Climate 411

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

By Erica Morehouse / 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 Katelyn Roedner Sutter / 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.)

Read More »

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 Steve Schwartzman / 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 Katelyn Roedner Sutter / 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

Defending the Amazon, and our planet, from “Trump of the tropics”

By Steve Schwartzman / Published: March 25, 2019
DeforestationWithCattle&Forest_19735891_Shutterstock.com_RF

Cattle grazing at a ranch where burned trees and the edge of the rainforest are still visible in Brazil. Shutterstock.

Presidents Trump and Bolsonaro had a lot of common ground to share when they met in Washington last week – racism, misogyny, conspiracy theories, and contempt for science and journalism (the high quality type). They also converge on an early 1900’s view of development and environment as a zero-sum game. The more you have of one, the less there is of the other.

The economics don’t add up for either of them. Trump crows about “beautiful” coal, but the market says coal is a loser compared to renewables and cleaner fuels. Bolsonaro wants to get out of the Paris climate accord and roll back indigenous land rights in favor of agribusiness and mining. Meanwhile, the executive director of the powerful Brazilian Agribusiness Association says “Whoever wants to leave the Paris Agreement has never exported anything.”

Climate denial is central to Trump’s and Bolsonaro’s mindsets, and here the conspiracy theories really go to town. Trump thinks climate change is a Chinese conspiracy to strangle the US economy. Bolsonaro’s Foreign Minister thinks climate change is part of a “cultural Marxist” plot to keep down western democracies and build up Marxist China (he also thinks the “cultural Marxists” want to criminalize red meat and heterosexual sex). Interestingly, former President Dilma Rousseff’s first Minister of Science and Technology, former Communist Party of Brazil Congressman Aldo Rebelo, thought climate change was a capitalist conspiracy to crush Brazilian development. Why let political differences spoil a good conspiracy theory?

You can really only hold on to that early 20th century dichotomy if you ignore the costs of climate change – and the economic opportunities that arise from fixing the problem.

Read More »

Also posted in Brazil, Carbon Markets, Forest protection, Indigenous People / Comments are closed

California-Quebec market continues to thrive

By Katelyn Roedner Sutter / Published: February 27, 2019
California cap and trade, renewable energy

Alta Wind Energy Center, California, Photo source: Steve Boland/flickr

February’s joint California-Quebec cap-and-trade auction demonstrated again that the market is strong. Despite uncertainty over PG&E’s position in the aftermath of its bankruptcy filing last month, all current and two-thirds of future allowances sold.

February’s auction by the numbers:

  • All 80,847,404 current allowances sold, including previously unsold allowances and consigned allowances from utilities like PG&E. This sale cleared at $15.73, 11 cents above the floor price of $15.62.
  • 5,983,000 of the 9,038,000 future vintage allowances offered also sold at the floor price. These allowances are not available for use until 2022. This is the first auction since the floor price increased to $15.62, so businesses have three more auctions at this price floor to purchase allowances that cannot be used for three more years.
  • Approximately $853,508,096 was raised for the Greenhouse Gas Reduction Fund which the state uses to support climate investments in frontline communities, improvements in local air quality, and other projects to further reduce greenhouse gas emissions.

Read More »

Also posted in Carbon Markets / Read 1 Response