Climate 411

North Carolina Carbon Plan: Why Duke’s gas bet is a risk to ratepayers and how offshore wind can carry the load

On May 28, the Environmental Defense Fund, along with several other parties, filed expert testimony with the North Carolina Utilities Commission (NCUC) in North Carolina’s Carbon Plan proceeding. The outcome of these regulatory proceedings, which include hearings over the summer and a Commission order by end of year, will shape over $100 billion in long-term investments proposed by Duke Energy, and ultimately largely paid for by North Carolina electricity customers. This is a huge decision point for the state’s energy future, as I described in a recent op-ed published by NC Newsline.

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Posted in Cities and states, Economics, Energy, Greenhouse Gas Emissions, Policy / Leave a comment

Despite threat of repeal, Washington state’s carbon market continues to raise urgently-needed revenue for communities in The Evergreen State

Photo of Mount Rainer

Results were released today for Washington’s second quarterly auction of 2024, administered last Wednesday by the Department of Ecology (Ecology). During the auction, participating entities submitted their bids for allowances. Under the Climate Commitment Act, Washington’s major emitters are required to hold one allowance for every ton of greenhouse gas that they emit, with the total number of allowances available declining each year. This requires polluters in Washington to reduce their emissions in line with the state’s climate targets. By distributing allowances via auction, the state can both regulate emissions and raise important revenue to invest in frontline communities, accelerate clean job creation, and more.

Here are the results, released today:

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Posted in Carbon Markets, Cities and states, Greenhouse Gas Emissions, News, Policy / Leave a comment

Building a better grid: The latest steps to deliver reliable, affordable and clean power

Many of us don’t realize how much of our livelihoods depend on a reliable electricity grid, until we lose power in a blackout or outage.

For many communities across the country, that is becoming a more common occurrence as we experience more frequent and severe storms and heat waves worsened by climate change. Just last week, nearly 200,000 people across several midwestern and southern states lost power after a blitz of tornadoes and thunderstorms.

This extreme weather threat is amplified by outdated grid infrastructure and increasing electricity demand.

One essential solution to meeting these challenges – and driving meaningful progress toward a clean energy future – is building a more modern, reliable and clean grid. This is exactly what the Biden administration and the Federal Energy Regulatory Commission (FERC) are doing with a suite of grid-strengthening actions over the last month.

Here’s what you should know about these latest actions and why they matter:

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Posted in Energy / Comments are closed

Stronger Standards, Better Monitoring Will Protect Communities from Toxic Pollution

(This post was co-authored by EDF analyst Jolie Villegas)

The Environmental Protection Agency’s recent updates of the Mercury and Air Toxics Standards include several steps that provide substantial public health benefits by reducing toxic air pollution from coal plants.

In our last blog post we wrote about one of those steps – closing the “lignite loophole” that allows power plants that burn lignite coal to avoid commonsense pollution limits that protect people’s health and safety.

There’s a second step that EPA took in updating the Mercury and Air Toxics Standards – requiring coal-fired power plants to use a Continuous Emissions Monitoring System so that people and communities are protected from dangerous pollution 365 days a year.

And as a third step to protect communities from harmful exposures, the updated Mercury and Air Toxics Standards meaningfully strengthen limits for hazardous metal emissions.

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Posted in Health, Just Transition, News, Policy / Comments are closed

Bonn 2024: Laying the Groundwork for Global Climate Action from Baku to Belém

Authored by Juan Pablo Hoffmaister, Associate Vice President for Global Engagement at Environmental Defense Fund 

The international climate community is convening in Bonn, Germany, for the 60th sessions of the Subsidiary Bodies of the UNFCCC this June—and they will set the tone for the next year of global climate engagement. The sessions in Bonn are a vital mid-year checkpoint and a precursor to COP29 in Baku, Azerbaijan. 

Discussions in Bonn, hosted at the UNFCCC headquarters, will prepare for the critical negotiations that will unfold in Baku and subsequently in Belém, Brazil, at COP30. 

Although this year’s COP29 is projected to be smaller in scale than past years due to spatial and financial constraints, it will be no less consequential: Participating countries must come together to finalize a critical agreement: the New Collective Quantified Goal (NCQG) on climate finance. This new finance goal is anticipated to significantly shape how countries can realistically implement their new Nationally Determined Contributions (NDCs)–each country’s national climate commitments—due in 2025.  

Given the major milestones lined up for COP29 and COP30, the June sessions in Bonn need to set the tone for heightened ambition and climate progress, especially on the complexities of climate finance, policy coherence, and equity. 

Here are our top themes to watch during Bonn, and how EDF is working to support a positive outcome: 

Setting a New Climate Finance Goal

The NCQG will be essential for enabling effective climate action globally, with a strong focus on supporting the needs and priorities of developing countries. As negotiations unfold, the objective is clear: to promote ambitious and achievable financial commitments that will help scale climate action and provide a clear trajectory toward the 2025 NDCs and beyond. 

By establishing this new finance goal, the international community seeks to ensure that every country has the necessary support to implement effective climate solutions, thereby fostering a more equitable global approach to climate change mitigation and adaptation. 

  • EDF is actively participating in the dialogues around the new goal, and submitted suggestions calling for ambitious, quality financial commitments and a transparent process to support effective implementation of the goal. 

Ensuring Equity in Climate Action

A significant focus will also be on the Just Transition Work Programme, which aims to embed the principles of a just transition into global climate policy frameworks. It’s about ensuring that the shift towards a low-carbon future is equitable, supporting sustainable development that benefits all sectors of society without leaving anyone behind. 

  • EDF recently published our Just Transition and Safeguards Framework, which offers a roadmap for countries and companies alike to successfully navigate the complexities of transitioning to clean energy while ensuring fairness and equity at every step of the way. We’ll be working to socialize the EDF framework’s guidance as countries engaged in the Just Transition Work Programme continue their deliberations. 

Accelerating Action on Food & Agriculture

Food was on the table at COP28, as the conference opened with a declaration on sustainable agriculture, resilient food systems, and climate action endorsed by 159 countries. Negotiations will resume with renewed momentum in Bonn. The goal is to accelerate action on climate resilient practices that ensure food security and address environmental impacts effectively by 2025, and to review and enhance country commitments, including through enhancing NDCs, developing specific investment pipelines, and unlocking various forms of finance. 

  • EDF is engaging with stakeholders and partners aiming to accelerate both climate mitigation and adaptation in the global food and agriculture sector through finance. This includes supporting farmers’ livelihoods, climate-resilient food systems, and environmental protection. 

Making Progress on Article 6: Advancing Cooperative Implementation

While there was a lack of progress on Article 6 forms and reporting procedures at COP28, implementation of the mechanism is proceeding at the national level. This year, we’ve already seen the first notifications of transactions under article 6.2 continue to deliver high-integrity climate action. Since COP28, countries aiming to work together on climate action through carbon markets have signed 13 new bilateral agreements. 

Efforts to operationalize Article 6.4 will focus on key decisions left over from COP28, particularly on the development of methodological guidance and on the crediting of removals under this mechanism. The Article 6.4 Supervisory Board has made progress since COP28 on other significant issues, such as the consideration of sustainable development benefits and the establishment of a grievances and appeals procedure, heralding potential renewed willingness to reach solutions from different negotiating partners. 

Establishing robust international market and non-market cooperative approaches will be essential for funding and facilitating global climate action, aiming to overcome previous impasses and enhance economic sustainability.  

  • While EDF will be monitoring Article 6 developments closely, our active engagement will be shaped by the progress and direction of these discussions. We aim to ensure Article 6 can serve as a high-integrity tool to deliver an efficient flow of financial capital from the Global North to the Global South to meet their Paris Agreement goals. Read more about our Article 6 perspective here.  

Treating Our Oceans as Critical Allies in Climate Mitigation

Discussions in Bonn will also cover marine biodiversity conservation, coastal resilience, and innovative financing for ocean-based climate solutions, recognizing the integral role of oceans in the broader climate regulation framework.  

  • EDF plans to participate in the oceans and climate change process, building on our involvement in the climate action outcomes related to oceans at COP28. We worked in partnership with the UN Food and Agriculture Organization (FAO) to announce the Aquatic Food Breakthrough for 2030: a goal to provide at least US$ 4 billion per year to support resilient aquatic food systems that will contribute to healthy, regenerative ecosystems and sustain the food and nutrition security for three billion people.  

Strengthening Partnerships with all Actors

Participating countries are not the only ones responsible for climate action: progress depends on cooperation with all non-state actors. That is the ethos of the Marrakech Partnership for Global Climate Action (MP-GCA), a platform for coordinated climate action between governments and non-state actors like companies, communities, Indigenous Peoples, faith communities, and more. In the MP-GCA, High-Level Champions (HLCs) lead efforts to turn ideas into action and foster collaboration on projects that can seriously reduce greenhouse gas emissions and make the world more resilient to climate change impacts. 

  • At EDF, we share this “everyone in” mentality: we believe in activating everyone on climate, from businesses to communities to governments. In Bonn, EDF will focus on our work with the High-Level Champions (HLCs) and the sectoral leads of the Marrakech Partnership for Global Climate Action (MP-GCA). By collaborating with other non-state actors and the private sector, EDF aims to drive collective progress and amplify our impact on global climate initiatives. 

The Road to COP30: Making it to Belem, Brazil

As we move from these Bonn climate talks to COP29 in Baku and onward to COP30 in Brazil, the discussions set the stage for crucial global climate action. These negotiations, enriched by Brazil’s focus on nature and forests, are pivotal as they coincide with significant global environmental conventions, including the UN Convention on Biological Diversity (CBD), with its own COP happening in October in Colombia. Each conference is an opportunity to forge policies that harness natural ecosystems for climate mitigation and adaptation. 

  • During Bonn, EDF will be engaged in discussions on forest conservation efforts through the Jurisdictional REDD+ Technical Assistance Partnership (JTAP), an initiative to support jurisdictions and local partners to participate in high-integrity voluntary carbon markets to catalyze tropical forest conservation and finance at scale.  

A successful outcome at COP depends on incremental collective progress throughout the year. Bonn is a critical moment to connect the dots between the upcoming moments for global climate engagement. Whether discussions focus on biodiversity, desertification, finance or just transition, weaving together the common threads and finding the synergies between them is key to taking actions that solve for multiple problems and benefit climate, communities, and ecosystems all at once.  

Posted in Climate Finance, News, Policy, United Nations / Tagged , , , | Comments are closed

California’s second carbon market auction of the year raises revenue at critical time for climate funds

This blog was co-authored by Sara Olsen, Project Manager, California Political Affairs

Results of the latest Western Climate Initiative auction were released today, showing continued demand for allowances and confidence in the long-term stability of this landmark program. This auction is expected to generate roughly $1.1 billion for the Greenhouse Gas Reduction Fund (GGRF), which is dedicated to funding initiatives aimed at reducing greenhouse gas emissions and building climate resilience.

A new report from the California Air Resources Board (CARB) finds that, in the past 10 years, climate investments like GGRF have reduced California’s emissions by 109.2 million metric tons — the equivalent to taking 80% of the state’s gas cars off the road — by investing in projects like adding zero-emissions transport options, building affordable housing near job centers and more. As California heads into another summer with an increased risk for wildfire and more impacts of climate change are becoming increasingly severe and evident, the importance of this fund is clearer than ever.

May auction results

  • All 51,589,488 current vintage allowances offered for sale were purchased, resulting in the 15th consecutive sold out auction. This is 0.72% or 373,000 more allowances than were offered at the previous auction.
  • The current auction settled at a price of $37.02, $12.98 above the $24.04 price floor and $4.74 below the February 2024 settlement price of $41.76.
  • All of the 7,211,000 future vintage allowances offered for sale were purchased — these allowances can be used for compliance beginning in 2027. This is the same number of future vintage allowances that were offered at the previous advance auction.
  • Future vintage allowances settled at $38.35, $14.31 above the $24.04 floor price and $2.65 below the February settlement price of $41.00.

What factors may be at play with these results?

A number of factors could be at play with today’s results which saw a lower settlement price than California’s most recent auction. The first is general market variability; potential program changes, such as those being considered by CARB, can drive uncertainty among market participants that results in price fluctuations. While prices in the WCI auctions tend to tick upwards, it’s not uncommon for prices to drop once in a while. This happened most recently in the August and November auctions in 2022, where prices dropped from the May 2022 price of $30.85 down to $27, and then down to $26.80 before starting to trend upward again. Last auction’s settlement price of $41.76 was a record price by $3.03, so today’s price puts the WCI market more on trend with where prices were in November and August of last year. Despite slightly lower prices this quarter, there’s still strong demand overall; the auction was completely sold out. The market continues to be stable, and some price fluctuations are to be expected, especially during periods of program adjustment.

Where is the revenue getting invested?

Over the past ten years, California delivered $11 billion from the Greenhouse Gas Reduction Fund (GGRF) to more than half a million projects that cut pollution and mitigate the impacts of climate change. These investments yield meaningful environmental and community benefits, including a 109 million metric ton reduction of greenhouse gas emissions, 1,248 new or expanded transit projects, 29,800 new jobs, and 12,606 affordable housing projects under contract.

The $1.1 billion in revenue for GGRF from this auction comes at a critical moment, as California grapples with a $27.6 billion budget deficit. As the Governor and policymakers explore budget strategies, climate initiatives face the looming threat of funding cuts. In January, Governor Newsom proposed more than $3.1 billion in cuts and more than $5 billion in delays for climate funding. In the May Revision of his 2023-24 Budget Proposal, Governor Newsom proposed over $3 billion in additional cuts to significant climate investments. The proposal also reallocated funding for various climate programs to GGRF, relying on this source to alleviate the effects of the budget deficit.

Cap-and-trade, through emissions reductions and revenue generation, will be pivotal in addressing California’s current budget and climate challenges. The State’s reliance on the Greenhouse Gas Reduction Fund as a lifeline for essential climate initiatives only further underscores the need for these funds to be allocated strategically and exclusively towards climate and environmental justice priorities.

Posted in California, Carbon Markets, Cities and states, Economics, Greenhouse Gas Emissions, Policy / Comments are closed