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TOP STORY
Just a game: China ETS to kick off with two years of simulated trade, no compliance obligations
China’s national emissions trading scheme is set be a “game” when it starts in the coming months, with no real trades or compliance obligations during its first two years of operation, two sources close to the market’s design process said Wednesday.
EMEA
Germany aligns with UK in seeking alternative to disruptive EU ETS Brexit-proofing measure
Germany has thrown its weight behind a UK alternative to what many stakeholders see as a disruptive Brexit-proofing measure for the EU ETS.
EU Market: EUAs jump over 4% in auction-less day, recovering recent losses
European carbon prices jumped on Wednesday to recoup much of their recent losses, as a rare auction-free day coupled with speculative short-covering appeared to be the main drivers.
Portugal targets coal, carbon with taxes new and old
Portugal will remove tax exemptions for coal from next year to help phase it out of its power sector, while “revitalising” its national carbon tax.
AMERICAS
Replacing Ontario’s carbon market with a tax will cut more emissions -study
Replacing Ontario’s cap-and-trade scheme with a revenue-neutral carbon tax, as the province’s poll-leading Progressive Conservatives have vowed to do, would result in larger emission reductions, a new study shows.
Cap-and-trade not driving California’s falling emissions -report
California’s carbon market had little to do with last year’s near-5% drop in capped emissions in the state, according to researchers.
ASIA PACIFIC
SK Market: KAUs extend gains as year-end demand builds
South Korean CO2 allowances edged up another 50 won on Wednesday to extend their recent eight-month highs as emitters looking to balance their books by year-end appeared happy to pay higher prices in a market short on available supply.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
FROM COP23
Merkel-Macron – As the high-level element of the Bonn talks kicked off on Wednesday, German Chancellor Angela Merkel and France’s President Emmanuel Macron promised to limit the use of coal and urged more climate action. Macron, who also reiterated his called for carbon border measures, said France would make up for a shortfall in US funding for the climate science research by the UN’s IPCC. Some environmental groups expressed disappointment that Merkel did not set a date for phasing out coal, a key issue in her separate talks this week to form a coalition government. The Greens are holding out for CO2 cuts totalling 120 million tonnes that would require the closure of 20 coal plants. Merkel’s conservatives and the pro-business Free Democrats (FDP) want cuts of up to 66 million tonnes. (Reuters)
Family emergencies – Following up on yesterday’s news that Tom Shannon, head of the US delegation at COP23, would not be attending the talks, Bloomberg Environment reports that he, like his #2 at the summit Trigg Talley, left the talks earlier this week due to a family emergency. Shannon will be replaced by career diplomat Judith Garber, the acting assistant secretary of state for oceans, environment, and science at the State Department. The announcement comes amid signs of division between State Department negotiators, who are largely focused on procedures to implement the Paris climate pact, and Trump administration political appointees sent to the Bonn summit to push the White House’s pro-fossil fuel agenda.
Pricing push – UN Secretary-General Antonio Guterres told the Bonn talks that governments should put a price on carbon and stop making bad bets on fossil fuels. “To meet the Paris goals we need at least 50% global coverage and a higher price on carbon to drive large-scale climate action,” he said.
A bit better, but still dire – The outlook for curbing global warming has improved since last year as a result of policy moves in China and India, analysts said Wednesday. In a report released on the sidelines of COP23, Climate Action Tracker (CAT) lowered their temperature rise prediction this century from 3.6C to 3.4C. It’s still a long way from the 2C limit that scientists say is needed to avoid the worst effects of climate change. CAT said China’s emissions grew by 110% in the first decade of this century, but they have slowed significantly to just 16% between 2010 and 2015. (Climate Home)
Smaller, simpler – The Green Climate Fund (GCF) has launched a simplified application process to help developing countries get access to funding for small-scale climate projects, Climate Home reports. In response to complaints that onerous paperwork blocks cash from reaching the world’s poor, the UN-backed fund has cut the number of documents required to bid for up to $10 million. Under the amended process, “direct access entities” can get quicker approval for projects judged to have low environmental and social risks.
FROM ELSEWHERE
Ahead of schedule, dudes – California utilities are well-ahead of the state’s renewables portfolio standard – already the most aggressive in the nation – and by some accounts may be supplying 50% carbon-free energy a decade ahead of schedule, according to a new report from California Public Utilities Commission (CPUC) covered by the San Francisco Chronicle. As of this year, 43.2% of San Diego Gas & Electric’s energy supply comes from renewable resources; 32.9% for Pacific Gas & Electric; and 28.2% for Southern California Edison. CPUC’s report also concludes the state’s aggressive RPS program has helped drive down the costs of renewable energy. Between 2008 and 2016, the price of utility solar contracts declined 77%. Between 2007 and 2015, prices of wind contracts reported to the CPUC have declined 47%. (Utility Dive)
Where’s the beef? – Ireland has no plans to introduce a carbon tax on agriculture despite calls by the Citizens’ Assembly to bring one in. A senior government source confirmed the decision to The Independent, highlighting that Ireland’s GHG emissions from agriculture are at the same level as they were in 1990 amid increased production. “It’s not fully appreciated but Irish farming produces much less CO2 than other countries, Brazilian beef for example, so it makes no sense to displace production from Ireland to the Americas either economically or environmentally,” he said. The Irish meat industry has clashed on the issue with the Citizens’ Assembly, which is a public body that consults the country’s parliament on major issues including climate change.
Wait til next year – There will be no news from Canada’s PEI this year on how it will implement carbon pricing, with the premier saying an announcement will be made in early 2018, CBC reports. Wade MacLauchlan said his government has recently held discussions with the federal government and neighbouring New Brunswick on how to proceed. Under Ottawa’s Pan-Canadian Carbon Pricing Framework, all provinces and territories are required to have either cap-and-trade and/or a carbon tax in place by next year.
And finally… Book your flights – Brazil has thrown its hat in the ring to host COP25 in 2019. Brazilian Environment Minister Jose Sarney Filho made the announcement on the sidelines of the UN climate summit in Bonn on Wednesday. Based on the rotating order, the Latin America and the Caribbean region is due to host the talks in two years, though it’s not yet clear whether there will be other contenders. Poland’s Katowice will host the talks next year, while they are expected to return to Western Europe in 2020, based on the schedule.
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