Tag Archives: trading
California And Australia Bolster Carbon Trading Ties
Memorandum of understanding comes weeks after Australian Prime Minister Kevin Rudd pledged to accelerate introduction of emissions trading scheme By Jessica Shankleman 31 Jul 2013 California and Australia have agreed to step up efforts to work together to link their respective carbon markets, just weeks after Australia’s prime minister announced he would accelerate plans to replace the country’s carbon tax with an emissions trading scheme. California’s Air Resources Board and Australia’s Clean Energy Regulator yesterday signed a memorandum of understanding that aims to establish a working relationship for the two organisations to co-operate on efforts to curb greenhouse gas emissions . The agreement builds on existing work over the last year, which has seen the two organisations share some of the practical experiences gained introducing a new carbon market. The new framework focuses on measures to increase investment in clean energy generation and improve market integrity, as well deepening collaboration between the two agencies. For example, it will allow the organisations to share information on designing and running carbon pricing programmes and discuss how they could link their markets in future . Mary Nichols, chairwoman of CARB, said the agreement would continue California and Australia’s “productive relationship” as both jurisdictions seek to expand their carbon markets. “It is another step forward in California’s efforts to establish relationships with other programs to continue sharing information and best practices to fight the global danger of climate change,” she said. The agreement comes just weeks after Prime Minister Kevin Rudd said Australia would replace its carbon tax with an emissions trading scheme (ETS) a year earlier than planned if his Labor party were to win this year’s election. Rudd wants the fixed price on carbon to end on 30 June 2014, rather than 2015, with a floating market linked to the European Union’s ETS opening the following day. Continue reading
China In Carbon Trading Experiment
18 June 2013 China in carbon trading experiment China will pilot its scheme in seven places; Shenzhen, Beijing, Shanghai, Tianjin, Chongqing and the provinces of Hubei and Guangdong China, the world’s biggest carbon emitter, is to launch its first carbon trading scheme as a pilot project in Shenzhen. The test scheme, which will be rolled out to seven areas by 2014, could be spread across the country after 2015. Beijing is aiming to reduce the amount of carbon dioxide emitted per unit of gross domestic product by 40-45% from 2005 levels by 2020. The government has previously faced pressure to reduce pollution in cities. Expensive habit? Carbon emissions trading schemes are meant to encourage companies to reduce their carbon dioxide emissions by setting a limit, called a cap, on the level of carbon dioxide that can be emitted in a region. Companies are given credits, each equal to one tonne of carbon, which they can then buy and sell according to individual needs. Watch: China is launching a new carbon trading scheme in the country’s southern city of Shenzhen. The bigger polluters have to bear the added cost of buying more carbon credits, while the less polluting companies can make money by selling their credits. The Shenzhen Carbon Exchange is set to launch on Tuesday. It will cover 635 industrial and construction companies. A previous statement from the exchange said it expected to add transport firms as well as all major companies that consume oil, gas, coal and power. Shenzhen is the smallest of the test regions in terms of overall carbon emissions. China will pilot its scheme in six other places; Beijing, Shanghai, Tianjin, Chongqing and the provinces of Hubei and Guangdong. Price swings Carbon trading schemes have encountered problems elsewhere in the world. Recently the biggest carbon-trading scheme in the world, run by the European Union, nearly collapsed. Launched in 2008, the system began successfully with the price for carbon emission credits rising to $40 (£25.50) a tonne, encouraging some companies to switch to using cleaner fuels. However, as Europe entered its prolonged economic crisis, industrial activity fell dramatically, reducing the need for companies to buy emissions credits. Along with other factors, this caused a gradual fall in the price of carbon credits and in recent weeks the price has fallen below $4 a tonne. “In Europe there was definitely a lot of speculation around the credits – it was one of the most volatile commodities,” said Winnie Tang, a director at Kind Resources an investment and deal advisory firm. “A lot of traders were speculating that the price will keep going up and up, but then all of a sudden the financial crisis hit and the prices dropped.” Continue reading
Global Carbon Trading System Needs Urgent Support Warns UN chair
7 June 2013, 1:27 pm By Ed King The world’s main system of carbon trading needs urgent support from governments if it is to continue functioning effectively and give developing countries access to green technologies. The UN’s Clean Development Mechanism (CDM) has 6900 registered projects in 86 countries, and has issued 1.3 billion certified emission reductions (CERs) since its launch. One CER is the equivalent to a tonne of carbon dioxide. But falling demand for these credits and a lack of policy clarity from governments has left the CDM struggling, with prices dropping by 90%. CDM Executive Board chair Peer Stiansen told a meeting at the UN climate talks in Bonn he was happy with the integrity of the mechanism, but said the global economic outlook and struggling EU emissions trading system indicated there would be no quick fix. “We have proved we can deliver on scale, and that is an important achievement, because we need scalability for this mechanism,” he said. “But currently we are seeing low demand in CERs, which rests in low prices and lack of incentives. It is very frustrating, and we’re seeing the market cannot continue for project developers, and many are leaving.” CDM projects aim to develop low carbon solutions in developing part of the world (Photo: Curt Carnemark/World Bank) Last September a panel set up to assess the health of the CDM warned that allowing it to fail would make it harder to raise finance in the future to help developing countries cut carbon. Joan MacNaughton, vice chair of the high level panel and a former UK civil servant, told the Guardian : “The carbon market is profoundly weak, and the CDM has essentially collapsed. It’s extremely worrying that governments are not taking this seriously.” New restrictions on what types of projects would be accepted by the CDM were introduced at the end of 2012, leading to a spike in applications before that came into effect. Since then Stiansen says they have fallen to around 20 a month. It’s a substantial drop compared to previous years, and the chairman suggested it was indicative of the current uncertainty in the markets over the global desire to pursue a low carbon agenda. “We hope this will be a temporary dip and that countries will move and make decisions to create more demand,” he said. “In 2014 there is a provisional step-up of ambition on the Kyoto Protocol, and positive movements in the ADP [talks on a global emissions deal in 2015] would hopefully raise expectations and raise more demand.” The UN is taking steps to simplify what critics say has become a complicated and lengthy application process. Stiansen said the initial registration and review process on new submissions will be streamlined to just over two weeks. The CDM has also opened three offices in Africa, with a fourth planned in the Carribbean, to promote applications from those regions. “What we have to offer is our moral support. The ones who can take action would be the parties – such as voluntary cancelation of CERs,” he said. “It is limited what the board can do. I want to re-emphasise this is a problem of demand – I do not see this as a problem of supply.” Stiansen’s bleak forecast is shared by analysts, some of whom fear continued lack of demand could hit investment in green development projects in poorer parts of the world. Anja Kollmuss from Carbon Market Watch told RTCC the CDM board has to tighten its application process to ensure projects are environmentally acceptable, but admits that unless governments took steps to drive demand the short-term outlook is bleak. One hope is that a possible aviation emissions agreement could boost demand for CERs. Earlier this week the world’s leading airlines called on governments to agree to a new greenhouse gas offsetting scheme for the aviation industry. “What may happen is that if ICAO [international aviation body] comes to an aviation agreement and they do agree on a market-based mechanism there might be an increase in demand from aviation – but this wouldn’t start till 2020. “I’m not too optimistic that anything will change anytime soon in terms of prices in the CDM” Continue reading
