CP Daily: Thursday November 21, 2019

Published 23:19 on November 21, 2019  /  Last updated at 23:19 on November 21, 2019  /  Newsletter  /  No Comments

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

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TOP STORY

New Mexico to explore cap-and-trade option as it plans second climate report

New Mexico will examine implementing a cap-and-trade programme as it explores a suite of carbon reduction policies to hit its new GHG reduction target, according to a government report released Thursday.

AMERICAS

California unanimously approves LCFS price cap as part of amendment package

California regulator ARB’s board endorsed the installation of a Low Carbon Fuel Standard (LCFS) price ceiling and a borrowed credits mechanism drawn from utilities’ future electric vehicle budgets as part of a suite of programme amendments on Thursday.

NA Markets: WCI prices increase in anticipation of auction results, RGGI remains flat

California Carbon Allowance (CCA) prices rose to a three-week high on the secondary market this week ahead of the November auction results being published, while RGGI allowance (RGA) prices stagnated on thin volume.

ASIA PACIFIC

Developers deliver over 425,000 ACCUs to Australian government fund

Offset developers under contract with Australia’s Emissions Reduction Fund (ERF) have delivered more than 425,000 credits to the fund over the past two weeks, while the Clean Energy Regulator this week issued just over 100,000 new credits, most of that to one big landfill project.

New Zealand begins consulting on ETS electricity allocation factor

New Zealand on Thursday began consulting on modelling the electricity allocation factor (EAF) for its emissions trading scheme, a process that could lead to industrial emitters receiving fewer free NZUs from 2021.

EMEA

EU Parliament seeks to throw down marker with emergency declaration

The EU Parliament will next week vote on whether to call for the bloc to declare a climate emergency, a ballot that could pressure the incoming European Commission into more short-term ambition.

EU Market: EUAs slide in quiet trade, as market looks for direction

European carbon prices dipped in quiet trade on Thursday, sinking back below €24 on a weaker auction result and softer oil prices.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Needs improvement – The Chinese government has warned that the collapse of normal trading conditions between the US and China is putting at risk global efforts to limit global warming. In a briefing with Australian journalists in Beijing this week, Sun Zhen, deputy director-general of China’s Department of Climate Change, said climate change called for “solid cooperation globally”. “We need multilateralism, and I think at the least countries [need to] trade with each other normally. I think that is the only way to fight climate change,” he said. Mr. Sun said the creation of an international carbon market – which many economists argue is the best way to bring emissions under control – would require complicated trade deals. This, in itself, would be contingent on good commercial ties between the world’s major economies. Sun also repeated the familiar refrain that China remains a developing nation and therefore needs the support of developed nations’ technological expertise as it looks for ways to reduce emissions without compromising its own rapid development. (AFR)

Zeroing in – US Democrats on Thursday unveiled the first major piece of legislation in their effort to reach net-zero carbon emissions by 2050, with a bill that would first push government agencies to reach the goal. Dubbed the 100% Clean Economy Act, the bill directs the EPA to oversee the effort which would be undertaken across the government. It tasks each federal agency with using its authority to reach the net-zero goal, using “a substantial change from business-as-usual policies.” The bill is the first in what may be several pieces of legislation dedicated to realising Democrats’ 2050 carbon reduction goal and market-based approach touted earlier this year. (The Hill)

Plan parity – The new carbon pricing plan that New Brunswick submitted to the Canadian federal government last week is based on systems already approved for use in fellow Atlantic provinces Newfoundland and Labrador and Prince Edward Island, environment minister Jeff Carr said. The Progressive Conservative-led New Brunswick government is currently subject to Ottawa’s ‘backstop’ rising CO2 levy on fossil fuels and output-based pricing system (OBPS), but has now submitted provincially-administered alternatives to both mechanisms. Carr said he is hopeful the federal Liberals will approve New Brunswick’s CO2 levy plan so it may take effect next April. (The Canadian Press)

Flagged at half mast – Although the Alberta Environment and Parks (AEP) department has “flagged” the Canadian province’s engine fuel management and vent gas capture offset protocol, the latter project type as implemented by aggregated conventional oil and gas facilities under the proposed Technology Innovation and Emission Reduction (TIER) regime will still be allowed to proceed, agency officials said on a webinar Thursday. AEP staff explained that with the planned imposition on Alberta of the federal ‘backstop’ CO2 levy starting Jan. 1, 2020, engine fuel management initiatives will receive recognition from their carbon reduction through lessened compliance obligations, meaning they won’t be able to earn offsets for the activity. Meanwhile, any new vent gas capture projects or subprojects will require director approval to proceed while the entire protocol is still flagged.

Input needed – Mexico released a request for expressions of interest on Wednesday for registry design technical inputs for its pilot carbon market. The registry would be adapted from the existing German DEHSt registry system for use in Mexico’s pilot ETS, which is slated to start in Jan. 2020.  The consultancy work will aim to define the functional and technical specifications of the transaction registry, set the best architecture for the Mexico ETS, assess the administration and management needs, and adapt the German DEHSt registry for the requirements of the pilot scheme. The World Bank Group would fiance the work, and the deadline to submit interest is Dec. 11. Mexico published its final regulations for its pilot cap-and-trade programme in October.

Say it ain’t Ali-so – Four years after a massive leak at the Aliso Canyon natural gas storage facility forced thousands of families in the northwest San Fernando Valley to evacuate, Governor Gavin Newsom (D) has called on California’s utilities regulator to look into accelerating the facility’s permanent shutdown. The California Public Utilities Commission should “immediately engage an independent third-party expert to identify viable alternatives to the facility and scenarios that can inform a shorter path to closure,” Newsom wrote in a Monday letter to commission President Marybel Batjer, whom he appointed four months ago. The commission is “fully prepared” to comply with the governor’s request, a commission spokeswoman said. She did not estimate how long it would take. (Los Angeles Times)

Under the sea – Sea level rise is posing a serious threat to the financial solvency of the world’s largest oil company, new research shows. A report released this week from Paris-based investment group Callendar finds that water levels near some of Saudi Aramco’s critical oil refinery infrastracture could rise 5.1 inches by 2030, potentially flooding facilities and damaging equipment. (Climate Nexus)

Explain yourself – Brooklyn residents were treated to an alarming sight of a subway station completely submerged in water on Wednesday as the city tested what it said was infrastructure to protect the subway from rising seas and severe storms. After residents tweeted pictures of the entrance to the Broadway G-train station in Williamsburg completely filled with water and asking the agency to “explain itself”, the official MTA Twitter responded that the station’s entrance was deliberately flooded in order to test a soft gate intended to keep water out of the subway. “We’re doing this because climate change is real,” the MTA Twitter explained. The technology, called a Flex-Gate, was first developed in 2015, and has been installed in multiple stations in lower Manhattan and sites close to the water in Brooklyn and Harlem. (Climate Nexus)

And finally… Cold-won’t-play – British rock band Coldplay will not tour to promote their new album due to the resulting environmental impact, but are working on how to make their gigs more climate friendly.  “All of us, in every industry, have to just work out what the best way of doing our job is … The hardest thing is the flying side of things,” said lead singer Chris Martin. The band will play a show in London with all performance proceeds to go to environmental charity ClientEarth. (Reuters)

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