CP Daily: Wednesday March 6, 2019

Published 23:35 on March 6, 2019  /  Last updated at 23:35 on March 6, 2019  /  Newsletter  /  No Comments

A daily summary of our news plus bite-sized updates from around the world.

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TOP STORY

ANALYSIS: Using Kyoto credits for Paris is risky home and abroad for Australia’s Labor

Australia is within its rights to use carryover Kyoto credits to meet its Paris goals, but experts find it hard to believe a Labor government would do so because the move would be seen internationally as undermining the Paris Agreement.

EMEA

EU court verdict could squeeze free carbon allowance allocation by nearly 10% -analysts

Power plants linked to industrial sites across the EU could see their annual free carbon allowance allocations slashed from next year if the EU court upholds an expert opinion, though it is unclear whether regulators will be able to oversee the move without further changes to auditing rules.

EU Market: EUAs retrace further from €23 as energy complex weighs

European carbon prices fell for a second straight day, unwinding more of the rally recorded over the past week and a half.

AVIATION

ICAO implements advisory body to review CORSIA offset units, though questions remain

UN aviation body ICAO announced Wednesday that it had enacted an advisory body to review emissions credits under its CORSIA global offsetting mechanism, but it was unclear whether it had reached further decisions on the panel’s membership and transparency.

AMERICAS

Connecticut sends RGGI regulations for final approvals

Connecticut regulators have sent on regulations to install the northeast US RGGI carbon market’s post-2020 Model Rule and still anticipate it being finalised by April, a government official said.

BITE-SIZED UPDATES FROM AROUND THE WORLD

The other ECB – French President Emmanuel Macron has thrown his weight behind the idea of an EU bank for climate investments, ahead of the bloc’s parliamentary elections this year. “Reconnecting with the thread of progress also means taking the lead in the ecological fight. Will we be able to look our children in the eye if we do not also reduce our climate debt?” Macron wrote in an op-ed on the renewal of Europe published on Tuesday in outlets across 28 EU states, “The European Union must set its ambition and adapt its policies accordingly with such measures as a European Climate Bank to finance the ecological transition”. Read more from Climate Home.

A costly miss – Missing its 2030 climate targets for the transport sector could cost Germany between €3 billion and €36 billion, according to a report by the NewClimate Institute commissioned by Greenpeace. Germany has committed to reduce national GHGs by 55% by 2030 compared to 1990 levels. Within the EU, Germany has made a binding commitment to reduce non-ETS emissions by 38% compared to 2005 levels by 2030. This represents a reduction from around 465 Mt currently to 296 Mt in 2030, the report said. For the transport sector, the German government has envisaged a CO2 reduction of 40-42% by 2030 compared to 1990, but it currently assumes that, without additional measures, transport emissions will fall by only 9% below 1990 levels by 2030. As such, many doubt that the country will be able to meet its target through abatement, meaning it will be forced to buy emission rights from other countries. And at an assumed price of €20-100/tonne, even if Germany manages to cut by 30%, the report estimates that it would still cost €3 billion to make up the shortfall. A task force – similar to the country’s coal commission – is currently working on proposals for cutting transport emissions. But a leaked internal working paper has already stirred public controversy, with transport minister Andreas Scheuer dismissing ideas such as a speed limit and fuel tax hikes because they “flow in the face of common sense.” Read Carbon Pulse’s piece on this emerging market: EU nations prepare ground for non-ETS carbon trade as tougher targets loom.

Looser rules – Australia this week introduced legislation that will make it easier for emitters covered by the Safeguard Mechanism to increase their GHG output. The changes will allow all facilities to update annually their emissions cap under the scheme based on production levels – so-called calculated baselines – instead of historical emissions. Previously, only new installations or those that significantly increased their activity levels were able to do this. The change has been underway since last year, but only got finalised now.

Dishonourable discharges – A group of 58 former military and national security officials have written to President Trump to warn against his plans for a committee to dispute administration climate change assessments, reports NPR. The letters says: “It is dangerous to have national security analysis conform to politics. Our officials’ job is to ensure that we are prepared for current threats and future contingencies. We cannot do that if the scientific studies that inform our threat assessments are undermined.” The government’s official position is that climate change is a threat to national security, though the White House appears to be singing a different tune. The letter adds: “Imposing a political test on reports issued by the science agencies, and forcing a blind spot onto the national security assessments that depend on them, will erode our national security.” The letter writers were organised by the American Security Project and the Center for Climate and Security. Separately, Barack Obama has warned that the world’s inability to effectively tackle climate change will toxify global politics, The Hill reports. “Imagine when you have not a few hundred thousand migrants who are escaping poverty or violence or disease, but you now have millions. Imagine if you start seeing monsoon patterns in the Indian subcontinent changing so that half a billion people can’t grow food and are displaced … Think about what that does to the politics of the world – not just the economics of it, not just the environment,” the former president said. (Carbon Brief)

Flight fail –  None of the world’s top 20 airlines have emissions targets after 2025 despite commitments to limit global temperature rises to 2C or below, a new study suggests. Research by the Transition Pathway Initiative at the London School of Economics looked at airlines’ corporate disclosures to see how carbon emissions are managed, finding that Easyjet is the only airline with a CO2 emissions intensity that will keep it below the 2C benchmarks after 2020. Additionally, the study found that non-CO2 contributions to climate change from aviation, such as the formation of contrails and clouds, are not incorporated into company disclosures or the models used to benchmark them. (The Independent)

They’ve got the power – Canada’s carbon pricing mandate is within the powers of the federal government, a point the provinces of Saskatchewan and Ontario have sought to refute in their respective lawsuits on the matter, according to new analysis. University of Ottawa law professor Nathalie Chalifour looked at three central issues that the provinces’ constitutional references will require the Courts to examine: that the Greenhouse Gas Polluting Pricing Act (GGPPA) is justified under the National Concern branch of constitution’s Peace, Order, and Good Government (POGG) provision; that the GGPPA could be justified under the Emergency branch of POGG; and examining the tension when jurisprudential tests accustomed to dealing with regulatory charges aimed at offsetting regulatory costs are applied to a behaviour-modifying economic instrument, such as carbon pricing. “The heart of the matter is whether Parliament has the jurisdiction to enact the GGPPA,” Chalifour wrote. “My article concludes that the legislation is intra vires.” (See Carbon Pulse’s coverage of the first carbon tax trial in Saskatchewan last month here and here.)

LEAD on carbon pricing – A group of US environmental organisations and non-profits are organising a Lawmaker Education and Advocacy Day (L.E.A.D) for May 21-22 in Washington DC to promote the business case for carbon pricing. Company representatives, led by a group of CEOs, will travel to the nation’s capital to meet with members of Congress and educate lawmakers as to why a price on carbon is a critical part of a larger response to climate change. The business leaders will not be endorsing any single proposal or bill, though representatives are welcome to signal support on an individual basis. Registration can be found here.

Ducking the blow – The EU is taking steps to phase out the use of palm oil in a bid to reduce deforestation levels and slow down global GHG emissions. But Malaysia, one of the exporting countries that will be hit hard by this, is making last-gasp efforts to avoid stricter regulations, according to Reuters. The Malaysian Palm Oil Council says proposed EU legislation has a number of loopholes, and is “preparing a very extensive list of our concerns, legal and technical assessments of the draft delegated act”.

Best in class – Italian utility Edison will invest €300 mln to make its 766MW gas-fired power plant the most efficient in Europe by 2021, the company said yesterday. The Marghera Levante plant will be fitted with a new combined cycle gas turbine, which will grow installed capacity to 780 MW and reduce emissions by 40% compared with the average Italian thermal plant. The new turbine will replace two existing units – one will be dismantled and the other kept as a reserve.

And finally… The markets knowIn a comment for Bloomberg, Noah Smith explains new research that has found that futures prices “followed the same warming trend that the scientific models predicted a decade in advance”. Smith adds: “This agreement between markets and models is important, because it means that investors either believe what the models say, or rely on other data to draw the same conclusion. By refusing to bet that recent warm years were an anomaly that will revert to the mean, market participants are basically ignoring conservative claims that climate scientists have misled the public to exaggerate the threat of warming. When forced to bet, investors bet on warming.” (Carbon Brief)

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