CP Daily: Tuesday June 4, 2019

Published 00:01 on June 5, 2019  /  Last updated at 00:22 on June 5, 2019  /  Newsletters  /  No Comments

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

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TOP STORY

China takes key step towards launching emissions trading market

China’s environment ministry has ordered provincial governments to produce lists of power plants to be included the national ETS and get them ready to open accounts in the CO2 permit registry.

EMEA

Netherlands unveils carbon floor price to start in 2020

The Netherlands government on Tuesday proposed a law to set a minimum CO2 price for its power sector from next year.

Too risky for UK emitters to stray from normal EU ETS compliance plans amid Brexit uncertainty -analyst

It’s probably too risky for UK emitters to delay buying EU carbon allowances for compliance until they have clarity on Brexit, a senior analyst said Tuesday, foreshadowing several related scenarios that could prove bearish for EUA prices.

EU Market: EUAs rebound after extending 2-month low

EUAs rebounded from a fresh two-month low on Tuesday as bargain-hunting buyers stepped in despite building auction supply pressure.

AMERICAS

RGGI auction expected to clear underneath secondary market price, traders say

Market participants anticipate the June RGGI auction to settle underneath the secondary market, breaking a year-long trend of above-market settlements in the northeast US cap-and-trade programme.

Ontario govt’s climate plan would see GHG reduction costs soar compared to federal ‘backstop’ -report

The Ontario Progressive Conservative government’s suite of climate policies would significantly increase costs for the same amount of emissions abatement that would be achieved under Ottawa’s ‘backstop’ carbon levy and output-based pricing system (OBPS), a study found Tuesday.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Drop confirmation – EU ETS emissions fell 3.9% in 2018, with big cuts from the power sector eclipsing a 0.7% decline from industrial installations and making up for a 3.9% gain in emissions from intra-EU flights, the European Commission said late on Tuesday. It added that the drop in GHG output from roughly 11,000 installations and 500 airlines contrasted with 2% GDP growth across the 28-nation bloc. The final figures confirm last year’s larger-than-expected drop revealed in preliminary data on Apr. 1. Read Carbon Pulse’s comprehensive article on the annual data dump, including a breakdown the data by country and sector.

Coal be gone – Chile has vowed to go carbon neutral by 2050 and to close all of its 28 coal plants 10 years prior to that date. Coming ahead of the country’s hosting of the COP25 UN climate talks in Santiago this December, Chilean President Sebastian Pinera also pledged to close eight of the coal-fired plants by 2024, slashing the share of coal in the electricity grid to 20% from 40% in five years. Some observers said no other country in the world had pledged to cut its coal use so drastically from such a presently high share in the economy. (Climate Home)

Bound by Biden – Former US vice president and current Democratic presidential frontrunner Joe Biden unveiled in his climate and energy strategy on Tuesday, vowing to go “well beyond” former President Obama’s policies. Biden called for the US to achieve net zero GHGs no later than 2050, supplemented by a bill that creates “legally binding” emissions cuts with an “enforcement mechanism” to achieve the 2050 goal. His campaign team confirmed to Axios that the plan would include a price on carbon, and other measures would target a “major diplomatic push” to have nations increase their climate ambition, implement “aggressive” methane limits for the oil-and-gas sector, and weave climate into trade policies and quotas on emissions-intensive goods. Biden also praised progressive Democrats’ “Green New Deal” resolution calling for a 10-year national mobilisation period to drive national emissions to zero, but stopped short of formally endorsing it. The former VP had faced a flurry of criticism last month after a Reuters article reported his campaign would take a ‘middle ground’ approach to climate policy, potentially including the promotion of natural gas. However, some media outlets pointed out that multiple passages in Biden’s proposal appeared to lift passages from letters and articles from different organisations.  The campaign told Business Insider that “several citations were inadvertently left out of the final version” of the document.

Warren worldwide – Biden’s plan came as fellow presidential contender and US Senator Elizabeth Warren (D) revealed the next component of her own climate policy on Tuesday. The Massachusetts lawmaker would commit the federal government to spend $150 mln annually over the next decade on low-carbon technology, increase energy research funding tenfold, and fund a $100 bln Green Marshall Plan to aid poorer countries projected to suffer the worst as global temperatures rise. That plan invokes the post-World War II Marshall Plan aid package from the US that helped rebuild Western Europe. Other components of Warren’s platform would add 1.2 mln jobs by 2029 and require companies selling clean technology to the federal government to pay a $15/hour minimum wage, respect union organising, and guarantee at least 12 weeks of paid leave. (Huffington Post)

Flexible friend – UK cabinet ministers have agreed to carry forward past “over-performance” in CO2 reductions from the country’s binding domestic carbon budgets, going against the advice of its Committee on Climate Change to not take advantage of the legal loophole. This effectively slows down near-term action as the government prepares to raise its longer-term ambition by adopting a net zero 2050 goal. (Financial Times, Carbon Brief)

Brexit ETS – The UK’s poll-leading Brexit Party has said it supports a UK-only ETS, seemingly reversing previously sceptical views by many of its members on the existence of manmade climate change. At a party rally in Scunthorpe, where more than 3,000 British Steel workers are anxiously waiting to know their future following the company entering insolvency last month, newly-elected Brexit Party MEPs said the UK government should implement new public policy changes “now” to favour industry, against EU regulations, immediately and not wait until Oct. 31. They pushed policies that would include the UK being able to favour national industries, a competition regime that provides competition only within the UK and that favours UK consumers, and a carbon trading regime based only on UK companies. (Yorkshire Post)

Decisions, decisions – The German government will decide whether to follow a sectoral emission reduction approach or a general pricing of carbon emissions in its bid to get on track in achieving the country’s binding 2030 climate targets, Chancellor Angela Merkel said at an event by the government’s sustainability council (RNE) in Berlin. “Transport, buildings and agriculture so far have no form of pricing but only a more or less effective mix of measures” to reduce CO2 emissions, Merkel said. The Chancellor added that the government had commissioned a comprehensive report on the effects and possibilities of implementing a carbon price in Germany, which would be discussed in the country’s so-called climate cabinet by mid-June, and serve as a platform for any further action. However, Merkel said that carbon pricing would be most effective in a joint European approach, which is why she would sound out the potential for collaboration with France and other neighbours in this regard. Merkel’s climate cabinet has said it will make key decisions about climate action legislation and measures in September and adopt these by the end of 2019. Germany is under pressure to meet its goal of cutting GHG emissions by 55% by 2030. Meanwhile, the German conservative party CDU has said it will work on a reform of the country’s system of taxes and levies on energy to better align fiscal measures with climate action. The leader of Chancellor Angela Merkel’s governing party, Annegret Kramp-Karrenbauer, said the CDU would come up with proposals for a reform of energy taxation but stopped short of promising that a CO2 price would be part of these reforms, Tagesspiegel Background reports. (Clean Energy Wire)

All in vain – It cannot be taken for granted that Germany’s plan to phase out coal by 2038 will actually decrease CO2 emissions on the European level, according to the Potsdam Institute for Climate Impact Research. On the contrary, the phaseout could even increase emissions due conflicting factors that result from the plant closures, they found. Firstly: If coal-fired power plants in Germany are shut down, the supply of electricity in the market decreases and the price of electricity rises accordingly. As a result, the remaining coal-fired plants will increase their production and thus emit more CO2. Secondly: Germany’s coal phaseout will reduce the demand for EUAs, and the price will fall. In turn, electricity producers in other countries buy more of the then cheaper allowances and hence increase their CO2 emissions. So eventually emissions reductions in Germany will be neutralised. Then, the MSR will do most of its supply reduction before 2035, the researchers added – before the majority of the emission cuts are achieved by the German phaseout. “The bottom line is that the ETS in its current form cannot guarantee that the coal phase-out will bring by additional emission reductions,” they said. To make sure the coal phaseout really helps stabilise the climate, the researchers urged it to be combined with a minimum price for CO2 or the cancellation of existing emission certificates. Read the study (in German).

Reward > risk – Some 215 of the world’s largest listed companies forecast that climate change could cost them a total of $970 billion in extra costs due to factors including hotter temperatures, chaotic weather, and pricing of emissions, with much of the pain due in the next five years, investor-backed non-profit CDP said. The study found the companies saw potential opportunities worth $2.1 trillion from climate action such as faster-than-expected demand for electric vehicles to investments in renewables. (BusinessGreen)

So sorry Pacific Gas & Electric CEO Bill Johnson has apologised for the company’s role in the 2018 wildfires and laid out changes intend to ensure the utility did not face similar issues in the future, according to an op-ed published in the Sacramento Bee. Johnson said the company under his guidance will focus on “the fundamentals of operating a utility system”, fairly compensate all wildfire victims, and continue to help California reach its climate and carbon-free goals. Some entities had worried that PG&E could back away from its climate ambitious in the wake of its bankruptcy filings, causing the state to fall short of its long-term climate goals.

FERC findings – A US appeals court on Tuesday upheld on procedural grounds Federal Energy Regulatory Commission (FERC) orders in a case testing the agency’s GHG considerations in natural pipeline reviews. In Lori Birckhead et al. v. FERC, a three-judge panel for the US Court of Appeals for the District of Columbia dismissed the petitioners’ question of whether FERC’s orders regarding a natural gas pipeline project ran counter to a previous court order, explaining that the petitioners failed to raise the questions at the appropriate time. However, the court expressed “misgivings” about FERC’s “less-than-dogged” efforts to obtain information for its National Environmental Policy Act review. (S&P Global Platts)

June of JetBlue – US airline JetBlue announced Monday that it is partnering with non-profit organisation Carbonfund.org to offset the CO2 emissions for all customers travelling on all its flights in the month of June. The organisation estimates that some 700,000 tonnes will be offset from this process, with the credits coming from the Envira Amazonia REDD Project in the state of Acre, Brazil. The project, which is certified by the VCS and Climate, Community, and Biodiversity Standard (CCBS) with gold distinction, spans some 200,000 hectares in the state and is financed and implemented by Carbonfund.org’s wholly-owned subsidiary CarbonCo.

And finally… Chaos reigns – Society could collapse by 2050 if serious climate mitigation efforts aren’t taken in the next decade, claims a new paper from Australian climate policy think-tank Breakthrough National Centre for Climate Restoration. The study, authored by a climate researcher and former fossil fuel executive, looked at a scenario that begins with world governments “politely ignoring” the advice of scientists, resulting in global warming of 3C by mid-century. That scenario would lead to 35% of the world’s land area and 55% of the population being subject to more than 20 days of lethal heat conditions, “beyond the threshold of human survivability,” the authors hypothesised. As droughts, floods, and wildfires ravage the land, entire ecosystems would collapse, turning more than 1 bln people into climate refugees. Armed conflicts over resources, perhaps culminating in nuclear war, is likely, the paper said, leading to “outright chaos” and perhaps “the end of human global civilization as we know it.” (Live Science)

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