CP Daily: Tuesday August 27, 2019

Published 23:21 on August 27, 2019  /  Last updated at 23:21 on August 27, 2019  /  Newsletter  /  No Comments

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

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TOP STORY

Q3 WCI auction settlement retraces from previous high, discount tightens

The California-Quebec current vintage auction settlement dipped from the WCI programme’s all-time high in May as entities sought additional discounts from lower secondary market prices this summer, results showed Tuesday.

INTERNATIONAL

Japan, World Bank target JCM offset scheme to pilot Paris Agreement carbon market

Japan and the World Bank have signed an MoU on the Joint Crediting Mechanism (JCM), aiming to use the offset programme to pilot the emerging international carbon market under the Paris Agreement.

Three nations announce GCF cash as G7 pledges aid to fight Amazon fires

The UK, France and Canada will double their contributions to the UN’s Green Climate Fund (GCF), the governments announced at the G7 summit on Monday, with Britain’s contribution amounting to a further $881 million and Canada’s some $226 million.

AMERICAS

California mine methane capture offsets risk non-additionality and increasing coal profitability -study

The design of California’s mine methane capture (MMC) offset protocol may incentivise non-additional emission reductions and allow coal operations to run longer by improving profitability, researchers said in a new study.

Connecticut resends RGGI Model Rule changes for final approval

Connecticut sent its revised RGGI regulation to install numerous post-2020 changes to a legislative committee on Monday after the state’s Attorney General’s office found the proposal legally sufficient, a state official confirmed to Carbon Pulse.

EMEA

EU Market: EUAs sink with energy complex as economic outlook sours

EUAs dipped early on Tuesday as a weak economic outlook weighed on the energy complex to push prices back towards last week’s non-week low.

ASIA PACIFIC

China gives regions power to impose natural resources tax

China passed legislation this week allowing local governments to impose taxes on the mining and production of a wide range of natural resources, including fossil fuels.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Insulting offer – Brazilian President Jair Bolsonaro said he wants French President Emmanuel Macron to withdraw the “insults” made against him before he considers accepting a $20 million offer from the G7 nations to help fight forest fires in the Amazon. The two leaders have become embroiled in a deeply personal and public war of words in recent days, with Bolsonaro mocking Macron’s wife and accusing the French leader of disrespecting Brazil’s sovereignty. Macron has called Bolsonaro a liar, and said Brazilian women are probably ashamed of their president. (Reuters)

Backstop backing up – Canadian environment minister Catherine McKenna has backed off a pledge to freeze the ‘backstop’ CO2 tax at C$50/tonne after 2022, saying a re-elected Liberal government would review the levy with provinces before deciding how to proceed. In June, McKenna said that the ruling Liberals did not plan to increase the carbon price once it reached C$50, which was a response to a Parliamentary Budget Office report that concluded Ottawa would have to raise the tax to C$102 to achieve its GHG reduction goals through exclusively relying on a CO2 price. However, in an interview with The Globe and Mail, the environment minister said that while the government had no plan to increase the tax, it would make a decision on future levels toward the end of the next mandate after consultations with provinces, territories, businesses, and Canadians more broadly.

Flat chat – Leader of Manitoba’s opposition NDP Wab Kinew has proposed a flat C$20 carbon tax if elected at the Canadian province’s election on Sep. 10, running against the federal Liberals’ ‘backstop’ mandate of a CO2 price that rises by C$10 annually until hitting C$50 in 2020. Kinew said that he would expect negotiations with the federal government to “go very well” on the topic, despite the fact that Ottawa refused to accept the flat C$25 carbon tax proposed by Manitoba’s current Progressive Conservative Premier Brian Pallister. That led Pallister’s administration to pursue its own legal challenge against Ottawa’s backstop carbon pricing plan, (CBC)

Back on track – Germany’s coal exit roadmap would make it possible to reach national 2030 emissions reduction targets in the energy sector, according to an EWI economic research institute study commissioned by the economy ministry of German state North Rhine-Westphalia. It found power prices are poised to rise, although the bulk of price increases would be due to higher EU ETS prices against which EWI recommends supporting energy-intensive companies to ensure they remain competitive internationally. (Clean Energy Wire)

Balanced fifty – Putting a CO2 price of €50 per tonne would allow for a “socially balanced” climate policy in Germany, a study commissioned by think-tank Agora found.  It said social balance is achieved by repaying all of the earnings to citizens and low-income households on balance will even be better off.  (Clean Energy Wire)

Air race – With the rise of flight shame, airlines worldwide are racing to find an answer for how to decarbonise and reduce their climate impact but the challenge is that there are no easy near-term ways to reduce emissions meaningfully. Different airlines are taking quite separate approaches, with some believing one of the most promising areas is alternative low-carbon fuels while others are pinning their hopes on electric aircraft and hybrid battery-fuel designs. (Financial Times)

Material matters – Oil major ExxonMobil and tech company Mosaic Materials announced an agreement on Monday to explore the advancement of a technology to remove CO2 from emissions sources. Mosaic is researching a process that uses porous solids, known as metal-organic frameworks, to separate carbon dioxide from air or flue gas. The agreement will enable further discussions between the two companies to evaluate opportunities for industrial uses of the technology at scale. (Baton Rouge Business Report)

Green bond growth – Australia’s green bond market is set to reach record highs this year, after A$3.9 billion ($2.6 bln) worth of new bonds were issued in the first half of the year, putting it on track to beat last year’s A$6 bln, according to a new Climate Bonds Initiative report. As much as 43% of the funds were raised for green building, with energy getting 25% and transport 24%. Australia remains the third biggest green bond market in the Asia-Pacific and China and Japan, and the tenth largest in the world. (Nasdaq/IFR)

Price postponement –  The Denver mayor’s office and City Council on Monday announced they will push back a vote on a municipal carbon tax until June 1, 2020 that was originally due for a vote last night. The proposal would have established a CO2 price on electricity and natural gas for commercial and industrial customers in the Colorado capital, but was criticised by Mayor Michael Hancock and business leaders for having been hastily put-together in recent weeks. Instead, the new agreement hashed out between seven City Council members who supported the carbon tax and the mayor creates the Office of Climate Action, Sustainabilitiy, and Resiliency and a new stakeholder process to look at work the city is currently doing on climate change and what more can be done. (The Denver Channel)

And finally…  Unlucky number 7 – US news network CNN on Tuesday announced the details of its clime change town hall on Sep. 4 for the 2020 Democratic presidential candidates. Due to the Democratic National Committee (DNC) having rejected a resolution this past week that would have allowed candidates to appear on the same stage simultaneously outside of events sanctioned by the party, CNN’s climate crisis will run for seven hours to allow all 10 candidates time to speak from 1700-midnight Eastern Daylight time. Some observers and environmental campaigners on CNN expressed scepticism that anyone other than climate activists would devote nearly one-third of the day to watching the town hall.

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