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TOP STORY
One Planet Summit: North, Latin American governments commit to boosting regional carbon pricing ties
Twelve North and Latin American national and sub-national governments on Tuesday committed to using carbon pricing as a central climate policy instrument and to deepen regional integration of their emissions trading markets.
EMEA
EU Market: Explosion, supply disruptions in European gas network trigger wild volatility for carbon, energy prices
EUAs ended down on Tuesday after swinging wildly between recent lows and a five-day high, as gas supply concerns following pipeline disruptions and an explosion at an Austrian distribution hub rocked the European energy markets.
ASIA PACIFIC
Australia to review major ERF offset methods amid integrity concerns
Australia on Tuesday announced it will review two offset methodologies that account for nearly half the carbon credits contracted by the government, and which were flagged as potentially problematic by the Climate Change Authority earlier this week.
NZ Market: Muted supply helps send NZUs higher
New Zealand carbon permits made further gains on Tuesday as scarce supply pushed up prices.
AMERICAS
Slash WCI’s future emissions caps by market’s 2020 allowance surplus, urges California think-tank
In order to tackle persistent over-supply, California and its WCI partners should reduce their 2021-2030 emissions caps by an amount equal to the unused pre-2021 allowances held by market participants after 2020 compliance.
UPDATE – Factors other than politics at play in lacklustre Ontario auction, say market participants
(Updates with Union Gas comment) – Several other factors may have influenced last month’s lacklustre Ontario carbon allowance auction result besides heightened political uncertainty, several market participants say.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
From the One Planet Summit in Paris:
Don’t bank on it anymore – The World Bank said it will no longer finance upstream oil and gas projects after 2019, apart from certain gas projects in the poorest countries in exceptional circumstances. “As a global multilateral development institution, the World Bank Group is continuing to transform its own operations in recognition of a rapidly changing world,” the bank said in a statement. The IFC will work to set a single unifying global standard on green bonds to facilitate the development of the green bond market to crowd in private finance into climate business. The World Bank said it will be applying a shadow price on carbon in the economic analysis of all IBRD/IDA projects in key high-emitting sectors where design has begun since July 2017. IFC started using carbon pricing in key sectors in Jan. 2017 and will mainstream the same starting Jan. 2018, and the World Bank Group will report annually from late 2018 emissions from the investment projects it finances in key emissions-producing sectors such as energy.
Company pressure – Global investors launched Climate Action 100+, a five-year effort to scale-up engagement with big corporate emitters to accelerate climate action. Some 237 firms agreed to apply climate risk disclosures recommended by the Task Force on Climate-related Financial Disclosures. US oil major ExxonMobil said it will join them, the Financial Times reported.
Define it – The European Commission said it will publish a plan in March to push green finance by eventually requiring investors to include sustainability in investment decisions, to clarify of what can be considered “sustainable finance”, and to relax capital requirements for banks investing in clean technologies.
Getting out – French insurer AXA is ending insurance and investment in tarsands companies and related pipelines. It is also strengthening its divestment from coal, with a tighter threshold that will mean selling off €2.4 billion of investments and phasing out insurance of new coal projects. It also plans to quadruple investments in sustainable energy and buildings by 2020 to €12 billion. Dutch bank ING appeared to be less ambitious with no plans to divest, but said it will not take on new clients that rely on coal for 10% or more of their business by 2025, and to stop lending to utilities with more than 5% coal-fired power.
Green budgets – The OECD launched the Paris Collaborative on Green Budgeting to assess and drive the alignment of national budgetary processes with the Paris Agreement and other environmental goals.
From elsewhere:
Go coal – The fight over coal’s future is going global, with the Trump administration seeking pro-coal allies as an intergovernmental campaign to end coal use announces new members in Paris. The US’ proposed “Clean Coal Alliance” has not begun recruiting for members, according to Washington-based E&E News, which broke the story on Monday. But Australia, Indonesia, China, India, Ukraine, Poland and Japan were all likely to be asked to join. “The US is considering pulling together a group of countries that support using cleaner, more efficient fossil fuels,” an administration official told E&E. “There is an anti-fossil fuel movement being aggressively pursued by a number of countries and environmental activists.” The effort will be led by Trump’s main climate advisor George David Banks and the US Department of Energy. It would encourage cooperation on technologies that reduce the carbon footprint of the most polluting fossil fuel. It will also promote natural gas exports. (Climate Home)
EU stamp – The full European Parliament has rubber-stamped two bills to extend the suspension of extra-EU flights from the ETS and Brexit-proof the market, and to link the ETS to the much smaller Swiss scheme, taking both bills closer to becoming law.
CPP 2.0 – An advance notice of proposed rulemaking seeking public comment on potential proposals to replace the US Clean Power Plan will be released by the EPA “in the upcoming weeks,” Politico reports, citing a Monday court filing. The agency said the notice will “solicit information on systems of emission reduction that are in accord with the legal interpretation that has been proposed by EPA” and that the agency is still “considering the scope of any potential new rule.”
No stopping these kids – US federal judges expressed doubt on Monday at the Trump administration’s attempt to toss out a lawsuit brought against the government by a group of 21 young people suing over climate change. The three-judge panel of the 9th Circuit Court of Appeals in San Francisco heard arguments from the Trump administration, which had made a rare request for the appeals court to halt the Juliana v. United States case, which is scheduled to go to trial in February. While administration lawyers argued that the “unprecedented” case would create a “constitutional confrontation” if allowed to proceed, multiple outlets report that the judges’ line of questioning seemed to indicate that they will allow the case to move forward. (Climate Nexus)
Japan dip – Japan’s greenhouse gas emissions fell 0.2% to a six-year low in the financial year that ended last March, government figures showed, amid a growing use of renewable energy and the gradual return of nuclear power. (Reuters)
Granular detail – A new US Energy Information Administration report provides a state-by-state breakdown of US CO2 emissions and their movement over a decade. The chart above tracks those changes for the 20 largest per-capita emitting states – showing a downward trend overall. “On a per capita basis, energy-related CO2 emissions decreased in 49 states (including the District of Columbia) and increased in 2 states (Louisiana and Nebraska) between 2005 and 2015,” EIA notes in a summary of newly released data for 2015. US emissions have generally been heading downward for around a dozen years, thanks to displacement of coal by natural gas and renewables in power markets, greater efficiency and other factors. (Axios)
Re-prioritised – British PM Theresa May has said called tackling climate change and reducing its effects on poorer countries a “moral imperative”, as the Conservative party renewed its push to portray itself as environmentally friendly, reports the Guardian. Writing in the Guardian ahead of this week’s “One Planet” climate change summit in Paris, May said there is a “clear moral imperative for developed economies like the UK to help those around the world who stand to lose most from the consequences of manmade climate change.” May’s comments come as the Independent reports leaders from three indigenous Arctic communities have called on the UK Government to meet and exceed its commitments under the Paris Agreement. (Carbon Brief)
Another lawsuit takes flight – The Dutch government is being sued for refusing to publish documents about ICAO’s CO2 standard for aircraft. NGOs Natuur & Milieu and T&E, and environmental lawyers ClientEarth, argue that by withholding decisions and research about the CO2 standard, emission trends, biofuels and offset rules – all of which were drafted or developed at ICAO – civil society and experts have been prevented from examining claims of ICAO’s effectiveness in addressing aviation’s climate impact.
And finally… A bit much – A network that underpins the virtual currency Bitcoin is projected to require all of the world’s current energy production in order to support itself within three years, according to estimates. The amount of power necessary to support Bitcoin has increased significantly in recent months, along with the cryptocurrency’s price. Bitcoin mining – the process of generating new units of the currency by confirming bitcoin transactions on an online ledger called the blockchain – requires computing power, which is used to solve the complex mathematical puzzles used in the mining process. Analysis of how much energy it currently requires to mine bitcoin suggest that it is greater than the current energy consumption of 159 individual countries, including Ireland, Nigeria and Uruguay. The Bitcoin Energy Consumption Index by cryptocurrency platform Digiconomist puts the usage on a par with Denmark, consuming 33 terawatts of electricity annually. It’s important to note that this projection is purely hypothetical, and for it to be realised it would require Bitcoin to continue its remarkable growth trajectory and for global energy production to remain stable. (Newsweek)
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