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In an effort to ease bottlenecked supply in Korea’s carbon market, the country’s Cabinet has changed rules for when regulators can release extra CO2 allowances from the market stability reserve, three sources familiar with the situation told Carbon Pulse on Wednesday.
Linking carbon markets increases volatility and makes it less likely that they achieve emission reductions, an article in the journal Nature argued, proposing instead that policymakers “keep it simple” on carbon pricing.
China’s Hebei province has pledged to cut its carbon intensity by a fifth and lean on neighbouring Beijing in building a carbon market, but absolute emission levels are set to increase as industrial output is capped at levels above current production.
EU carbon prices extended the previous session’s one-month low on Wednesday as prices continued to skirt the €5 mark.
California regulators this week handed out just over 270,000 offsets, around a quarter of the previous issuance but still the second biggest handout of the year so far.
With the end of the financial year approaching, corporate buyers are keen to complete their budgeted offsetting and so demand has picked up in the last month. Project developer and carbon trader ALLCOT provides a snapshot of the market.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Internal conflict – The Trump Administration is not considering a carbon tax, a White House official said on Tuesday, according to Reuters. But the story doesn’t appear to end there. When former secretary of state James Baker and his allies came to the White House last month to pitch a carbon tax, they received a warm reception from Gary Cohn, one of the president’s top economic advisers. Six weeks later, the friendly meeting with advocates of the highly controversial policy proposal is still reverberating in the White House, Politico reports, underscoring the increasingly tense relationship between Cohn and Steve Bannon, Trump’s powerful chief strategist, who have staked out vastly different ideological approaches to West Wing matters. “Any tax would raise significant resistance from Republicans, and one Cohn ally says he is not making active arguments for the tax internally. But the meeting nonetheless set off alarm bells for Bannon and his allies, who regard Cohn with growing suspicion and see climate change as a key point of tension between Trump’s moderate and hardline conservative advisers. And they say Cohn — a registered Democrat — is a secret supporter of the tax,” writes Politico.
Brits in – Centre-right UK MEP Julie Girling has been nominated as rapporteur to steer through the EU Parliament the proposal to extend the stop-the-clock measure suspending international flights from the EU ETS, Girling confirmed on Twitter. It is the second key climate dossier awarded to a UK MEP since Britain’s Brexit vote, following Ian Duncan’s stewardship of the post-2020 ETS revision. The move comes despite the increased likelihood that UK emitters will no longer be a part of the EU ETS when the reforms kick in from 2021.
And finally… Unintended consequences – President Trump’s cuts to environmental programmes may face resistance from members of his own party due to an Obama Administration practice that spread billions of dollars in contracts to Republican as well as Democratic congressional districts. A Bloomberg analysis of federal contract data shows that spending related to the environment reached 423 congressional districts in fiscal year 2016 and totalled $5.9 billion. Almost half that spending – 47% – went to districts represented by Republicans, which could complicate Trump’s efforts to cut environmental spending.
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