CP Daily: Monday November 18, 2019

Published 00:53 on November 19, 2019  /  Last updated at 12:07 on November 19, 2019  / Carbon Pulse /  Newsletters

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

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ANALYSIS: WCI traders expect Q4 auction settlement above $17.00

Market participants are anticipating the November WCI auction will settle underneath the secondary market price and Q3 sale result, as compliance entities and speculators continue to seek out discounts below stagnant California Carbon Allowance (CCA) values.

California’s ARB probing 36k livestock offsets for regulatory violations

California regulator ARB is probing a Michigan-based livestock offset project for failing to meet regulatory compliance during its WCI reporting periods, with more than 36,100 credits now under investigation, the agency announced Monday.


More ambitious Alberta climate plan would yield little economic harm, despite govt claims -economist

Implementing the previous Alberta NDP government’s carbon pricing regime and climate plan would not significantly harm the Canadian province’s economy, despite the current conservative-led administration claiming otherwise, an economist said in response to a report released Friday.

Vermont governor may oppose TCI transport carbon market design

Vermont Governor Phil Scott (R) is holding out on committing to the design of a cap-and-invest programme for the fuel sector, despite his state’s involvement in the Transportation and Climate Initiative (TCI) design process for a regional ETS.

Speculators increasing V19 California carbon holdings, data shows

New participants are building length in California Carbon Allowances (CCAs) ahead of this week’s WCI auction as prices have stabilised above $17.00, according to US Commodity Futures Trading Commission (CFTC) data.


Swiss carbon prices soar 150% in latest auction, as EU link draws closer

Swiss carbon prices have soared by 150% in the country’s latest allowance auction, with values finally starting to converge with EU prices as the two markets near linkage.

EU Market: EUAs sink to six-week low below technical support

EUAs hit a six-week low on Monday, extending Friday’s bottom trade as weak energy markets helped push carbon below a key support level despite a stronger auction.

Decarbonisation of EU building stock needs Green Deal, not ETS -trade group

The EU’s buildings sector will be more quickly and effectively decarbonised under a European Green Deal than through inclusion in the bloc’s ETS, according to a trade group.


Australia weighs issuing carbon offsets before reductions take place

In a clear break with standard practice, Australia’s environment department has proposed rule changes to its carbon offset programme that would allow for ACCUs to be issued and distributed to owners of some vegetation-based projects before the emission reductions have taken place.

China’s Fujian issues 658,000 forest carbon credits

China’s Fujian province has issued 658,000 forest carbon credits to state-owned forest farms, a move aimed at bringing in revenue for the local forestry industry as the credits are sold to participants in the provincial emissions trading scheme.


Switzerland opens second call for ITMO proposals

Switzerland’s carbon credit procurement agency Klik has launched a second call for proposals from developers hoping to sell emission units to the country under the Paris Agreement’s Article 6.


ANALYSIS: Experts divided on CORSIA aviation offset supply estimates, with CDM renewal risk in focus

Experts are differing greatly on the potential supply of eligible carbon credits that could be available under ICAO’s global aviation offset scheme, and specifically on the amount of available CDM units, which are poised to play a key role.


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Scenario shuffling – Some 65 investors, scientists, and campaigners wrote a joint letter to IEA chief Fatih Birol urging the organisation’s influential annual energy outlook to produce a “fully transparent” scenario showing how the world could meet the 1.5C Paris Agreement temperature limit without banking on negative emission technologies. They said such an approach could help unlock faster investment in renewables and better identify possible climate risks to the value of fossil fuel assets. Birol and other IEA officials say the criticism misunderstands how its scenarios work.

Chop off – Deforestation in Brazil’s Amazon rainforest rose to its highest since 2008 this year, data from the government’s INPE space research agency showed on Monday, confirming a sharp increase under the leadership of right-wing President Jair Bolsonaro. Figures showed deforestation soaring 29.5% to 9,762 square kilometres for the 12 months through July 2019, sparking an uncharacteristic admission by the government that something needed to be done to stem the tide. (Reuters)

Great, but so much more to do – This year the UK became the first major economy to set a legally binding commitment to reach net zero emissions by 2050, but to achieve this it will require an annual reduction in carbon intensity of 9.7%, according to PwC’s latest Low Carbon Economy Index (LCEI). At 3.7%, the UK still leads the G20 in having the most rapid decarbonisation rate since 2000. However, the rate of progress has slowed and the gap to meet climate targets is widening. The majority of the UK’s recent emissions reductions have come from the phase-out of coal, but this trend of decarbonisation is neither sustainable or sufficient as the cuts can only be banked once, PwC said. Between 2012 and 2016, peak coal phaseout years, the UK achieved an annual average rate of decarbonisation of 6.9%. It was only in 2014 that the UK achieved the 9.7% required decarbonisation rate for net zero. Achieving net zero will require action and a transition of every sector of the UK economy, including the electrification of sectors such as transport and heating, the scaling up of renewables, and increased investment in clean energy sources, advanced storage solutions, and smart grids. Negative emissions technologies such as CCS will also need to be scaled, and improved agriculture and land use practices will be critical.

Bring your bipartisanship – Bipartisan attempts to work on an Oregon cap-and-trade bill may occur this week as the state’s legislative days take place in Salem, according to State Senator Bill Hansell (R). “Leaders from both parties, at least in the Senate, are working together with some type of proposal that could well be introduced in the short session,” Hansell told local outlet My Eastern Oregon, referencing next year’s five-week legislative term that begins in February. Sources previously told Carbon Pulse that lawmakers were debating a five-year delay for the fuel sector from ETS coverage as one option, though it was uncertain how much support that measure had gained.

Questioning in Quebec – The Quebec solidaire (QS) party is questioning the province’s cap-and-trade system, three weeks before Premier Francois Legault is scheduled to travel to California to defend it. Previously, all parties of the Canadian province’s National Assembly had favoured the WCI-linked carbon market, but QS co-spokesperson Manon Masse said Sunday that the programme was letting large polluters “make money”. Legault will meet will travel to California over Dec. 8-11 and discuss the US Department of Justice’s lawsuit of WCI and California’s ETS linkage with Governor Gavin Newsom.  Legault’s party is also set to unveil its own provincial climate change plan early next year. (Montreal Gazette)

Challenging in California – California and 22 other states filed suit against the Trump administration Friday in the latest attack in the war over the jurisdiction’s ability to set its own auto emissions standards. The lawsuit is similar to one filed by the group of states in September, after the administration officially announced it would move to revoke the waiver that allows California to set stricter standards than the federal government. California also said Friday that the state would stop buying cars from automakers that don’t follow its stricter auto emissions standards, dealing a direct blow to auto companies like GM, Fiat Chrysler, and Toyota, which have sided with the Trump administration in the clash over emissions standards. The state spent $27 million buying vehicles from Chevrolet, which is owned by GM, in 2018 alone. (Climate Nexus)

And finally… It’s the economy environment, stupid – British voters are more concerned about the environment ahead of the Dec. 12 general election than at any time in the past, according to a new poll, ranking it above the economy, education, and immigration. The findings will put pressure on political parties to toughen their policies on pollution and climate change as the issue ranks only behind Brexit, health, and crime on the public’s list of priorities, according to the Ipsos Mori survey. The environment is listed as being more important than at any time since 1990. Pollsters said the consistency with which it is mentioned by voters means it now matters more than ever before. When asked to list what they think are the biggest issues facing Britain, more than one in five voters (21%) mention the environment and pollution unprompted – up from just 2% in 2012. The figure rises to 29% among 18- to 24-year-olds, although more than one in four of 45- to 54-year-olds also raise it as an issue. (The Independent)

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