Climate 411

Climate scare tactics won’t work in California

Some polluters and their allies are rolling out an old and tired playbook in Sacramento. California is ahead of schedule in curbing climate pollution and the economy is booming. Yet alarmism persists. These latest scare tactics are focused on one particular provision of the state’s cap-and-trade program: the level of the “price ceiling”. The price ceiling is an emergency provision that is intended to ensure that prices polluters have to pay per ton of pollution don’t reach above unexpectedly high levels.

The California Air Resources Board (CARB) is currently working to update the cap-and-trade program based on direction the Legislature gave in 2017 to extend it out to 2030. CARB will consider proposed amendments to the program today with passage of the amendments expected after a second consideration in January.

The future of climate action in California is optimism and transformation, not fear and anger

Those who look only at doomsday scenarios are mixing farfetched fearmongering with a dose of outrage by boiling this complex policy decision down to an oversimplified estimate of how much Californians might have to pay in the worst possible scenario in 2030. But fear and anger aren’t what California is about (whatever your political leanings). California is transforming its economy to a cleaner and more prosperous version of itself. After the great recession the economy recovered and grew, but carbon pollution did not.

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Also posted in Carbon Markets / Comments are closed

Four reasons why the California Air Resources Board should endorse the California Tropical Forest Standard

Tropical forests are key to halting global climate change. Destruction of these forests releases 14 to 19 percent of global greenhouse gas emissions each year, more than the emissions from all the world’s cars, trucks, and ships combined. Tropical forests also house an astounding array of plants and animals and provide livelihoods and the backbone of culture for indigenous and forest people around the world.

That’s why California’s proposed Tropical Forest Standard (TFS) is so important. It sets up a framework for carbon markets to credit greenhouse gas emission reductions to incentivize the protection of tropical forests, and sets the highest bar for social and environmental safeguards seen to date.

California is known as a global climate leader, but the most significant step the state can take right now is to endorse the Tropical Forest Standard to help avert climate catastrophe, protect biodiversity, and support the indigenous communities who depend on tropical forests. Watch the video “California and the Amazon are more interconnected than you might think.”

We have a great opportunity to move the needle on tropical deforestation

The TFS would demonstrate what the state views as a legitimate standard by which to gauge any jurisdiction’s forest carbon program, and the emission reduction credits they could achieve for compliance carbon markets. It also lays out key elements that California would require of any program to consider in a potential future linkage.

The TFS sends the critical signal: think big, address emissions at a large scale, and develop partnerships with communities to ensure that the program provides benefits to those who are managing and protecting the forests. Now is an important time to influence other carbon markets as well as jurisdictions that are designing programs to address forest emissions.

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Also posted in Forest protection / Comments are closed

The big news on forests you may have missed during the Global Climate Action Summit

Last week marked another significant achievement in California’s climate leadership, as the state hosted side-by-side global gatherings of the Global Climate Action Summit (GCAS), and the tenth annual meeting of the Governors’ Climate and Forests Task Force, a multi-lateral organization of subnational jurisdictions, which California helped launch in 2008.

But California doesn’t just add to the notches in its environmental leadership by hosting meetings, drawing celebrities, and showcasing pledges.

It’s the work that underlies it all – years, even decades in the making – that gives California the heft to pull off these feats.

One of California’s real accomplishments that was overshadowed – undeservedly – by the summit was the release of the California Tropical Forest Standard, which would lay the groundwork to help protect tropical forests around the world by leveraging the state’s climate program and its global vision.

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Also posted in Forest protection / Read 1 Response

Western Climate Initiative: Stability reigns after Ontario exit as all current and future allowances sell

Golden Gate Bridge Shutterstock

Golden Gate Bridge. © CAN BALCIOGLU / Shutterstock Images.

“Stability” is the word of the day for California and Quebec’s joint August auction. All current and future allowances sold, indicating that despite last month’s abrupt de-linking with Ontario, the market can weather political turbulence and remain strong.

Auction quick takes

  • All 79,421,265 current allowances sold, clearing at USD $15.05, 52 cents above the $14.53 price floor and 40 cents higher than the May auction. The offered allowances include some that were previously unsold, but do not include any allowances from Ontario.
  • All of the 9,401,500 future vintage allowances offered sold at $14.90, 37 cents above the floor price. This is significantly higher than the volume sold at the May auction, due to a number of potential variables including the de-linking with Ontario. It also signals that there is high confidence in the California-Quebec auction past 2020 as these allowances aren’t available for use until 2021.
  • An estimated $798 million was raised for California’s Greenhouse Gas Reduction Fund, which will go to help improve habitat, clean up local air, and invest in frontline communities.
  • Quebec raised approximately $166 million USD to fund provincial climate investments.

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Also posted in Carbon Markets / Comments are closed

Second California-Quebec-Ontario carbon auction sells out, showing market’s strength

 

https://www.pexels.com/photo/golden-gate-bridge-san-francisco-61111/

San Francisco Golden Gate Bridge. Photo by Juan Salamanca.

The second California-Quebec-Ontario joint greenhouse gas allowance auction has sold all current allowances, just like the inaugural tripartite auction in February 2018. There was again strong demand for future allowances, all indicating that despite political and regulatory uncertainty from a key partner, Ontario, the market is on solid ground.

May auction at-a-glance:

  • All 90,587,738 current and previously-unsold allowances sold, clearing at $14.65, which is 12 cents above the $14.53 price floor. This is slightly higher than the February settlement price.
  • 6,057,000 of the 12,427,950 future vintage allowances offered sold at the floor price. This is 2,519,000 million less than sold at the February auction. The decrease is likely due to ongoing uncertainty in Ontario, but as these allowances are not available for use until 2021, it is still an indicator of confidence in the Western Climate Initiative market down the road.
  • An estimated $681,051,270 was raised for California’s Greenhouse Gas Reduction Fund to continue funding climate and equity priorities like urban greening, electric vehicle infrastructure, and affordable housing near public transit.
  • Ontario raised approximately $369,271,300 USD for funding public transit, electric vehicle incentives and energy efficiency upgrades.
  • Quebec raised approximately $151,353,660 USD to support the province’s transition to a green economy.

These results are encouraging because they show that despite ongoing political uncertainty in Ontario, the market is strong and stable. They also show the benefits of linkage to a larger market are real. All three linked jurisdictions have access to more trading partners through the Western Climate Initiative, which creates opportunities for even greater climate ambition. This kind of international cooperation shows that jurisdictions can have an outsized influence on global climate action, particularly at a time when federal leadership from the United States on climate is lacking.

Previously unsold allowances
The role of previously unsold allowances could also be impacting today’s auction results in two ways.

First, this is the third auction where held, or previously unsold allowances were offered for sale. These allowances increase the number of available allowances in the auction, which may contribute to keeping the price near the floor. This demonstrates the importance of that price floor. It is a central feature of the program that ensures stability of the market and the revenues.

Second, back in July 2017 the California Air Resources Board (CARB) adopted the so-called “24 Month Rule.” This establishes that any state-owned allowances that remain unsold for 24 months are either moved to the Allowance Price Containment Reserve (APCR) or retired. This has the effect of tightening the cap either temporarily (if prices were to unexpectedly jump) or permanently. The first significant retirement of allowances could happen after the August auction, so companies could be buying now in anticipation of decreased supply later.

Looking Forward
CARB is in the process of drafting a regulatory update for the cap-and-trade program post-2020. The program has been successful at reducing emissions, as demonstrated by current emissions being below the cap, even as California has grown to the fifth largest economy in the world. This emissions trend provides an important opportunity for California to continue driving increased ambition by setting a tighter post-2020 emissions cap, and continue showing that ambitious climate action can go hand-in-hand with strong economic growth.

Of course the biggest question in the linked carbon market right now is Ontario, which is having elections in June. Although two of the leading parties want to preserve the program, one party wants to end it, but would need to overcome a mountain of legal hurdles. The outcome of the June election could set up either increased confidence in the future of cap-and-trade in Ontario or lingering questions. But the results for both current and future vintage in this auction indicate that confidence is steady, and the California-Quebec-Ontario market remains a world leader in driving climate action.

Also posted in Carbon Markets / Comments are closed

California Models Climate and Air Pollution Action with Balanced Approach

Air pollution visible in downtown Los Angeles | Photo by Diliff, via wikipedia comms

California is once again demonstrating its bold climate leadership. As Washington, D.C. continues to abdicate its role as a climate champion, California is stepping up to extend its landmark cap-and-trade program, address local air pollution, and push California businesses forward toward a cleaner economy.

Environmental Defense Fund strongly supports AB 398 (E. Garcia) and AB 617 (C. Garcia), as well as their authors, Legislative leadership, and the Brown Administration. We commend their vision and initiative on a bill package that addresses the growing threat from climate change and improves public health outcomes by addressing local air pollution in the most impacted neighborhoods.

AB 398: Extending the cap-and-trade program

This bill seeks to extend California’s groundbreaking cap-and-trade program until 2030, with a 2/3 vote. We support this bill for 3 key reasons:

  1. This bill maintains the environmental integrity of California’s cap on emissions. By introducing a price ceiling on allowances, the Air Resources Board with the Legislature’s guidance provides greater certainty on costs. Done poorly, such a ceiling can put environmental outcomes at risk. This proposal addresses that concern by requiring that any excess emissions be made up for by high-integrity emissions reductions outside the cap. This ensures that California does not bust through its emissions cap.
  2. This proposal extends the economic benefits of cap and trade. California has added over a million jobs since cap and trade launched in 2013, and this bill includes important provisions to further develop a green workforce for the 21st century economy. At the same time, cap and trade encourages investments in alternative forms of fuel. This decreases our dependence on fossil fuels, which protects consumers from volatile gas prices.
  3. Extending cap and trade sets a national example for other states to follow. California is on track to meet our 2020 target of reducing emissions to 1990 levels, and the 2030 goal is even more ambitious. We are demonstrating that emissions reduction and a thriving economy can go hand-in-hand. And we will not leave our most vulnerable communities behind.

AB 617: Clean air for California’s most vulnerable communities

The second part of this essential package is an unprecedented air quality bill which seeks to address local air pollution in California’s most impacted neighborhoods. For EDF, these are the 3 main reasons we are committed to supporting this bill:

  1. This measure targets neighborhoods burdened by multiple sources of air pollution. California communities like Richmond, Modesto, or Torrance aren’t polluted by just cars or one refinery – they have many different sources of air pollution. This bill identifies these neighborhoods and focuses monitoring and emissions reduction plans based on burden, rather than source.
  2. Industrial facilities are required to upgrade their technology. There are many facilities that have not been upgraded in decades. This means they emit far more pollution than if current technology were used. This bill requires that industrial sources covered by cap and trade are retrofitted to a standard that reflects technological advances, but are also cost-effective.
  3. This bill increases penalties for big polluters. Many air pollution penalties haven’t been adjusted since the 1970’s. This bill increases these so big polluters no longer have an advantage over facilities that follow the law. This is critically important to hold polluters accountable, especially for the residents who live nearby.

Yes, there is still compromise in politics

California can address climate change without leaving communities behind.

The ability to compromise seems absent from most political arenas these days. The zero-sum strategies of filibusters and government shutdowns are more the norm than a negotiated settlement. However, the California State Senate and Assembly Leadership, along with Governor Brown’s Administration have re-discovered the art of the possible, and isn’t that what politics is all about? They have managed to find the compromise with stakeholders that addresses the twin challenges of climate pollution and air quality.

This package is a path forward that demonstrates to the country and to the world that California can address climate change without leaving communities behind.

There is no silver bullet to accomplish this, despite what we all wish. The environmental community needs businesses to thrive so California’s economy remains strong. Business needs the environmental community to hold them accountable. The Legislature needs all of us to help continue setting the standard on climate policy. We don’t get to take our ball and go home because things aren’t going our way.

As we demonstrate how to address climate change and air pollution, let’s also demonstrate to Washington, D.C. how to compromise. We urge the Legislature to support AB 398 and AB 617.

Also posted in Carbon Markets, Greenhouse Gas Emissions / Comments are closed