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European carbon prices skyrocketed to a new 11-year high near €27 on Wednesday, but a poll of analysts showed a consensus view that EUAs will come back down to earth in the near term.
European carbon prices shot to their highest in almost 11 years on Wednesday, as speculative buying was fuelled by rising gas prices and indications that Brexit was poised for a longer extension.
Compliance entities in the WCI cap-and-trade programme appear to be cutting their long positions in the secondary market as California Carbon Allowance (CCA) prices have jumped over the past six weeks, according to US Commodities Futures Trading Commission (CFTC) data.
California issued more than 646,000 California Carbon Offsets (CCOs) across six projects, and forestry projects made up a bulk of the new issuances, regulator data showed Wednesday.
A rise in voluntary market issuances over the past year could signal that entities are preparing for the start of multiple international emissions trading regimes in the next decade, but some cautioned there still may be too much risk to engage in early purchasing.
South Korea sold all 1.59 million KAUs on offer at Wednesday’s auction, with the sale clearing 4.3% below the day’s closing price in the secondary market.
New Zealand has made a seasoned carbon market negotiator its new climate change ambassador.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Big discount – Bloomberg reports that the cost of reaching global climate goals is “falling rapidly as wind and solar prices plummet” and policy makers push electrification as the main tool to cut pollution, according to the International Renewable Energy Agency (IRENA). IRENA has revised down its estimates for the global investment needed in clean energy to meet the Paris Agreement goals, Bloomberg notes: it now says $115 trillion is needed, down from $125 trillion a year ago. IRENA’s director-general Francesco La Camera tells Bloomberg that the significant investments needed “will more than pay off in curbing emissions and in health and environmental benefits”. (Carbon Brief)
Investors be warned – If the planet heats up by more than two degrees, it’s going to get a lot harder to make money. That’s the conclusion of investment advisory firm Mercer, which modelled the financial fallout from 2C, 3C, and 4C of global warming through 2100 in a report released Monday. The report marks one of the first attempts to model sector-specific investment risks from climate change over decades. If warming is limited to no more than two degrees, coal and other fossil fuels lose the most in value, because countries have shifted toward cleaner energy. If temperatures rise further, sectors with the biggest losses will include industrials and agriculture. (Bloomberg)
Too low to flow – Germany’s Rhine River could be impassable to ships again this summer if Europe has another drought, reports Bloomberg. German and Swiss scientists say that heavy snowfalls in the alpine regions at the river’s source are no guard against a repeat of low river levels, which last October blocked a key choke-point for supplies headed to some of Europe’s largest utilities and manufacturers. Last year’s impasse was severe enough to dent German economic growth and ETS emissions and underlines how even advanced economies are feeling the impact of global warming. Chemical industry heavyweight BASF was forced to halt the production of plastics at one of its plants, for example. (Clean Energy Wire)
Fossil fuel fast-track – President Trump has unveiled long-awaited executive orders aimed at speeding up pipeline permitting and limiting the ability of US state governors to use the Clean Water Act (CWA) to block and delay these fossil fuel projects. In addition to directing the EPA to update guidance on states’ authority under the CWA, the first order also takes aim at activist investors that have pressed oil companies to address climate change. Specifically, it calls on the Labor Department to look into whether such funds are complying with the Employee Retirement Income Security Act. The second order also gives Trump “inherent authority” over foreign affairs, including cross-border infrastructure permits, such as those issued last month to the Keystone XL pipeline. (Politico)
Food for thought – Four major food companies that form the Sustainable Food Policy Alliance (SFPA) on Wednesday released a set of climate policy principles and urged the US government to adopt measures to reduce economy-wide GHGs. The SFPA members, consisting of Danone, Mars, Nestle, and Unilever, recommended strategies including a carbon pricing mechanism to keep global emissions well below 2C above pre-industrial levels, as well as clean energy deployment, utilising agriculture and forests to sequester carbon, and implementing predictable and consistent regulation.
Back for seconds – The US Senate Committee on Environment and Public Works (EPW) on Wednesday advanced two climate-related bills by voice vote for the second straight year. The first bill was the USE IT Act that promotes carbon capture, utilisation, and storage (CCPUS) technologies, while the Diesel Emissions Reduction Act (DERA) to lower nitrogen oxide emissions, as well as black carbon and CO2. Those bills did not receive full floor votes in the upper chamber during last year’s session.
Not ‘Chi’ about renewables – The Chicago City Council on Wednesday unanimously voted to establish the goal of transitioning to 100% renewable energy by 2035, becoming the largest US city to make the commitment. The resolution also calls for the complete electrification of the Chicago Transit Authority’s bus fleet by 2040, and directs the mayor’s office and other community groups and stakeholders to develop a community-wide transition plan by Dec. 2020.
Capacity class – California regulator ARB released a list of the first Hydrogen Refuelling Infrastructure (HRI) and Direct Current Fast Charging Infrastructure (FCI) stations that will be eligible to receive Low Carbon Fuel Standard (LCFS) credits based on the capacity of the installations. The ARB last year approved amendments to the programme that allow select zero-emissions vehicle (ZEV) infrastructure types to receive these LCFS credits, which California officials said was a “philosophical departure” by not rooting the credits in verified emissions reductions. Of the 451 FCI ports approved, California-based electric vehicle company Tesla successfully applied for 441 of them. On the HRI side, hydrogen fuelling company First Element was approved for 19 of the 34 units, followed by Shell (14) and Air Liquide (1).
Redemption song – For a pair of former Deutsche Bank lawyers who nearly spent Christmas in jail in 2012, a ruling from a German court last month was at least partial – if belated – redemption. A Frankfurt appeals court last month ruled that there wasn’t enough evidence for an arrest warrant to support prosecutors suspicions that the two in-house lawyers – Michael Schroeder and Peter Lindt – were conspiring to obstruct a probe into a carbon-emission tax scheme. (Bloomberg Law, $)
Seed-shootin’, tree-plantin’ drones – In a remote field south of Yangon, Myanmar, tiny mangrove saplings are now roughly 20 inches tall. Last September, the trees were planted by drones. It’s early proof of technology that could help restore forests at the pace needed to fight climate change. (Fast Company)
And finally… Footing the bill – Today’s youth will have to dramatically decrease their carbon footprint by compared to their grandparents in order to meet the temperature goals of the Paris Agreement, according to new analysis from Carbon Brief. The outlet explains that to limit warming to 1.5C above pre-industrial levels, the average person born today can only emit an eighth of the lifetime emissions of someone born in 1950. The analysis is accompanied by a new interactive feature that shows the size of each person’s carbon budget during their lifetime based on where and when they ere born.
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