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Market participants largely see a bearish outcome for the upcoming RGGI Q3 auction due to weak quarterly emissions data, complementary state-led GHG-cutting efforts, and limited near-term mechanisms to tighten the Northeast US carbon market’s supply-demand balance.
Australian government agencies are gearing up to try and stimulate increased supply of carbon credits, backed by a carbon industry that despite the relative lack of demand is concerned over its flagging ability to develop new offset projects.
NZUs traded up to NZ$25 ($15.73) on Tuesday for the first time since late May as the bullish outlook from imminent regulatory changes outweighed restrictions from the fixed price option.
UK emitters will only be subject to a £16/tonne (€17.62/t) carbon tax from Nov. 4 if Britain leaves the EU without a deal at the end of October, the government said on Tuesday, countering expectations that the levy would be applied retrospectively for the whole of 2019.
EUAs fell to their lowest in 2.5 months on Tuesday in a choppy market on high alert for Brexit developments and weighed down by bearish technical signals.
Alterations to California’s Tropical Forest Standard (TFS) this summer did little to change supporters’ and opponents’ views of the possible precursor to jurisdictional REDD offsetting in domestic and international carbon markets, according to public comments released late last week.
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BITE-SIZED UPDATES FROM AROUND THE WORLD
Trade not tax – Germany’s ruling centre-right CDU/CSU parties continue to favour a national allowance trading system over a tax to reduce CO2 emissions in transport and buildings. CDU parliamentary group head Ralph Brinkhaus said Germany had to introduce a national price first, as it could not wait for EU neighbours to agree on a European solution. (Clean Energy Wire)
Scottish emergency – Scotland’s First Minister Nicola Sturgeon unveiled her partly-devolved UK government’s plans to tackle the climate emergency as the centrepiece of 14 measures for the coming year. She promised a “Scottish Green New Deal“, including for the Highland region to become the world’s first net-zero emission region for aviation by 2040 and emission-free railways by 2035. Sturgeon said she would also demand the power to hold a referendum on Scotland’s independence from the UK in the second half of 2020. (BBC)
Plastered with plans – A trio of US Democratic presidential hopefuls unveiled their climate plans in recent days, coming ahead of network CNN’s seven-hour climate town hall on Wednesday. New Jersey Senator Cory Booker’s plan would invest $3 trillion by 2030 to fund a transition to a 100% carbon neutral economy by 2045, while also putting a focus on environmental justice. Former Housing and Urban Development Secretary Julian Castro’s approach would phase out all coal plants by the end of the next decade in route to meeting the same net zero emissions target by 2045, while also creating a status for “climate refugees”. Minnesota Senator Amy Klobuchar’s plan would see the US reach net zero emissions five years later, while committing the country to rejoining the Paris Agreement and restoring the Obama-era corporate average fuel economy (CAFE) standards that the Trump administration is set to roll back. (The Hill, Politico)
Scaling up solar – Utility Dominion would have to add an additional 1,680 MW of solar generation to its Virginia fleet if the state joins the Northeast US RGGI ETS in 2021, according to new company documents. In a 2019 update to the company’s integrated resource plan, Dominion included an alternative generation scenario in which Virginia successfully links to RGGI in 2021 and a federal carbon pricing programme is put in place in 2026. Besides the new solar, Dominion would bring two new gas plants online as the ETS makes four of its large coal plants uneconomical. The company estimated the extra solar and gas would cost $6.5 bln. (Daily Press)
Green 14 – Fourteen disgruntled former NDP candidates in the Canadian province of New Brunswick are defecting and throwing their support by the federal and provincial Greens. In their announcement in Moncton on Tuesday afternoon, the members noted that federal Green Party leader Elizabeth May has visited New Brunswick, while left-wing NDP leader Jagmeet Singh hasn’t set foot in the Maritime province since winning the leadership in 2017. The New Democrats are polling at 13% nationally and 10% in the four Atlantic provinces, while the Greens have increased their national share to roughly 11%, according to polling aggregates compiled by CBC. (CBC)
And finally… Paris Act – US comedian Hasan Minhaj, host of the political satire Netflix show Patriot Act, interviewed Canadian Prime Minister Justin Trudeau regarding the ruling Liberals’ actions on climate policy and fossil fuel development. In an episode that aired Sunday, Minhaj probed the Trudeau government’s decision to nationalise the Trans Mountain Pipeline from oil company Kinder Morgan last year and approve an expansion this summer, while simultaneously promoting Canada’s climate progress despite being far off track from its Paris Agreement GHG targets. While the Liberals have defended the decision for the project’s economic growth potential and have pledged to funnel pipeline proceeds into low-carbon initiatives, Minhaj questioned that logic. “What you’re describing sounds like trying to whiten your teeth by drinking wine at every meal,” Minhaj said.
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