were in the region of €6 million to €13 million, depending on the price and final quantity of allowances required,” the spokesperson said. It’s unclear why the Irish government would seek to source solely EUAs to make up its missing allowances, as opposed to AEAs – the sovereign carbon units traded under the ESD. (RTE)
Da bomb – Australian deputy prime minister Barnaby Joyce’s push for a A$3 bln extension of the inland rail project to Gladstone would unlock a “carbon bomb” of nine new coal mines and an estimated 150m MtCO2e in emissions a year, environmental groups claim, reports the Guardian.
Getting in on it – Ayala, one of the largest multi-sector conglomerates in the Philippines, has committed to a net zero target by 2050, starting with an ambition to offset all its Scope 1 and 2 emissions for 2022, while its financial arm will stop funding new coal-fired power projects. The company will initiate a wide range of activities to reduce emissions, and also team up with offset project developer South Pole to pilot a reforestation, forest protection, and biodiversity conservation project on the Mindoro island to sequester carbon, the company announced.
Fixing broken promises – A delivery plan for the $100 bln climate finance commitment is set to be revealed on Monday by a team of Ministers tasked to press developed countries to deliver on their promise ahead of COP26. The plan was commissioned by COP26 President Designate Alok Sharma, and will be unveiled by Canadian Minister for the Environment Jonathan Wilkinson and Germany’s State Secretary at the Ministry for the Environment, Nature Conservation and Nuclear Safety, Jochen Flasbarth. The $100 billion per year financing commitment was initially promised back in 2009 before being reaffirmed during the Paris Agreement negotiations in 2015. However, data from the OECD indicate rich economies have fallen short, and new pledges only amount to $79 bln to date.
Old argument, new analysis – A report released this week by the US NGO Environmental Market Association finds that carbon markets, such as emissions trading systems and cap-and-trade, are superior than carbon taxes for reducing emissions because of their certainty with regard to the level of emissions reductions achieved, their use of market forces to determine the carbon price, potential for flexibility provisions, greater ability to incentivise innovation, and fostering greater stakeholder engagement. The publication concludes that effective design of market mechanisms can make them the clear winner in the debate that has now spanned decades.
Lock them up for caring – After two years and a cost of $3.5 million, the final report from the “Public Inquiry into Anti-Alberta Energy Campaigns,” commissioned by the Alberta government, found environmental groups did nothing wrong, but “simply care about climate change.” The report released Thu. found the word “anti-Albertan” in its own title to be “neither constructive nor helpful.” The report debunks allegations that environmentalists were accepting foreign money to fund campaigns aimed at impeding Alberta’s expansion of the GHG intensive oilsands. (PR Newswire)
Carbon credit school – Britain’s Cambridge University has launched a Centre for Carbon Credits (CCCC) aimed at issuing trusted and verifiable carbon credits towards the prevention of nature destruction due to anthropogenic actions. They are using a combination of large-scale data processing (satellite and sensor networks) to build a carbon marketplace with verifiable transactions that link back to trusted primary observations. The CCCC is funding 6 studentships in affiliation with the AI for the study of Environmental Risks (AI4ER) Centre for Doctoral Training (CDT). These studentships are fully funded and will cover home or international tuition fees, research costs, and an annual tax-free stipend of at least £15,000 for four years full-time (1 year MRes + 3 years PhD), starting on Sep. 26, 2022. Applicants will need to identify their project choice at the application stage, with the following options available:
- Project 1: Artificial intelligence approaches to reconstruct changing landscapes with remote sensing
- Project 2: The biodiversity value of nature-based climate projects
- Project 3: Consequences of forgone production from nature-based climate projects
- Project 4: Sensor design for energy-constrained nature-based deployments
- Project 5: Drone-based forest biomass and soil analysis using machine learning techniques
- Project 6: Queueing-theoretic analysis of carbon sequestration
These projects span environmental science and computer science. Project supervision will therefore be provided by an appropriate cross-cutting supervisory team drawn from members of the CCCC. Shortlisting and interviews will take place shortly after applications close on Feb. 11, 2022. Further information can be found here.
SCIENCE & TECH
Going large at LaBarge – ExxonMobil said on Thursday it plans to expand CCS at its LaBarge, Wyoming facility and had started the process for engineering, procurement and construction contracts for the project. The expanded project will capture up to 1 Mt of CO2 annually, in addition to the 6-7 Mt already being captured there. The oil major added that a final decision on the proposed $400 mln investment, the latest in multiple expansions of carbon capture at LaBarge, is expected in 2022 and operations could start as early as 2025. Earlier this year, Exxon created a division to commercialise its technology that helps reduce emissions. The company had said it would invest $3 bln on solutions through 2025, by which time it plans to reduce the intensity of its oilfield GHG emissions by 15-20% from 2016 levels. (Reuters)
The word on warming – The Oxford English Dictionary has added a series of climate-related terms to its new edition. The terms include eco-anxiety, net zero, and climate catastrophe, as well as global heating, climate emergency, and climate justice. Climate denier, climate sceptic, and climate denialism have also joined the list. Lexicographers for OED have also traced existing climate-related words further back in time, tracking the term climate change back to a US magazine article in 1854. In the 1980s, the world was talking about the greenhouse effect, but that was quickly overtaken by global warming, and then both were eclipsed by the use of climate change which has seen sharp and steady growth over the past 40 years. Now the language has become more urgent, with climate emergency, crisis, and even catastrophe joining the lexicon, and seeing their use surge. (Press Association)
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