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TOP STORIES

UK “unlikely” to remain in EU ETS but favours remaining “highly aligned” to it post-Brexit -minister

The UK is “unlikely” to remain in the EU ETS after it leaves the bloc but its strong preference is to design a domestic approach that is “highly aligned” with the continental carbon market, a British government minister said.

IPCC issues sternest warning yet on need for major emission cuts

The world must cut CO2 emissions 45% below 2010 levels by 2030 and achieve net zero emissions by mid-century if it is to stand a chance of limiting global warming to 1.5C, the Intergovernmental Panel on Climate Change (IPCC) said Monday, in a report highlighting the far-reaching differences in impact between 1.5C and 2C of warming.

AMERICAS

WCI poised to solicit report on allowance tracking, double counting

The Western Climate Initiative (WCI) is set to commission a report this week to help it better account for compliance instrument transfers across the North American carbon market and demonstrate progress toward climate goals, including potentially those outlined in the Paris Agreement.

RGGI compliance entities growing length, CFTC data shows

RGGI compliance entities are increasing their long positions in the market as prices continue to rise above the $5.00 level, according to data from the US Commodity Futures Trading Commission (CFTC).

RINs recede ahead of Trump’s expected E15 announcement

Renewable Identification Numbers (RINs) prices under the US Renewable Fuels Standard (RFS) slid back to near single digits Monday as reports suggested President Donald Trump will announce year-round sales of 15% ethanol blends (E15) at a Tuesday rally.

ASIA PACIFIC

Vietnam signals revision to Paris pledge to pave way for huge emissions growth

Vietnam has become among the first countries to signal it will adjust its Paris pledge at December’s climate talks, a change that would enable the rapidly-developing country to emit tens of millions of tonnes in additional GHGs by 2030 compared to its previously commitment.

Australia’s NT to see 40% emissions rise from major Inpex LNG project

When Japan-headquartered oil firm Inpex launches the two tranches of its Ichthys gas field this year and next, Australia’s Northern Territory will see its annual GHG emissions rise by over 40%, putting the nation further off track to meet its Paris Agreement obligations.

NZ Market: NZUs inch up to new record highs on small volumes

New Zealand carbon allowances on Monday hit a new all-time high, although in small trades reflecting the shortage of available supply in the market.

EMEA

EU Market: Carbon retreats from 2-wk high as UK exit from ETS looking more likely

European carbon prices topped €22.50 for the first time in two weeks on Monday, but ended in the red after news was published suggesting the UK is unlikely to stay in the EU ETS post-Brexit.

ICYM

POLL: Analysts raise EUA forecasts after price spike, see more volatility ahead

EU carbon prices will edge up towards the end of the year before climbing back above €25 for good in 2019, according to a poll of 15 analysts conducted by Carbon Pulse.

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DON’T MISS CARBON FORWARD 2018!

SMALLER INDUSTRIAL EMITTERS AND AIRLINES ARE ELIGIBLE FOR UP TO 70% OFF STANDARD TICKET PRICES

Don’t miss the 3rd annual Carbon Forward conference and training day – Oct. 16-18, 2018 in London.

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.

Order your passes or read more about Carbon Forward 2018

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Job listings this week

• Forest and Climate Analyst, Green Climate Fund – Songdo
• Grade 3 Senior Researcher, International Institute for Environment and Development – London/Edinburgh
• Advisor, European Energy Policy, Uniper – Brussels
• Climate Policy Analyst, Environmental Investigation Agency – Washington DC
• Junior Advisor Global Markets Programme, GIZ – Kampala

Or click here to see all our job adverts

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Energy rising – The IEA’s preliminary data for 2018 shows that emissions from the energy sector are on track to grow for the second year running, according to IEA chief Fatih Birol, in a major blow to hopes the world might have turned the corner on tackling climate change. The IEA declined to say exactly how much emissions were up this year, as it will not publish official figures until Mar. 2019. A new IEA report on Monday predicted that wind, solar and other renewable sources are expected to grow their share of global electricity generation from 25% in 2017 to 30% by 2023. (The Guardian)

So is bioenergy – The same IEA report found that “modern” bioenergy will lead the global expansion of renewables up to 2023, largely due to its rising use in heat and transport. Modern bioenergy, which does not include the traditional use of local biomass in the IEA’s definition, made up half of all renewable energy in 2017. Overall, global consumption of renewable energy increased by 5% last year, with the share of renewables in final energy consumption ticking up 0.3 percentage points to 10.4%. Solar photovoltaics continue to dominate renewables in the electricity sector though, as their capacity expanded more than the other technologies combined in 2017. (Carbon Brief)

Brazil’s beef – Brazil’s presidential favourite Jair Bolsonaro would abolish Brazil’s environment ministry and withdraw from the Paris Agreement, exposing the world’s largest rainforest and its indigenous owners to criminal gangs of loggers and miners. Bolsonaro is sailing towards Brazil’s presidency after taking a near-majority in a first round vote on Sunday, receiving 46% of the vote. He now faces an Oct. 28 run off with the Workers Party’s Fernando Haddad, who polled 29%. (Climate Home)

No money, no nonsense – Asked if Australia would be held to its target to reduce emissions by 26% to 28% from 2005 levels, Prime Minister Scott Morrison told 2GB Radio. He said: “No, we won’t … we’re not held to any of them at all. Nor are we bound to go and tip money into that big climate fund. We’re not going to do that either. I’m not going to spend money on global climate conferences and all that nonsense.” Australia gave $141 mln to the Green Climate Fund between 2015 and 2018. The $10 bln fund’s board meets next week to begin its replenishment programme amid the failure of the US to pay the $2 bln it pledged under President Obama. (Climate Home)

There’s money in misery – A top investment strategist for JPMorgan Asset Management sent a note to clients earlier this year with a dire forecast, Bloomberg reports. Despite global efforts to stop climate change, sea levels are likely to rise dramatically, threatening the 40% of Americans who live along the coast. On the other hand, there will probably be some investment opportunities in seawalls. “A storm surge barrier system protecting New York City and parts of New Jersey could cost $2.7 million per meter,” Michael Cembalest, the asset manager’s chairman of market and investment strategy, wrote in his annual “Eye on the Market” energy newsletter in April. He added that governments would probably struggle to pay that cost, perhaps turning to either bonds or outright privatisation. As the US grapples with a second straight year of record hurricanes, floods, and wildfires, a small but growing number of hedge funds, pension plans, and other investors are testing strategies to take advantage of those signs of climate change. Where they’re putting their money provides a glimpse into some of the likely tangible impacts from higher temperatures. The investments include storm and flood protection along the coast, desalination plants in drought-prone regions, new approaches to agriculture, and even land far from the ocean for when rising seas shift the real estate market.

Deep(water) pockets – Denmark-based Orsted is buying the US firm Deepwater Wind for $510 mln, giving the world’s largest offshore wind company access to the burgeoning market off the Atlantic coast. Deepwater Wind, which is owned by the hedge fund D.E. Shaw, has the only operational US offshore wind farm, a 30MW project off Rhode Island. However, Deepwater contains a vastly larger portfolio of over 3 GW worth of either planned or potential projects, and the purchase gives Orsted development rights for several regions of the US. The merged company will be called Orsted US Offshore Wind, with the deal expected to be completed by year’s end. (Axios)

Caucus confusion – Manitoba Progressive Conservatives were apparently caught off guard last week when their party’s Premier Brad Pallister abruptly announced he would be scrapping the province’s proposed carbon tax after receiving “no respect” from Ottawa. While Pallister had previously defended Manitoba’s flat C$25 carbon tax, the premier’s plan was said to have changed during a meeting with Prime Minister Trudeau in September, after “it became pretty clear” that the feds wouldn’t budge on their requirement for carbon taxes to rise by C$10 annually from C$20 in 2019, according to a government source. Pallister then told a small number of people of his plans to scrap the tax several days before the announcement, while most members of the Tory caucus found out the day of or when the premier made the announcement to the legislature. (CTV News)

And finally… Prize pair – Americans William Nordhaus and Paul Romer, pioneers in adapting the western economic growth model to focus on environmental issues and sharing the benefits of technology, won the 2018 Nobel Economics Prize. In a joint award that turned the spotlight on a rapidly shifting global debate over the impact of climate change, the Royal Swedish Academy of Sciences said the duo’s work was helping to answer basic questions over how to promote long-term, sustainable prosperity. In the 1970s, Nordhaus, already alarmed by the threat of global warming, began working on potential solutions. Gradually, he developed models to guide policymakers in balancing the economic costs and the societal benefits of combating carbon emissions. Nordhaus concluded that the most efficient approach was to deploy carbon taxes, applied uniformly to different countries. Many economists have since endorsed the taxing of carbon but, as you know, adopting the regulatory frameworks on a global scale has proven problematic and the world’s political leaders are failing to act amid widespread misinformation and misunderstanding amongst consumers. (Reuters, Press Herald)

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