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An erosion of Canadian voter support for the incumbent Liberals and poll-leading opposition Conservatives may open a range of minority government possibilities ahead of the national election on Monday, the outcome of which will have a significant impact on the country’s federal and provincial climate policies and environmental markets.
CARBON FORWARD 2019
The British government would aim to complete all EUA free allocations and auctions for 2019 before next year’s compliance deadline should a Brexit deal be reached and the country remains in the ETS, a senior UK official said Thursday.
Trading in EU carbon has become “very tricky” this year compared to last due to Brexit and a reversal in short-term fundamentals, according to one of the market’s most prominent long-term bulls, who predicts prices will top €100 early next decade.
The EU ETS is suffering from a lack of information that is making it difficult to assess participant behaviour, though the market’s fundamentals make it “ripe” for new investors, a veteran analyst has said.
Europe’s carbon market is designed to easily accommodate an increase in climate ambition should lawmakers agree to scale up the bloc’s emission goals, a European Commission official said on Thursday.
Russia has dropped plans to set up an ETS for major emitters, local media reported Thursday, electing instead to merely measure their carbon output.
EU Market: Brexit deal sends EUAs to new 3-wk high, but prices retreat as views mixed over next move
European carbon prices hit a fresh three-week high on Thursday on news that a Brexit deal had been clinched between the UK and EU.
Australia’s Clean Energy Regulator issued a record 13.66 million carbon credits in FY2018-19, according to its annual report released on Thursday, but data also showed that new project development fell by more than 50% while the government’s Emissions Reduction Fund cancelled contracts for more offsets than it signed.
California Carbon Allowances (CCAs) reversed their recent downward trend as option activity and spread trading spurred higher prices this week, while RGGI allowance (RGAs) declined on thin volume on the secondary market.
New York City is currently undertaking an inter-agency process of determining offset rules in accordance with the Big Apple’s recent climate bill and separate net zero emissions goal, though it remains to be seen how those credits might square with the state legislature’s carbon neutrality bill passed earlier this year.
As part of her “European Green Deal”, incoming EU Commission President Ursula von der Leyen has promised to introduce a carbon border tax to “ensure that European companies can compete on a level playing field”. This is a new wind coming from the executive branch of the European Union and it remains uncertain how von der Leyen plans to turn the idea of a carbon border tax into practice.
BITE-SIZED UPDATES FROM AROUND THE WORLD
Second to one – This year is shaping up to be the second-warmest on record for most temperature datasets, behind only the super-El Nino year of 2016, according to Carbon Brief’s latest quarterly “state of the climate” report. The findings also show that the summer of 2019 saw a sea ice extent minimum in the Arctic that tied for the second lowest since satellite records began in the late 1970s.
Doing it together – German Chancellor Angela Merkel and French President Emmanuel Macron emphasised unity on European climate action at a joint cabinet meeting in Toulouse on Wednesday, calling for the rapid adoption of a European Green Deal. In a joint declaration, the two leaders said they wanted the EU to achieve carbon neutrality by 2050 and supported the introduction of a minimum CO2 price in the EU ETS. They also said they wished to explore ways to introduce a WTO-compliant EU border tax, which would be levied on products imported from countries with less environmentally friendly standards. The French and German leaders said they wanted to strengthen the role of the EIB in climate finance, making it “the EU climate bank.” In the German parliament, Merkel said the need to consider the specific situations of European countries, such as Poland and Sweden, when it came to carbon neutrality and offer support in their structural transitions.
BoJo’s climate mojo – British Prime Minister Boris Johnson is to chair a new cabinet committee on climate change to drive action to cut emissions across the government. It follows long-standing criticism that some departments – especially transport – have failed to play their part. Details on the climate committee membership and how often it will sit are not yet available. (BBC)
At least you tried – US Senate Democrats on Thursday fell short in their attempt to undo the Trump administration’s rollback of the Obama-era Clean Power Plan through the weaker Affordable Clean Energy (ACE) rule, Bloomberg Environment reports. The vote failed 41-53, with Maine Senator Susan Collins the only Republican to side with most Democrats in attempting to scrap ACE. On the other hand, three Democrats – Alabama’s Doug Jones, Arizona’s Krysten Sinema, and West Virginia’s Joe Manchin – voted against the effort. Even if the vote had passed, it would have faced an almost-certain veto from President Trump. Meanwhile, the Senate Democrats’ Special Committee on the Climate Crisis met on Thursday with senior officials from the central banks of the Netherlands, France, Germany and Norway to hear about their work on climate risk, Politico reports. The meeting was not open to the public.
Lobby launch – A US Republican-backed group advocating for a nationwide $40/t carbon fee and dividend proposal has officially registered to lobby on its own behalf. Americans for Carbon Dividends, which is the lobbying and advocacy offshoot of the Climate Leadership Council – a coalition that includes several large oil companies and green groups – had formerly used outside firm Squire Patton Boggs since launching last year. The self-registration in addition to retaining Squire Patton Boggs signals the group’s increasing activity on Capitol Hill, a spokesman told Axios.
Failed experiment – The Sri Lankan government has decided to abolish the national carbon tax on motor vehicles. The legislation will be presented to parliament next Wednesday, Finance Minister Mangala Samaraweera said, acting on a promise made by presidential candidate Sajith Premadasa during the current election campaign. Voters go to the polls on Nov. 16. The government introduced the tax in Mar. 2019, charging it based on three categories – petrol-fuelled and hybrid vehicles less than five years old, between five and 10 years old, and more than 10 years old. Electric cars were made exempt. But the levy increased the cost of some models by some 20%, making it unpopular with consumers.
And finally… Texas two-step, in Alberta – Lone Star State-headquartered oil major ExxonMobil used two sets of books and misled investors by downplaying costs of carbon emissions, according to the New York attorney general’s civil case against the company that will go to trial next week. Exxon is accused of disclosing one set of these projected carbon costs to investors while planners used an entirely different set internally for evaluating investments. For years, the oil giant estimated it would have to pay a carbon price of as much as C$80/tonne in Canada by 2040. However, in 2015 the company directed its planners evaluating the Kearl tar sands project in Alberta to instead to use the province’s existing CO2 levy, which at the time was C$15/tonne under the Specified Gas Emitters Regulation. Additionally, that large emitter programme only applied a fee to a portion of the company’s CO2 output based on facility-specific benchmarks. The result, New York prosecutors say, is that Exxon understated the future costs at its tar sands operations by C$30 billion, compared to if the company had applied its public proxy cost. At Kearl alone, the complaint says, the gap was C$14 billion. (Inside Climate News)
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