Tag Archives: green
RGGI Carbon Price Rises 15%
The 20 th carbon emissions allowance auction conducted by the Regional Greenhouse Gas Initiative (RGGI) for 9 participating northeastern and mid-Atlantic states was sold out of all 38.7 million allowances at a clearing price of $3.21 per short ton, a 15 percent mark-up from the last auction in March. The RGGI auction was held last Wednesday, and demand continues to be strong from auction to auction, as it has in other regions like California. Bids for the CO 2 allowances ranged from $1.98 to $5.55 per allowance. Winning bidders pay the price of the lowest winning bid, but allowance permits are allotted to the highest bidders first and then in descending order, until allowances are sold out. The auction generated $124.4 million for reinvestment by the RGGI states in a variety of consumer benefit initiatives, including energy efficiency, renewable energy, direct bill assistance, greenhouse gas abatement and climate change adaptation programs. The RGGI is a mandatory cap-and-trade system, established in 2009, covering the power sector in Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont. In February, RGGI states agreed to program reforms that will lower the cap by 45 percent, starting in 2014. Emissions had fallen from 2005 due to lower natural gas prices and the recession. The carbon market had been oversupplied with allowances by about 30 percent, in proportion to emissions from when it began, keeping allowance prices below $2/t for most years, according to energy and environmental analysis firm Thomson Reuters Point Carbon. The high clearing price and strong demand show that market participants are confident in the program reforms and are already planning for a carbon-constrained future, according to analysts at the firm. Last month, California raised more than $280 million selling greenhouse gas emissions permits in its third auction, with businesses paying a record $14 per metric ton for the right to release carbon this year. Continue reading
Are MEPs Ready To Deliver Carbon Backloading Compromise?
Eight MEPs from ALDE group in European Parliament also call for urgent structural reform to the Emissions Trading System By Jessica Shankleman 17 Jun 2013 MEPs in the European Parliament will this week decide whether to water down the plan to delay the auctioning of 900 million carbon allowances, in pursuit of a compromise that could green light the controversial attempt to force up the price of carbon. Hopes are mounting that a new package of rules governing how the backloading programme is enacted could help secure sufficient support in the European Parliament for a vote on the plan to pass at the second time of asking. However, a group of liberal MEPs have warned the Commission that time is running out to find a permanent fix for the the bloc’s faltering emissions trading scheme (ETS), which has seen prices crash to an all time low because of a huge surplus of carbon allowances. Nearly 70 MEPs in the Parliament’s Environment Committee will on Wednesday vote to decide exactly what backloading proposals should be put to the plenary next month. The largest parties, the European People’s Party (EPP), Socialists and Democrats and the Alliance of Liberals and Democrats (ALDE) have reportedly already agreed a compromise proposal that would include assurances that the witholding of allowances would not be repeated, and that backloading would not lead to the permanent withdrawal of delayed carbon allowances. They will also vote on whether to propose a fund that would take money made from the auctioning of allowances to help energy intensive sectors invest in low carbon technology. The compromises are designed to secure fresh support for the backloading proposals, after a previous bid to push through the plan in April narrowly failed when it was defeated in by 334-315 votes, forcing the plan to return to the committee stage. Chris Davies, British Liberal Democrat MEP and ALDE leader in the Environment Committee, said he was optimistic the backloading would be approved at the second time of asking. “People were very fearful last time round that there would be a huge increase in the carbon price,” he told BusinessGreen . “Even BusinessEurope which opposed backloading last time accept now that any price increase will be unlikely to make a huge difference to competiveness of European industry.” He said the proposed fund for energy intensive industries could be established before 2020 to ensure that low carbon investments can be made swiftly, despite the risk that spending the money before the end of the 2013-2020 Phase III of the ETS could undermine the short-term purpose of backloading by further reducing demand for carbon allowances. But Davies acknowleged that a successful vote this time around could also depend on the Green Party agreeing to the compromises. The Greens have said they could vote against the new proposals, on the grounds that the concessions would stop backloading pushing up the carbon price in any meaningful way. Green MEP Bas Eikhout said the group was unlikely to back the compromise at the preliminary vote by the Environment Committee. “I thought fixing ets was the goal. Now it seems fixing backloading is getting the goal. Less ambition by the day,” he wrote on Twitter last week. But beyond the quick fix that backloading may or may not provide to the carbon price, ALDE MEPs are becoming increasingly concerned that time is running out to deliver more meaningful reforms to the ETS. ALDE MEPs from a range of committees last week wrote to Climate Commissioner Connie Hedegaard, warning that a failure to reform the EU ETS with both long and short term measures would push up the price of tackling climate change for member states. The letter, seen by BusinessGreen , and signed by eight MEPs, including Davies and Fiona Hall, warned that EU’s carbon market cannot be allowed to fail at a time when other countries and regions are looking to set up their own carbon trading schemes. “If the ETS were allowed to fail, EU Member States would still have to deliver on their climate change commitments and would thus be forced to put new mechanisms in place,” adds the letter, which is also signed by Denmark’s Jens Rohde, Germany’s Jurgen Creutzmann, Sweden’s Kent Johansson , France’s Corinne Lepage, Bulgaria’s Vladko Todorov Panayotov, and Romania’s Adina Ioana Valean. “That is why, in parallel with the rapid resolution of the backloading proposal, it is essential to move forward now with structural reform of the ETS and to restore the system’s credibility.” The Commission is due to present structural reform proposals for the ETS this Autumn, which centre on permanently retiring two billion carbon allowances or lowering the emissions cap for companies covered by the ETS in order to increase demand in the market. But the MEPs are concerned that a changeover in the Commission in 2014 will delay progress on the new structural reforms being decided on and implemented until 2015. Davies told BusinessGreen that the letter was designed to push the Commission to start debating long term reforms, despite the run up to next year’s European elections. “In the parliament there seems to be general support for the idea of structural reforms,” he said. But my concern is that when the proposals are put forward, people will find lots of opportunities to disagree with them. We could end up being in the position of a new commission coming in October next year, and it could be 2015 before anything is brought forward and we think that delay [to the wider structural reforms] would be inappropriate.” But alongside these fears, the letter to Hedegaard also suggests that the ALDE group may be closer to building a consensus on the backloading proposals. Panayotov, Valean and Creutzmann all voted against backloading in April, but their signatures on the letter suggest they may now be prepared to support a compromise agreement. Davies, who supported the first backloading vote, said he hoped there would be greater support from ALDE this time round, even though there would still be a split. “It’s not the Environment Committee members we need to win over, it’s the rest of the parliament that voted against backloading last time,” he added. Environment Commitee MEPs will also this week vote on proposals to tighten the EU’s regulation on flourinated gases such as those used in fridges, which have a powerful greenhouse gas effect, and plans to boost the economy through green sustainable industries and ecodesign requirements for water heaters and hot water storage tanks. But despite all these votes all eyes will be on the latest twist in the long-running backloading saga, as both opponents and supporters of the plan wait to see if MEPs can revive the carbon market after all. Continue reading
Govts Inch Towards Framework For Global CO2 Market
Source: Reuters – Thu, 13 Jun 2013 04:44 PM Author: Michael Szabo and Andrew Allan Environmental activists stage an open-air carbon auction in front of the European Parliament in Brussels, April 9, 2013. REUTERS/Francois Lenoir BONN, June 13 (Reuters Point Carbon) – Governments may this year launch a global framework to tie together national and regional greenhouse gas reduction efforts, a move that U.N. climate negotiators meeting in Germany this week said could lay the groundwork for a global carbon market. The plan would unite schemes currently being developed in nations including the United States and China onto a single platform, encouraging governments to share ideas with the view of eventually designing a global market to help fight climate change. “The idea is to start to road-test a framework for including various mitigation approaches around the world,” said one senior negotiator who spoke on condition of anonymity. “It would be (open to) anyone that wants to voluntarily connect to this framework, to see if the software and hardware is there to build (something) bigger.” The U.N. climate talks are tasked with launching new market mechanisms that will leverage billions of dollars of private sector finance to help poor countries grow economically in a sustainable way. But the negotiations have made little progress in the area, prompting Poland to first float the idea to other governments earlier this year. The plan could include launching a pilot scheme to examine developing common standards that could, for example, join existing and future carbon markets with mitigation efforts or initiatives to slow deforestation rates in developing countries. “It started as an ambitious idea but it’s been adjusted towards a more general approach following a few rounds of consultations with parties,” said Sven Braden, a negotiator for Lichtenstein. “The hope is it will eventually bring in different mechanisms to try to find common ground and assist in producing proposals for new market-based approaches.” Other member states said the concept remains vague and will need further work at U.N. climate talks in Poland in November, or at a yet unscheduled two-day workshop before or after the meeting. “At the moment, it’s very sketchy as there’s not much detail. It will depend on formal negotiations (in Warsaw) in terms of what happens to it,” said Artur Runge-Metzger, lead EU negotiator at the climate talks. MARKETS Existing international carbon markets under the Kyoto Protocol, such as the Clean Development Mechanism (CDM) and Joint Implementation (JI) are used only by the 35 or so signatories to the 1997 agreement to meet their climate goals. As such, countries that never ratified the treaty (United States), pulled out of it (Japan), or were not forced to cut emissions by it (China) cannot use credits from those markets to meet existing or future climate goals. Any new framework to be launched in Warsaw would be under the U.N. Framework Convention on Climate Change, meaning any of the 190 or so parties could take part. Frustrated with Kyoto’s markets, Japan has designed its own offset scheme and is pushing for international recognition that reductions made under it would count against the nation’s pledge to cut emissions by 2020. One Japanese negotiator said his nation would support the Polish proposal if it allowed Japan to offset emissions via its Joint Crediting Mechanism. “We’re implementing a real scheme, so if this proposal is for a test phase with no specific meaning for 2020 (goals), we wouldn’t have much interest,” said Yuji Mizuno, a director at Japan’s environment ministry. Green groups were opposed to Poland’s idea and called for a review of existing carbon markets before launching new ones, noting the CDM, JI and EU carbon markets are suffering from record low prices due to weak national pledges. “It’s a recipe for disaster,” said Kate Dooley, a campaigner with Third World Network. “Instead of learning from these failures and figuring out what went wrong and (how) fix that, northern governments in particular are pushing forward this discussion of markets … with even looser rules and very broad eligibility criteria.” Continue reading
