CP Daily: Monday March 25, 2019

Published 02:01 on March 26, 2019  /  Last updated at 02:06 on March 26, 2019  /  Newsletter  /  No Comments

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

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TOP STORY

POLL: Large drop seen in EU ETS emissions in 2018, resuming annual downtrend

Emissions covered under the EU ETS probably resumed their annual downtrend in 2018, falling on the back of a large decline in CO2 output from the power sector, according to a poll of analysts.

AMERICAS

Oregon makes tweaks to revenue use, industrial allocation in revised ETS proposal

Oregon lawmakers tweaked cap-and-trade legislation on Monday that would alter allocation levels for industrial sources and funnel additional money to end consumers in an attempt to build support for the proposal.

Ontario “closes book” on cap-and-trade, refunding a fraction of allowance purchases

Ontario has “closed the book” on its brief foray into carbon trading, refunding emitters for only a fraction of the tens of millions of unusable permits bought before the government abruptly cancelled the programme last year.

Stakeholders calling for New Jersey RGGI programme to address leakage

Several stakeholders are urging New Jersey to explore ways to address emission leakage that could occur if the state joins the northeast US RGGI carbon market, according to public comments obtained by Carbon Pulse.

INTERNATIONAL

Global energy-related CO2 emissions spike 1.7% in 2018 to hit another record -IEA

Energy-related CO2 output shot up in 2018 to hit a second consecutive yearly high as Asian coal growth and the US oil and gas boom overshadowed global progress in renewable energy and energy efficiency, the International Energy Agency (IEA) said in a report released Tuesday.

EMEA

EU Market: EUAs rebound from 3-week low after stronger auction

EU carbon prices on Monday pared the previous session’s losses as a stronger auction lifted sentiment in defiance of Brexit-related caution.

ASIA PACIFIC

NZ firm puts carbon forest on the market

A New Zealand company is seeking buyers for a forest property that comes with a batch of more than 600,000 carbon allowances.

COMMENT

Carbon leakage, trade exposure, and the Canadian federal backstop

The corporate carbon pricing landscape across Canada is anything but a level playing field. For one, some provinces have implemented their own system, while others are complying with the federal plan. And even within this plan – the Federal Backstop – different sectors are expected to implement different benchmarks. Here is how Canadian industry is navigating its tricky carbon policy framework.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Walk the talk – UN Secretary General Antonio Guterres is calling on world leaders to bring plans, not speeches to a climate summit he is hosting in September. His representatives wrote to heads of government last week, urging them to “demonstrate a leap in collective national political ambition and massive low-emission movements in the real economy”. Organisers do not intend to give politicians the UN podium for speeches, in a departure from the typical format of such events. (Climate Home)

US federal foofaraw – Utah Senator and former Republican presidential nominee Mitt Romney is leading private discussions among GOP senators about crafting a legislative response to climate change, possibly through a market-based mechanism, the Hill reports. Romney told the news outlet that he and Senators Lindsay Graham and Lamar Alexander are looking to establish a federal programme that would incentivise businesses to come up with new technologies to reduce carbon emissions. Graham worked with Senators John Kerry (D) and Joe Liebermann (I) about a decade ago on a proposal to curb carbon emissions through a market-based system, increase nuclear energy, and find a compromise on additional onshore and offshore oil and gas exploration. Elsewhere on Capitol Hill, the Republican-controlled Senate, led by Majority Leader Mitch McConnell, may hold a procedural vote on Congressional Democrats’ “Green New Deal” as early as Tuesday. The measure on the non-binding GND resolution will require 60 votes and is expected to fail, both because Republicans command a majority and because many Democrats plan on voting “present” to protest what they have called an openly political show-vote. “Mitch McConnell will be calling for a vote tomorrow on the #GreenNewDeal without any hearings, any witnesses, or allowing any public debate on the resolution,” GND co-sponsor Senator Ed Markey tweeted on Monday. (NBC News)

Warning light – Climate change is becoming increasingly relevant to central bankers because losses from natural disasters could spark a financial crisis, a Federal Reserve Bank of San Francisco researcher found. “Climate-related financial risks could affect the economy through elevated credit spreads, greater precautionary saving, and, in the extreme, a financial crisis,’’ Glenn Rudebusch, the San Francisco Fed’s executive vice president for research, wrote in a paper published Monday. “There could also be direct effects in the form of larger and more frequent macroeconomic shocks associated with the infrastructure damage, agricultural losses, and commodity price spikes caused by the droughts, floods, and hurricanes amplified by climate change,’’ according to Rudebusch, who is also a senior policy adviser at the reserve bank. (Bloomberg)

True costs – Nearly three quarters of existing US coal plants cost more to operate last year than replacing them with local wind and solar power, according to a new report released Monday. The analysis, coming from think-tank Energy Innovation and software company Vibrant Clean Energy, suggests that most coal plants in the PJM region are uneconomic compared to nearby renewable resources. Additionally, nearly all coal plants in the US Southeast have become “substantially at risk to replacement by solar in 2025”, the report said. (Utility Dive)

True costs realised – The Navajo Nation has decided to stop pursuing the acquisition of a beleaguered coal-fired power plant in Arizona, sealing the facility’s fate to be taken offline and its associated coal mine to close later this year. A Navajo Nation Council committee voted 11-9 last week to stop pursuing the purchase of the 2.25 GW Navajo Generating Station, which with the Kayenta coal mine provides over 800 jobs to primarily Navajo and Hopi workers. A group of utilities that own the plant said in 2017 that economic pressures would force them to cease the facilities’ operations. (Climate Nexus)

Bad choices – South Korea has the highest stranded coal power asset risk in the world due to market structures, according to a new report from think-tank Carbon Tracker. The study finds that under a 2C temperature rise scenario, the country has $106 billion of stranded asset risk – the most of the 34 countries modelled. South Korea also risks losing the low-carbon technology race by remaining committed to coal, with 5.4 GW in capacity under construction and 2.1 GW planned, as well as several retrofits in various stages of planning. Carbon Tracker found that it would be cheaper for the country to build new solar PV than to operate existing coal plants by 2027, calling into question not only planned coal investments but also the economic viability of the current operating fleet. In addition, the planned retrofits could cost $3.6 bn, which will accelerate the competitiveness of renewables and could impact utility KEPCO’s finances.

Power up – Power trading volumes in Europe’s main wholesale markets fell by 1% to 9,270 TWh last year, but a rise in prices pushed the market’s notional value up 25% to a seven-year high, research firm Prospex said on Monday. The market turned over €459 billion in 2018 as global fuel demand and political support for the carbon emissions market drove up the price of wholesale contracts, Prospex, which has been monitoring the market since 2001, said in a report. (Reuters)

Voluntary shutdown – Certifier Gold Standard will halt access to its IHS Markit Registry for voluntary carbon credits from 1700 CET Tuesday until the launch of its new Gold Standard Impact Registry platform expected early Thursday. The new platform aims to track Gold Standard environmental assets and the climate and development impacts of certified interventions in an intuitive and user-friendly way.

And finally… Honesty is the best policy – Canadian think-tank Ecofiscal Commission released a report on Monday that tackles 10 myths about carbon pricing in the country. The group said that while Canada’s patchwork system of carbon pricing is designed well overall, continued progress is not guaranteed. It called for Canadians to have a “thorough and honest discussion” on carbon pricing, urging opponents of these policies to debate them based on the evidence. “Relying on myths or poor information is harmful not only to the debate over carbon pricing, but also to our broader public discourse,” Ecofiscal said. “We can do better.” The report comes ahead of the federal government’s backstop carbon levy of C$20/tonne taking effect in four provinces on Apr. 1.

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