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CARBON FORWARD 2017
The voluntary carbon market is maintaining demand from corporate buyers but average prices are falling as developers work out the best way to secure their future under a global climate regime that may otherwise squeeze them out.
EU carbon prices are set to more than double to €15-20 by 2019-20 as utilities up their hedging, curbing supply just as the MSR starts sucking up hundreds of millions of allowances, a Barclays analyst said Thursday.
European carbon prices jumped by nearly 6% on Thursday on news that four French nuclear units are being temporarily halted amid flooding risks from construction work being done on a nearby dam.
The EU’s aviation allowance sales resumed on Wednesday after a 10-month hiatus, with a group of 25 member states selling 1.08 million spot permits.
China has delayed by one year its auto industry ETS, a scheme to boost the use of so-called new energy vehicles (NEVs) by imposing sales and fuel efficiency targets on both domestic and international manufacturers.
Carbon markets on both coasts showed relatively little volatility this week, with prices in RGGI mostly unchanged and California moving in a 20-cent range.
Coherent decarbonisation: Pöyry presents Policy Coherence Mechanism to protect EU ETS from overlapping instruments
Pöyry presented today at the Carbon Forward 2017 conference a Policy Coherence Mechanism for the EU’s Emissions Trading Scheme (ETS). The proposal is intended to ensure that the effectiveness of the carbon market does not suffer amid calls to strengthen other instruments who also drive decarbonisation. Pöyry Management Consulting developed the mechanism to deal with policy overlaps in a structured and predictable manner on behalf of a consortium made up of the three largest Nordic utilities – Fortum, Statkraft and Vattenfall.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Not gonna happen – Challenging Chancellor Angela Merkel’s recent promise that Germany will find ways to meet its 2020 climate targets, nine analysts and researchers contacted by Bloomberg have said that the country will probably fail in its efforts. “Merkel’s stoic approach to meet the non-binding 2020 goal would most likely come down to how tough the governing coalition is prepared to be on the nation’s biggest polluters. Plants burning coal still produced about 40% of the nation’s power last year.” There is no way the goal can be met by improving energy efficiency or encouraging electric car use at the pace required within four years, said Bloomberg New Energy Finance analyst Jahn Olsen. The significant differences in the FDP’s and the Greens’ positions mean that Germany probably will not be able to put together a plan to hit the target du ring the coalition negotiations, said Deepa Venkateswaran, an analyst in London at Sanford C. Bernstein & Co. (Clean Energy Wire)
It’s gonna cost ya – Extreme weather and public health issues related to burning fossil fuels could cost the United States up to $360 billion annually – nearly half of annual US economic growth – within the next ten years, according to a new report. The report from the non-profit Universal Ecological Fund found that the impacts of wildfires, hurricanes, heat waves and other extreme weather amplified by climate change, combined with air pollution, cost the United States $240 billion per year since 2007. The report comes as the US tallies up the price tag for Hurricanes Harvey, Irma and Maria, which are estimated to cost $300 billion in damages, or twice the cost of all hurricane damages within the past decade. (Climate Nexus)
Negative carbon price – Governments of 11 European countries are supporting fossil fuels to the tune of more than £80bn per year, according to the Overseas Development Institute. Fuel-poor households are the target of much of the support, it notes. Diesel fuel alone received €21bn in tax breaks from EU institutions and 11 member states between 2014 and 2016. It explains that some of the support is in the form of lower tax rates for diesel compared to other fuels. (Climate Home)
Slowly but surely – Global CO2 emissions remained static in 2016, writes the Guardian, covering data published by the Netherlands Environmental Assessment Agency today. It notes that four of the world’s top five emitters cut CO2 output last year, with China’s emissions falling by 0.3%. Only India saw its CO2 emissions rise, by 4.7%. (Carbon Brief)
Welsh efforts – Wales is aiming to generate 70% of its electricity from renewables by 2030, the Welsh government says. The figure would more than double the current renewable share in Wales, which stands at 32%. To help it meet this aim, the Welsh government is calling on Westminster to “stop the ideological exclusion of onshore wind and solar”.
Breathing LIFE – The European Commission has approved an investment package of €222 million from the EU budget to support Europe’s transition to more sustainable and low-carbon future under the LIFE programme for the Environment and Climate Action. The EU funding will mobilise additional investments leading to a total of €379 million going towards 139 new projects in 20 member states. In the area of climate action, the EU will invest €40.2 million to support climate change adaptation, mitigation and governance and information projects. Twelve LIFE Climate Change Adaptation projects will mobilise €42.6 million, of which the EU will provide €20.6 million. Nine LIFE Climate Change Mitigation projects have a total budget of €25.7 million, of which the EU will contribute €13.6 million. Six LIFE Climate Governance and Information projects will improve governance and raise awareness of climate change. They have a total budget of €10.4 million, of which the EU will contribute €6 million.
And finally… The Tesla of the skies – Low-cost British airline Easyjet is developing a battery-powered aircraft for short flights, like those from London to Paris, it announced on Wednesday. In order to create electric engines that cut emissions, noise pollution, and costs, easyJet teamed up with the American start-up Wright Electric. According to Wright Electric, the battery-propelled planes could be half as noisy and 10 percent cheaper than those that require jet fuel, and could begin shuttling passengers on flights shorter than two hours within a decade. (Pacific Standard)
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