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TOP STORY
Shaping of EU Innovation Fund on ice as lawmakers dither
Decisions over the details surrounding how the post-2020 ETS Innovation Fund will help EU heavy industry decarbonise are likely on hold until next year as lawmakers stall on setting the overall framework.
AMERICAS
Canada unveils C$2 billion low-carbon fund for carbon pricing provinces
The Canadian federal government on Thursday unveiled a new C$2-billion low-carbon fund, part of its Pan-Canadian climate framework that most provinces and territories signed last year.
NA Markets: RGGI prices jump as compliance buyers cover missed auction volumes; WCI holds steady
RGGI prices jumped 14% in the past week following the quarterly auction, while Ontario’s post-auction trade remained moderate.
ASIA-PACIFIC
NZ Market: NZUs fail to gather strength amid patchy demand
New Zealand carbon prices remained near one-year lows this week as the market is struggling to build any kind of momentum amid continuing regulatory uncertainty.
EMEA
EU Market: EUAs fall short of €5 in thin trade as energy complex turns bearish
EU carbon prices failed to top or even test €5 for the first time in three weeks on Thursday in thin, auction-free trade, amid a further weakening of the clean dark spreads.
COMMENT
COMMENT: EU nations risk climate credibility with forest rules that would mask emission increases
Forest mitigation should be measured using a scientifically-objective approach, not allowing countries to hide the impacts of policies that increase net emissions, writes a group of environmental scientists led by Joanna House, a reader in environmental science and policy at the Cabot Institute, University of Bristol, UK.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Warmer & dryer – This spring was the warmest in the UK since at least 1659, when temperatures first started to be recorded. Rainfall was also moderately below average at the national scale. Read more from the NRFA here.
Opportunity knocks – China and India will be the biggest recipients for new investment in power-generating capacity by 2040, representing a $4 trillion opportunity for the energy sector. China will require $2.8 trillion of spending for 2,547 gigawatts of new capacity, while India needs $1.2 trillion, according to a Bloomberg New Energy Finance outlook forecasting how energy markets will evolve by 2040. China’s wind and solar capacity will increase eightfold through to 2040, retaining the nation’s role as a global powerhouse of clean energy. India will build 10 times more solar capacity than net additions of coal to 2040 as it shifts to lower-cost renewables to meet a more than threefold rise in energy demand. Coal generation will increase by 78% as the country becomes the second-biggest power system in the world.
Coal’s killer – Solar power, once so costly it only made economic sense in spaceships, is becoming cheap enough that it will push coal and even natural-gas plants out of business faster than previously forecast. That’s the conclusion of a Bloomberg New Energy Finance outlook for how fuel and electricity markets will evolve by 2040. The research group estimated solar already rivals the cost of new coal power plants in Germany and the US and by 2021 will do so in quick-growing markets such as China and India. The scenario suggests green energy is taking root more quickly than most experts anticipate. It would mean that global CO2 pollution from fossil fuels may decline after 2026, a contrast with the International Energy Agency’s central forecast, which sees emissions rising steadily for decades to come.
Progress – Wind and solar produced 10% of the electricity generated in the US for the first time in March, according to the EIA’s monthly power report, The Hill reports. Annually, wind and solar made up 7% of electric generation in 2016, the EIA added. Meanwhile, US CO2 emissions from the country’s power sector declined between 2005 and 2015 as companies shifted toward gas and renewables, according to a report released yesterday by consulting firm M.J. Bradley & Associates. They noted that US GDP grew steadily over the same period, while US power sector emissions are now near 1990 levels.
Bulgaria’s breakin’ the law? – Bulgaria has given €1.3 billion euros in illegal aid to coal-fired and other power plants, according to a complaint filed with the European Commission by London-based lawyers ClientEarth, which have spent more than a year investigating Bulgaria’s practice of requiring public power provider NEK and distribution companies to buy all the electricity produced by plants classified as “high-efficiency co-generation” that produce heat as well as power. These operators are paid a surcharge, which comes from a levy on consumer bills. ClientEarth said its research found the aid flouted EU rules and the plants did not qualify for such help. The Commission has yet to decide on another complaint about Bulgaria filed by ClientEarth in April over free EUAs handed out to coal plants under the EU ETS. ClientEarth alleges four plants, which will receive permits to pollute worth €197 million between 2013 and 2020, had not met all the criteria to qualify. (Reuters)
Sweden’s stepping up – The country has committed to becoming a net-zero carbon emitter by 2045, under a law passed in parliament on Thursday. The legislation makes Sweden the first country to significantly upgrade its ambition since the world agreed the Paris Agreement, in contrast with the US’ backsliding. (Climate Home)
And so is Seattle – The city’s council has voted unanimously to do its part to fill a $2 billion hole left in the Green Climate Fund by President Trump, Climate Home reports. In a resolution passed on Monday, councillors pledged to uphold its portion of the US’ former commitment to the Paris Agreement. This included a commitment for the city to take the lead on supporting the GCF, to which Trump said the federal government would no longer give money. Seattle’s share of US GDP is around 1.6%, meaning an equivalent contribution from the city to the US’ outstanding $2 billion would be just over $33 million. Paris, home of the historic agreement that was struck in 2015, is the only city to have contributed unilaterally to the GCF so far, putting forward $1.3 million.
A social cost of carbon, but not THAT social cost of carbon – The White House is “trying to figure out a good, rigorous technical way” of calculating the damages of CO2 when performing cost-benefit analysis, according to a senior official with the Office of Information and Regulatory Affairs (OIRA), despite President Donald Trump’s bar on the use of the Obama-era social cost of carbon (SCC). According to InsideEPA ($), US government agencies will ultimately use some non-zero figure to assess the issue, but it will not be as large as the SCC metric because the of Trump administration policy that requires officials follow Bush-era cost-benefit guidance and use higher discount rates while focussing primarily on domestic, rather than global, damages when calculating the values.
More test runs – China’s State Council has picked five provinces to be pilot regions for green finance reform. Guangdong, Guizhou, Jiangxi, Xinjiang and Zhejiang will roll out policies and programmes on green loans, usage of environmental products as bank loan collateral, and preferential taxes and policies for green industries. They will also launch more pilot environmental commodity markets tied to energy use, waste discharge and water consumption.
And finally… Going underground – The UK’s sewer system, built in the 19th century to halt cholera epidemics, may play a role in tackling climate change, Bloomberg reports. Some of the pipes in Britain’s 624,000-kilometer sanitation network can get as warm as 21 degrees C (70 degrees F) due to water flowing into the system from toilets and plug holes that has collected heat from the air around and from household appliances. Capturing that warmth as a source of renewable energy could provide enough heat for more than a third of London each year, according to figures released Thursday by trade association Scottish Renewables and the utility Scottish Water.
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