Climate 411

As it enters its eleventh year, California’s cap-and-trade program continues to raise revenue to fight the climate crisis

This blog was co-authored by Katelyn Roedner Sutter, California State Director 

Results of the latest Western Climate Initiative auction were released today, and we continue to see strong demand for allowances. This was the first quarterly auction of 2024, and it was a strong start for this marquee climate program.

This auction is expected to generate roughly $1.31 billion for the Greenhouse Gas Reduction Fund, which will invest in projects around the state that electrify transportation, reduce household energy costs, strengthen resilience to natural disasters, and more. This funding comes at a crucial time, as California faces both ongoing impacts from climate change and a challenging budget year.

February auction results

  • All 51.2 million current vintage allowances offered for sale were purchased, resulting in the 14th consecutive sold-out auction. This is 11% or 6.4 million fewer allowances than were offered at the previous auction.
  • The current auction settled at a record price of $41.76, $17.72 above the $24.04 floor price and $3.03 above the November 2023 settlement price of $38.73.
  • All of the 7.2 million future vintage allowances offered for sale were purchased — these allowances can be used for compliance beginning in 2027. This is about 366,000 allowances fewer than were offered at the previous advance auction.
  • Future vintage allowances settled at $41.00, $16.96 above the $24.04 floor price and $3.60 above the November settlement price of $37.40.

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Also posted in California, Carbon Markets, Cities and states, Greenhouse Gas Emissions / Leave a comment

Want to understand Natural Climate Solutions Crediting? We have a handbook for that.

Cover image of the Natural Climate Solutions Crediting Handbook

The Natural Climate Solutions Crediting Handbook

This blog was authored by Christine Gerbode, EDF’s Manager of Jurisdictional Alliances and Britta Johnston, Senior Policy Analyst for Natural Climate Solutions at EDF.

Natural climate solutions are essential to achieving our global climate goals. A range of studies suggest that a major global scale-up of NCS activities (that is, ways of protecting, restoring, and better managing ecosystems and working lands) can contribute as much as a third of the climate mitigation needed to keep us on track with global climate goals by 2030. That’s in addition to the many other benefits that NCS can bring to people and the planet.

Well-designed NCS crediting systems can help channel urgently needed finance to the people, communities, and countries that steward natural ecosystems and working landscapes.

But NCS crediting remains controversial, in part because it can be a challenge to understand: new crediting methods, business models, and policy frameworks are evolving quickly at local and international levels, and competing messages come from passionate voices working on all sides. If uncertainty, misunderstandings, and confusion lead to unwarranted mistrust of NCS crediting, well-intentioned actors might be pushed to unnecessarily abandon one of the most powerful potential tools in the climate fight.

Stakeholders across the climate space need urgent help to cut through the noise on NCS crediting. The NCS Crediting Handbook aims to meet this need by clearly laying out how high-quality NCS crediting can work—for credit sellers, for credit buyers, and as part of an effective and ethical global climate response.

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Also posted in Carbon Markets, Forest protection, REDD+ / Comments are closed

Now is the time for companies to help conserve nature. By investing in jurisdictional REDD+, they can do just that

Tropical rainforest. Leslie Von Pless / EDF

Tropical rainforest. Leslie Von Pless / EDF

By Breanna Lujan, Senior Manager, Natural Climate Solutions 

The clock is ticking to halt and reverse deforestation so that we avoid the worst impacts of climate change. The good news is that companies can provide the finance needed to keep the world’s forests standing by purchasing high-quality emissions reductions credits from large-scale tropical forest conservation programs, otherwise known as jurisdictional REDD+ (JREDD+).  

In a jurisdictional scale approach to REDD+, a country, state, province or Indigenous territory has the authority to issue credits for forest carbon emissions reductions and removals. Due to the large scale at which they operate, JREDD+ programs have distinct and intrinsic features that enable them to meet key tenets of environmental and social integrity. JREDD+ programs can:  

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

An Opportunity to Strengthen Climate Risk Management in the Derivatives Market

(This post was co-authored by EDF Climate Risk Attorney Elle Stephens)

Disasters that are fueled by climate change, like fires, floods, and hurricanes, increasingly pose risks to the U.S. financial system, including the derivatives market.

The U.S. Commodity Futures Trading Commission (CFTC) regulates the derivatives market and is now considering updates to its risk management regulations. These updates are an important opportunity to ensure that market participants properly manage climate-related financial risks.

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Also posted in Partners for Change, Policy / Comments are closed

The Hydrogen Hubs are here. What do communities think about them?

In October, the White House announced the selection of seven Hydrogen Hubs around the U.S. to be a part of the Department of Energy (DOE)’s Regional Clean Hydrogen Hubs Program (H2Hubs), which will deploy $7 billion toward projects over eight to twelve years (or sooner). Launched under the Bipartisan Infrastructure Law, the Hydrogen Hubs program aims to create networks of hydrogen producers, consumers and infrastructure – and is likely to set many precedents that may scale-up in a clean hydrogen economy, ranging from technological strategies to the standard approaches for community engagement. Hub developers now enter their next, more in-depth planning phases to secure the coveted DOE funding and to eventually start building out the Hubs.

Selected regional clean hydrogen hubs

A primary challenge for these programs lies in translating strong technological innovation practices into responsible and collaborative on-the-ground infrastructure projects. This requires extensive engagement and partnership with local communities – a core part of EDF’s BetterHubs objectives – to mitigate potential harms and ensure the projects deliver positive outcomes and avoid additional related burdens for local communities. This is especially salient in the case of environmental justice communities, which have borne the burden of decades of environmental impacts and are a stated priority for DOE’s engagement as part of the Hub’s program.

While all Hub developers are required to engage and negotiate a Community Benefits Plan with communities, there are many details yet to be determined for most Hub proposals – including how best to engage communities, which communities will be impacted, and how to design and populate Community Oversight Committees. Underlying the success of these processes is the assumption that communities are starting from a position of empowerment. Have they been provided with access to information about what hydrogen development is, what it requires, the context that brings these specific projects to their neighborhoods? Have they been made aware or included in the planning of Hub proposals in their area? If they desire additional information and outreach, how would they like to be involved, and what kind of information would they trust and prefer?

EDF partnered with Morning Consult to conduct a survey in early October, during the week when Hub selection announcements were made. We asked community members who were located in zip codes associated with the 22 final stage DOE applications (as identified by Rystad Energy) a range of questions related to their area’s Hydrogen Hub application and received 600 responses.

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Posted in News / Comments are closed

New York is developing a cap-and-invest program to cut climate pollution. How would it work?

As a major next step in achieving New York’s climate targets, Governor Hochul and state agency officials are developing rules for a cap-and-invest program. A bold and equitable program would aggressively cut climate pollution, while supporting and investing in clean and healthy communities around the state.

This rulemaking could be game-changing for New York — and for the nation.

New York would be the third state in the country to put a declining cap — or limit — on emissions across its economy, building on successful models from California and Washington state. And critically, this program is coming together right as new analysis underscores the need for leading states to follow through on their climate commitments and drive national climate progress.

Here’s what to know about how a cap-and-invest program would work in New York as these rules come together.

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Also posted in Cities and states, Greenhouse Gas Emissions / Comments are closed