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Governments need to raise carbon prices much faster if they are to meet their commitments on cutting emissions and slowing the pace of climate change under the Paris Agreement, according to a report released by the OECD on Tuesday.
**THIS IS A FREE ARTICLE** – The world’s biggest carbon offset market is set to sunset in 2020, with governments at odds over how the UN CDM’s thousands of projects and billions of carbon credits should be subsequently treated under Article 6 of the Paris Agreement.
European carbon prices gave back most of Monday’s near-5% gains on Tuesday as a weak auction result weighed, but EUAs still managed to close above €20.
Additional past vintage carbon allowances arising from regulatory provisions will also be included in the upcoming Western Climate Initiative (WCI) auction, California officials told Carbon Pulse.
Emission prices have since recovered but no one knows if this will last. With consultation underway on improving the New Zealand Emissions Trading Scheme (NZ ETS), the government should seriously consider a “price floor” to rebuild confidence in low-emission investment.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
No more RET – Australia will not extend its Renewable Energy Target (RET) when it ends in 2020, Energy Minister Angus Taylor confirmed Tuesday, adding that “emissions reductions are the least of the problems”, according to the Guardian. It had been expected that the RET would be discontinued, although the government under former PM Malcolm Turnbull had intended to put in place the National Energy Guarantee as a new climate policy for the energy sector, but that plan was finally laid to rest last week by new PM Scott Morrison. Taylor repeated claims by Morrison that Australia would indeed meet its Paris target, although Australia’s emissions are on the rise and the government lacks policies to limit carbon beyond a new initiative from Environment Minister Melissa Price to give more cash to the offset-buying Emissions Reduction Fund.
Dateless, not desperate – Germany’s coal exit commission ended its fifth meeting saying there were no predetermined decisions regarding a date for the end to coal-fired power generation. Following irritation about reports of a supposed compromise on a 2038 end date, economy minister Peter Altmaier sought to reassure members that the government would not interfere. Meanwhile, the speedy start of the exit is more important than finding a final end date, said the Advisory Council on the Environment (SRU), an expert advisory panel to the government focussing on environmental protection, in a statement. Germany’s total emissions from coal-fired power generation until a final exit must not exceed 1.5 billion tonnes of CO2 if the country wants to make a meaningful contribution to the Paris climate targets, but the government’s current 2030 climate objectives could lead to more than 2.5 billion tonnes, SRU added. (Clean Energy Wire)
Promises – Japan’s Marubeni Corp. on Tuesday announced a new climate strategy, pledging to cut its 3GW coal-fired power generation in half by 2030. The company also said it would not invest in further construction of coal-fired power plants unless they use ultra-supercritical steam generating technology. Finally, it promised to double the share of renewables in its generation mix to 20% by 2023.
No more subsidies – China is planning to phase out subsidies for its solar and wind power industries, and in new guidelines has vowed to accelerate those efforts, Reuters reported. The government wants renewables to be able to compete with fossil fuels without the help of subsidies, but is planning a mandatory renewable energy certificate scheme that would open a new potential revenue stream for wind and solar generators.
Fail disclosure – Environmental lawyers are demanding answers from the UK’s top financial auditors after reporting four of their clients to the audit watchdog for not properly flagging climate change risks to investors. Campaign group ClientEarth has reported EasyJet, Balfour Beatty, EnQuest, and Bodycote to the Financial Reporting Council (FRC) following concerns that they failed to address climate change threats in their latest annual reports, sources told the Telegraph.
Polluters must pay – People who pollute should pay for it, Canadian Prime Minister Justin Trudeau said Monday, as he demonstrated his willingness to fight the 2019 election campaign defending the upcoming carbon tax. (HuffPost)
Gas bag – Ontario Premier Doug Ford wants to expand natural gas access to families and business throughout rural and Northern Ontario with a partnership with local communities and the private sector. Ford outlined plans while at the International Plowing Match in Pain Court on Tuesday. “We heard from people across Ontario that natural gas expansion is important in order to grow businesses, create jobs and compete,” says Ford. “By cancelling the cap-and-trade carbon tax, we have already acted to bring natural gas prices down for Ontario families and businesses.” Ford says they are taking the next step to “ensure that the benefits of natural gas expansion are shared throughout the entire province.” The government will introduce legislation to develop the new natural gas programme. (CTV)
Bad buildings – California’s building sector was responsible for 25% of the state’s emissions in 2016 – double the amount recorded in regulator ARB’s inventory – according to new analysis from green group NRDC. The researchers said that the state’s official carbon inventory lumps emissions from electricity consumption in the building sector into a general “electricity” category, which makes it difficult to track the GHG impact on sectors that use this electricity. Instead, the authors’ analysis reallocated the electricity sector’s emissions to each end-use sector and estimated out-of-state natural gas leaks, since imports of the fuel make up 90% of the state’s consumption. Of the 25%, two thirds of the GHGs came from on-site electricity and natural gas consumption, while one third was from electricity usage.
Carbon cash for crude – In Feb. 2018, President Trump signed into law new tax credits that reward oil companies for capturing CO2 and preventing it from entering the atmosphere – either by burying the gas underground or by pumping it into wells to boost production. These tax credits, which have bipartisan support, are encouraging for those who believe that trapping CO2 from the fossil fuel industry – though no substitute for deploying cleaner energy sources – could help combat runaway climate change while society remains reliant on oil, gas and coal. Now, a Stanford University analysis published Aug. 15 in the journal Joule suggests another way the government could encourage the oil and gas industry to capture and store carbon. The article proposes a model for how relatively small government payments could pave the way for oil reservoirs to stash away more CO2 than their burned contents unleash.
More Korean offsets – South Korean industrial Hu-chems Fine Chemical Corp. has cancelled just over 430,000 CERs that will be re-issued as Korean Offset Credits (KOCs), which in turn can be converted to offsets eligible for compliance purposes in the Korean ETS. It normally takes 3-6 months from Korean firms cancel CERs until they get re-issued as KOCs. Analysts at Ecoeye recently estimated that around 22 mln CERs had been converted into domestic carbon credits, and that just over 6 million of those have not yet been used for compliance. The analysts expected fresh supply of around 3 mln per year over 2018-2020.
And finally… Let it Flo – Hurricane Florence, which left record rainfall along the Carolina coast this past week, could have been steered towards the US due to Arctic warming. In a guest post for Carbon Brief, Professor Jennifer Francis of Rutgers University noted that the Category 1 storm was directed to the US by an increasingly common weather phenomenon called “blocking highs” in the North Atlantic. While it is difficult to tease out the causes of these blocking patterns, Francis said that a rapidly-warming Arctic weakens the strength of the jet stream, allowing for the stubborn high-pressure systems to form at either side. Additionally, warmer ocean temperatures of the coast off the east coast of North America also helps to create stronger ridges and make blocking highs more likely.
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