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**This article is available to non-subscribers** – The EU ETS has witnessed a dramatic change over the past year as carbon prices have quadrupled, the market has attracted new participants, and the developments have given confidence to existing participants that the world’s biggest carbon market will remain the EU’s main climate policy tool.
Speculative buying in excess of 160 million tonnes has likely helped EU carbon prices double in value over the first half of the year, analysts said.
EU carbon prices held just above €15 for the second straight day on Tuesday after the day’s auction cleared relatively strongly and despite analyst warnings that the recent rally may have petered out.
Representatives for major Australian business groups on Tuesday met with Coalition MPs to urge them to approve the National Energy Guarantee (NEG).
Japan has awarded small grants to 17 projects that aim to cut greenhouse gas emissions and generate carbon credits under its Joint Crediting Mechanism (JCM).
New Zealand carbon allowances rose to four-week highs on Tuesday as the emergence of more buyers continued to push prices up.
The EPA published preliminary 2019 renewable volume obligations (RVOs) for the federal Renewable Fuels Standard (RFS) on Tuesday, with the biofuels industry arguing that the modest increases in the yearly quotas were more than cancelled out by the agency’s failure to act on several compliance waivers issued this year.
CARBON FORWARD 2018
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Spend two days with top experts, players, and decision-makers from the global carbon markets as they address today’s most attractive opportunities and pressing challenges. And join us for the EU ETS pre-conference training day organised by carbon market experts Redshaw Advisors, where you will learn how to effectively manage your carbon risk ahead of the looming overhaul of the bloc’s emissions trading scheme.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Case dismissed – A US federal judge on Monday threw out a lawsuit by the cities of San Francisco and Oakland seeking compensation for the costs of global warming-fuelled sea level rise against five oil majors. Although the 16-page ruling laid out by Judge William Alsup acknowledged the scientific consensus that fossil fuel combustion has warmed the planet and led to rising sea levels, he said that executive and legislative processes are the more appropriate venues of deciding how to balance the harms of climate change with the benefits of fossil fuel use. The oil companies, including Shell and BP, called the ruling appropriate and may cite the case in similar court proceedings in New York, Colorado, and elsewhere. (Axios)
How much will this cost us? – Ontario NDP head and new opposition lead Andrea Horwath wants the province’s fiscal watchdog to tally the cost of incoming Premier Doug Ford’s pledge to scrap cap-and-trade. Horwath on Tuesday formally asked Financial Accountability Officer Peter Weltman to determine the price of Ontario withdrawing from the environmental arrangement with Quebec and California. “Before Mr. Ford rips up the cap-and-trade deal, and makes billions in credits already bought by Ontario businesses worthless, we need to take a hard look at those costs in this case — not just for the province, but the costs to families and businesses,” the NDP leader said. (Toronto Star)
Gas blast – Strong demand growth from China, greater industrial demand, and rising supplies from the United States, will transform global natural gas markets over the next five years according to the International Energy Agency’s latest market forecast. Global gas demand will grow at an average rate of 1.6% a year, reaching just over 4,100 billion cubic meters (bcm) in 2023, up from 3,740 bcm in 2017, according to the IEA’s latest annual gas market report, Gas 2018, which was released today.
Desert protection – Chinese eco-company Elion Group and oil giant BP have signed a carbon emission purchase contract for Chinese Certified Emissions Reductions (CCERs) from the country’s forestry sector. The purchase aims to support existing carbon stocks over nearly 1,400 square kilometres of desert oasis in northern China, while also giving Elion additional means to develop projects focusing on ecological restoration in the country. Elion has worked for 30 years on initiatives meant to revitalise the Kubuqi Desert in the Inner Mongolia region, and has undertaken other projects throughout the country including the upcoming 2022 Winter Olympics in Beijing.
Zimbabwe trifecta – Zimbabwe has released a trio of climate change policies designed to make the country more resistant to climate pressures and help it meet its international pledges. The Child-Friendly Climate Policy is designed to educate school children about climate change and promote climate-friendly practices, such as protection of forests and wetlands and broader use of low-emissions technologies. A new Climate Smart Agriculture Policy, meanwhile, focuses on ensuring farmers and agricultural advisers adopt climate-hardy farming practices. And the country’s first overall National Climate Policy aims to help Zimbabwe put in place the legal structures needed to guide businesses on becoming greener to meet its emissions-cutting promises under the Paris Agreement. (Thomson Reuters Foundation)
Second session – The Oregon Joint Committee on Carbon Reduction held its second meeting on Tuesday to discuss the ongoing process of how to devise a policy solution for reducing GHGs in the state. The committee, formed after the legislature failed to pass a cap-and-trade proposal in March, featured testimony from Resources for the Future senior fellow Dallas Burtraw, director of the state’s carbon policy office Kristen Sheerhan, and director of the Oregon Department of Forestry Peter Daugherty. Although no specific proposals were put forth, several studies on the topics of carbon pricing and forest carbon sequestration are currently being conducted by state agencies and departments over the summer, with the committee’s next meeting taking place on July 24.
Solar switch – The New Jersey Board of Public Utilities (BPU) has approved a rule that will commence the process of developing an “orderly and transparent mechanism” for eliminating the state’s Solar Renewable Energy Credit (SREC) programme. The move is required by clean energy legislation signed by Governor Phil Murphy (D) into law in May – including an increase in the state’s Renewable Portfolio Standard (RPS) to 50% by 2030 – which the BPU said is necessary to create a more sustainable solar generation programme as the current SREC system has been criticised for credit price volatility. The SREC programme is due to sunset when either 5.1% of the KWh sold by the state’s electric power suppliers comes from solar generators connected to the grid, or by June 1, 2021. The BPU will begin working with stakeholders and market participants this summer on the new alternative to SREC. (Utility Dive)
Statement struggle – Acting head of the National Oceanic and Atmospheric Administration (NOAA) Timothy Gaulladet omitted climate change from the agency’s new mission statement, potentially mirroring other US government agencies that have downplayed or removed mentions of climate. As first revealed by the Union of Concerned Scientists and reported by the New York Times, Gaulladet’s presentation to the Department of Commerce not only removed the word “climate” from the proposed statement update, but also included an additional directive to “protect lives and property, empower the economy, and support homeland and national security”. Gaulladet has since said that his slides were only a “simplified draft for discussion”, but still have left scientists and climate experts worried about the future of the $5.9 billion agency. (Climate Nexus)
And finally… How long is forever? – “Coal has a very important role in our energy mix and I have no doubt it will have for many, many years to come, possibly forever.” That prediction came from Australian Prime Minister Malcolm Turnbull during a parliamentary debate on his government’s proposed national energy guarantee (NEG) on Tuesday. The policy requires electricity retailers to balance emission reductions with reliability of supplies. According to Climate Home, the PM was asked if he agreed with energy minister Josh Frydenberg, that the policy would prolong the life of the country’s coal power fleet.
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