Climate 411

California climate program remains solid as transportation emissions fall

By / Bio / Published: November 26, 2019

Bixby Bridge, California. Photo by Dave Lastovskiy on Unsplash

Today’s solid results from the latest Western Climate Initiative cap-and-trade auction demonstrate once again the resilience of the market. Yet this is not the only interesting news out of the California market this quarter as the state released the preliminary 2018 emissions inventory, which showed that transportation emissions fell for the first time since 2012.

First up, auction results:

  • All 67,435,661 current allowances sold, clearing at $17.00, $1.38 above the floor price of $15.62. This is $.16 lower than the August 2019 clearing price of $17.16.
  • All of the 9,038,000 future vintage allowances offered also sold at $16.80, $1.18 above the $15.62 floor price. These allowances are not available for use until 2022.
  • The auction raised approximately $739 million for the Greenhouse Gas Reduction Fund, which California uses for activities that further decrease greenhouse gas emissions, improve local air quality, and support the state’s most vulnerable communities.
  • Quebec raised over approximately $245 million CAD (approximately $185 million USD) to fund their own climate priorities.

These results are generally consistent with the past several auctions, but there are a couple of points worth noting:

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Also posted in Carbon Markets / Comments are closed

As 2020 approaches, the climate action spotlight is on forests

By / Bio / Published: October 21, 2019

Amazon Canopy. Warwick Lister-Kaye / istockphoto.com.

With 2020 fast approaching, countries, companies, and other stakeholders are taking stock of their climate commitments. As they consider ways to meet and enhance climate goals, interest in net zero emissions commitments and carbon removal technologies has grown. But what these discussions reveal is that forests are crucial. Capable of significantly reducing net emissions at a low marginal cost, and in the short-term, forests are an important piece of the climate change mitigation puzzle.

This year, tropical forests have dominated the spotlight. The forest fires raging throughout Brazil, Bolivia, and Indonesia are part of a disturbing trend: despite commitments from governments and companies, deforestation is still on the rise globally. Key forest ecosystems such as the Amazon continue to face the pressures of crop expansion for agricultural production, illegal extractive activities like timber harvesting and mining, relaxed legal enforcement and weakened environmental policies.

As deforestation persists, the planet’s capacity to absorb carbon pollution diminishes and more carbon is being released; tree cover loss in tropical forests accounts for about 16 to 33 percent of global emissions. We should be alarmed. But we should also be hopeful. Here are a few reasons why:

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Also posted in Carbon Markets, Forest protection, International, Paris Agreement, REDD+, United Nations / Comments are closed

California-Quebec August auction clears after emissions below 2020 target for second year running

By / Bio / Published: August 27, 2019
Wind farm in San Gorgonio Pass, California.

Wind farm in San Gorgonio Pass, California. Photo: Pxhere.com

This post was co-authored by Katelyn Roedner Sutter. 

Results of the August 2019 California-Quebec carbon allowance auction were released today, and demonstrate that a strong and steady market is the status quo. These results come just weeks after the Newsom administration’s announcement that in 2017 the state’s total emissions were below the 2020 target for the second year in a row.

Today’s results in brief:

  • All 66,289,515 current allowances sold, clearing at $17.16, $1.54 above the floor price of $15.62. This is $0.29 below the May 2019 clearing price of $17.45. As in the last auction, no previously unsold allowances were offered from California.
  • All of the 9,038,000 future vintage allowances offered also sold at $16.85, $1.23 above the $15.62 floor price. These allowances are not available for use until 2022, demonstrating strong confidence in future market performance.
  • The auction raised approximately $ 729 million USD for the Greenhouse Gas Reduction Fund, which allows California to invest in programs to improve local air quality and reduce emissions from buildings, agriculture and transportation.
  • Quebec raised over approximately $ 248.75 million CAD (approximately $ 187 million USD), which funds local climate investments in the province.

These results demonstrate a couple of notable trends:  Read More »

Also posted in Carbon Markets, Cities and states, Greenhouse Gas Emissions / Read 2 Responses

California releases updated Tropical Forest Standard: Here are the highlights and why CARB should endorse it

By / Bio / Published: August 2, 2019

The California Air Resources Board (CARB) this week released an updated version of the proposed Tropical Forest Standard (TFS) for consideration at its September 19 Board meeting. CARB made some important changes to the TFS in response to feedback from members of the California Assembly, indigenous leaders, environmental groups, environmental justice advocates, and subject-matter experts.

Endorsement of the TFS would value tropical forests for the extensive climate benefits they provide. It would also be a major step forward for tropical forests and the communities who live in and defend them. And these proposed changes would make the TFS even stronger in the fight against tropical deforestation.

In general, the changes CARB has made – responding to public and policymaker feedback – add detail and clarity that strengthen the accountability built into the TFS. The more specificity, the easier it is to ensure the standard is upheld and ultimately helps deliver the emission reductions from stopping tropical deforestation that the climate so desperately needs.

Here are the key changes to the proposal. (A Tropical Forest Standard refresher may be helpful before diving in.)

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Also posted in Carbon Markets, Forest protection, Indigenous People / Read 1 Response

What ProPublica’s forest carbon credits story still gets wrong – and right (with update)

By / Bio / Published: May 23, 2019

By Steve Schwartzman, Senior Director, Tropical Forest Policy, and Christina McCain, Director, Latin America

Amazon Canopy. Warwick Lister-Kaye / istockphoto.com.

***Please read on for our response to ProPublica’s follow-up article***

ProPublica’s recent piece An (Even More) Inconvenient Truth is a deeply reported story on very real problems – and even bigger potential problems – with offset projects in existing and emerging carbon markets. But the evidence the article lays out does not support its conclusion about forest carbon crediting. And readers might come away without understanding that protecting forests, including through forest carbon credits, is one of the most important solutions to climate change out there, and the planet can’t afford to dismiss this opportunity to solve the climate crisis.

Missing: The critical distinction between individual “projects” and large-scale, state-level programs to reduce deforestation

It’s not news that bad carbon credits won’t solve climate change. Lots of studies have shown that there are all kinds of bad offset projects, and definitely not just forest projects. But today’s jurisdictional forest credits aren’t your parents’ forest project offsets: they’re real emissions reductions. Though you wouldn’t be able to tell that from the ProPublica story.

The ProPublica piece fails to distinguish large-scale national or provincial programs to reduce emissions from deforestation – known as “jurisdictional” programs – from one-off, small “projects” to reduce deforestation. ProPublica’s implication that old projects had failings and therefore now so must contemporary jurisdictional programs, is like saying flip phones had all sorts of problems, so all cell phones must be unreliable and we should shun smartphones.  Read More »

Also posted in Brazil, Carbon Markets, Forest protection, Indigenous People, Paris Agreement, REDD+, United Nations / Read 5 Responses

In strong WCI auction, prices clear significantly above floor. Here’s why.

By / Bio / Published: May 22, 2019
shutterstock_574821853 full size

The California coast. Shutterstock.

The strong results of today’s California-Quebec cap-and-trade auction once again illustrate the stability of the market as all current and future allowances sold. At the same time, we are seeing some interesting market trends.

May auction at-a-glance

  • All 66,321,122 current allowances sold, clearing at $17.45, $1.83 above the floor price of $15.62. This is the highest price and highest premium on the floor price seen in a linked Western Climate Initiative (WCI) auction, and $1.72 higher than the February 2019 clearing price.
  • More than 14.5 million fewer allowances were offered for sale than at the February auction because there were no previously unsold allowances from California. This is the first time an offering has not included previously unsold California allowances since August 2017.
  • All of the 9,038,000 future vintage allowances offered also sold at $17.40, $1.78 above the $15.62 floor price. These allowances are not available for use until 2022.
  • The auction raised over approximately $740 million for the Greenhouse Gas Reduction Fund, which California uses to support climate investments in agriculture, transportation electrification, and improving local air quality.
  • Quebec raised over approximately $250 million CAD (approximately $190 million USD) to fund climate investments in the province, adding to the $3 billion CAD in revenue already generated.

So why is the price significantly above the floor price? A couple of different factors could be contributing to the clearing price in May’s auction:  Read More »

Also posted in Carbon Markets / Read 1 Response