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Nearly 400 million more carbon allowances will be withdrawn from the EU ETS through next summer and inserted into the MSR, the European Commission announced late Wednesday in its annual ‘TNAC’ update, with the oversupply figure rising slightly year-on-year to top analyst expectations.
Environmental justice groups urged 10 US jurisdictions to explore options outside of a cap-and-trade programme to regulate emissions from the transportation sector, claiming that model would not guarantee reductions in disadvantage communities.
new coalition of multinational fossil fuel and industrial CEOs, environmental groups, and think-tanks issued a call Wednesday for the US Congress and President Donald Trump to enact a market-based climate policy along with other initiatives to drive emission reductions and promote equity and durability.
Canadian federal Conservative leader Andrew Scheer has suggested his party’s long-awaited climate plan will aim to hit the country’s Paris Agreement targets by relying more on the purchase of international offsets compared to domestic abatement spurred by carbon pricing.
Oregon Democrats are planning to advance a WCI-modelled cap-and-trade bill out of committee on Friday with additional technical amendments to the proposal, the bill’s author told Carbon Pulse.
US Secretary of Agriculture Sonny Perdue could back a carbon market for the sector to stimulate more revenue for farmers, and an upcoming appropriations bill may urge his agency to research the development of that option, a federal congressperson told a news outlet.
Germany should push for reforms to loosen EU state aid rules and enable the government to provide more support to EU ETS-covered heavy industries, a prominent environmental think-tank has proposed.
German-based utility RWE slowed its hedging rate over Q1 but still has a slightly advanced position compared to a year ago, it said in financial results Wednesday, giving a slightly bearish signal for EUAs.
EUAs briefly climbed back above €26 on Wednesday, recovering in another afternoon surge after wider financial markets celebrated US President Donald Trump appearing to soften his line on EU trade tariffs.
China has released provincial targets for its mandatory renewable energy credit scheme, which will launch in a test version this year before starting properly in 2020.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Non-flying Dutchmen – The Netherlands government will introduce a €7 levy per air passenger in 2021 if the EU does not manage to set up a pan-European tax, as momentum builds behind calls to crack down on aviation’s rising environmental impact. The Netherlands announced that its draft flight tax bill would mean passengers departing Dutch soil will be charged a maximum of €7.50. Cargo planes will also be charged, at a rate of €1.92 for quiet planes and €3.85 for noisy aircraft. (EurActiv)
Stumping up – Ireland could have to pay up to €150 million for carbon units to help it meet its EU emissions targets for 2020, according to the Minister for Communications Climate Action and Environment. Speaking at a conference on making Ireland a leader in climate action, Richard Bruton said that the country is likely to need to buy 16 Mt. He also said that the Department of Finance has instructed all governments departments and agencies engaged in decisions about long-term planning and infrastructure developments to assume Ireland’s domestic carbon tax, which is currently charged at a rate of €20 per tonne, will be as high as €265 per tonne by 2050. The government recently accepted a recommendation from the Oireachtas Joint Committee on Climate Action to set out a trajectory for the carbon tax to be raised to €80 per tonne by 2030. (RTE)
Unfounded – There is so far little evidence of carbon leakage by German companies covered by the EU ETS, according to a new study by the Mercator Research Institute on Global Commons and Climate Change (MCC) and published in Energy Economics. The researchers used the Bundesbank’s confidential database on direct investments to determine for both affected and non-affected companies how their investments outside the EU have developed. “For the vast majority of German companies under the EU ETS which are internationally active, there is no causal increase in investment in countries outside the EU,” MCC said. “In the energy-intensive sectors, the effect is particularly small – which is plausible, because capital costs are usually high and relocations are thus expensive.”
You can afford it – A new report by Resources for the Future (RFF) investigates the opportunity for the expansion of carbon pricing in six US states. Currently 13 states have, or are planning to implement, carbon pricing via cap-and-trade programmes. The report found that in those states, the cost of achieving emissions reductions is small as measured by the price of allowances and the incremental cost of resources needed to achieve those goals. “Carbon pricing contributes about 21% of the emissions reductions that are achieved, and about 9% of the emissions reductions would be achieved even without a policy due to transitions in the electricity sector,” the authors said. “The low costs and low allowance prices of achieving the emissions caps suggest more ambition may be plausible without incurring substantial cost.” The report also evaluates policies to directly promote renewable energy, with modelling indicating that carbon pricing will be more effective at reducing emissions than a policy focused exclusively on encouraging increased electricity generation from wind and solar. The six states examined include North Carolina and Pennsylvania, which are contiguous to other RGGI states and thus potential electricity trading partners. They also considered a group of four upper Midwestern states: Minnesota, Wisconsin, Illinois and Michigan.
Unearthed – A third party report of the impact of the Canadian federal carbon tax on Saskatchewan’s economy has been released after the province decided not to make it public. Commissioned by the provincial government, the $109,000 report was never shared with the public, some say because it didn’t reflect the government’s hard stance against the ‘backstop’ levy. Climate Change Policy Modelling and Economic Impact Analysis, conducted by consultancy Navius, said the province’s plan to combat climate change was sufficient but that Ottawa’s levy likely wouldn’t make a noticeable economic impact. (CTV)
ETS housekeeping – New Zealand is inching closer to the end of a long, major ETS reform process, but it is also busy making minor adjustments to the scheme. In a new consultation paper, the environment ministry proposes to exclude bulk import of synthetic GHGs from the ETS because a combination of policy settings is causing a competitive disadvantage to reefer exporters. If adopted, that would take some 70,000 MtCO2e per year out of the programme. The ministry also proposed to change the rules for imports of coal-based products in order to avoid double-counting, and make some adjustments to the default emissions factors for natural gas.
Greening the US military – Democratic presidential candidate Elizabeth Warren said the US military should strive to achieve net zero carbon emissions for all non-combat bases and infrastructure by 2030 and should take other steps to prepare for the changing environment. In an opinion piece published on Medium on Wednesday, Warren said the Pentagon already recognises the threat of climate change, but the Trump administration and Congress have failed to enact meaningful action to address it. In addition to the 2030 goal, she said her proposal would dedicate funding to adapt bases to reduce climate impacts, require contractors to pay a small fee if they are not net zero, and would invest billions in a 10-year research and development programme for microgrids and advanced energy storage.
Don’t forget the batteries – The Department of Energy (DOE) asked for an additional $105 million in funding for an advanced energy storage initiative, according to a budget justification. The funding would develop technologies for creating more flexible generation and more flexible load that would help increase the reliability and resiliency of the US power grid. If approved, the initiative would also create “aggressive, achievable, and comparable goals for cost-competitive energy storage services and applications”. The practices could help states, such as California, who are looking to adopt more aggressive renewable generation goals.
Driving forward – Global sales of gasoline and diesel vehicles are declining as electric models rise to dominance in passenger cars, buses and light commercial vehicles, according to BloombergNEF’s latest Electric Vehicle Outlook 2019. The report shows that electrics are taking up 57% of the global passenger car sales by 2040, whereas electric buses are set to hold 81% of municipal bus sales by the same date. Heavy trucks will prove the hardest segment for electrics to crack, but electric models will take up 56% of light commercial vehicle sales in Europe, the US and China within the next two decades, and 31% of the medium commercial market.
And finally… Tax pollution, not people – Governments around the world must introduce carbon taxes, halt plans for new coal plants, and accelerate the closure of existing ones if damage to the Pacific from climate change is to be limited, the UN secretary general told Pacific leaders on his first visit to the region. Antonio Guterres met leaders of Pacific countries in Fiji, on a trip that will also see him visit Vanuatu, considered one of the countries most vulnerable to natural disasters due to climate change, and Tuvalu, which is at risk of sinking under rising waters. Guterres acknowledged the region was “on the frontline of climate change”. “My messages to governments around the world from the Pacific are clear: first, shift taxes from salaries to carbon. Tax pollution, not people. Second, stop subsidising fossil fuels. Taxpayer money should not be used to boost hurricanes, spread drought and heatwaves, melt glaciers, and bleach corals. Third, stop building new coal plants by 2020.” (The Guardian)
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