Carbon Pulse

Carbon pricing is a key policy tool to ensure climate success, especially when combined with subsidies for clean energy and effective regulation such as state-induced coal phaseout, according to an international report published this week. The wide-ranging study, using AI-facilitated analysis of 41 countries across six continents, argued that the most effective way for nations to tackle their emissions is a combination of several financial and regulatory levers, including carbon taxes and trading schemes. "The key characteristic of these successful cases is the inclusion of tax and price incentives in well-designed policy mixes," the authors of the report, led by Berlin-based climate research institute MCC and the Potsdam Institute for Climate Impact Research (PIK), wrote. Researchers analysed up to 1,500 approaches around the world to assess the many policy attempts to curb global warming, already expected to have breached the Paris Agreement's 1.5C recommended lower limit. The study concluded that the most effective initiatives in countries like the UK, Norway, the US, and China combined a range of policies, including subsidies, regulations, and pricing mechanisms. Read our coverage in full 👉 https://lnkd.in/ebieb_fk

Driving international emissions trading of carbon removal (CDR) credits can balance out geographical differences, such as storage suitability occurring in some regions and not others, and, when combined, can significantly scale new technological capacity and bring down costs, according to a new report. Various CDR options differ in terms of technological and institutional readiness, cost, land use, permanence of CO2 removal, and social acceptance, and these variations are likely to change across regions and over time, the report, published in Nature Communications on Wednesday, stated. But despite a lot of research focused separately on international emissions trading and on CDR, there is limited discussion in the literature about the interactions between the two, the authors from Massachusetts Institute of Technology (MIT), the University of Illinois, and oil giant ExxonMobil, argued. The paper focused specifically on afforestation and reforestation (ARR), and bioenergy with carbon capture and storage (BECCS) to investigate the two-way nature of the relationship between land-based CDR deployment and international emissions trading. It found that the availability of CDR substantially increases the scale of international emissions trading, and the presence of a trading mechanism also substantially increases the scale of removal project deployment. Read our coverage in full 👉 https://lnkd.in/epnygTF6

Australia’s heavy emitters could reach net zero before 2050, a date adopted by the country as well as many large companies, should baseline emissions reductions covered under the Safeguard Mechanism bump up. Melbourne-headquartered carbon consultancy Reputex said in a note Tuesday that, despite the relative stability of the past six months of the Australian Carbon Credit Unit (ACCU) market, change is coming as Australia is set to submit its updated Nationally Determined Contribution (NDC) for 2035. Australia’s current target is a 43% reduction in emissions by 2030 below 2005 levels. Several other outlooks published have suggested that with more renewables investment the nation could overshoot this ambition, but that in 2023 emissions were only 1.5% below 2005. Read our coverage in full 👉 https://lnkd.in/e4mZEHw3

Game-changing carbon pricing news out of New Zealand this morning: https://lnkd.in/ggvtDemD

The coalition government’s decision to follow the Climate Change Commission’s advice on emissions trading scheme price settings and auction volumes has been broadly welcomed, participants told a conference Tuesday, but key issues relating to the scheme have yet to be resolved. Multiple actors in the market released statements and told the Carbon Forestry 2024 conference in Rotorua that the government’s decision to leave the ETS price controls settings alone and slash the number of NZUs available at auction by roughly half would go some way to restore confidence to the scheme. Read our coverage in full 👉 https://lnkd.in/eCCUdiaT

Heightened demand from carbon credit buyers located in the Global South will be key to retaining climate finance in-country and pursuing sustainable development in emerging economies via the voluntary market, instead of relying on foreign investors from the North, market experts told a conference in Mexico last week. Statements in favour of South-South cooperation, particularly across Latin America, come amid lingering questions about the compatibility of carbon markets priorities in high-income, post-industrial countries and lower-income countries pursuing economic growth and human development. Read our analysis and coverage of the event in full here 👉 https://lnkd.in/eXUu4ypK

The World Bank has priced what it says is the first bond linking investors' financial return to carbon removals from reforestation in the Amazon. The 9-year, $225 million, principal-protected Amazon Reforestation-Linked Bond, issued by the World Bank, provides investors with a coupon including a fixed guaranteed component and a variable component linked to the generation of carbon removal units (CRUs) from reforestation projects in parts of Brazil's Amazon rainforest. It is the first outcome bond to connect investors' financial return to removing atmospheric carbon, differing from previous transactions linked to the sale of carbon credits from avoided emissions, the World Bank said in a statement. The transaction will see about $36 mln of capital mobilised to support the reforestation activities of Mombak, a carbon removals developer located in Brazil, which will use the funds to acquire land or partner with landowners in the Amazon to reforest the land with native trees. Read our coverage in full 👉 https://lnkd.in/eX_tJx7A

International air carriers' association IATA has urged that greater supply of CORSIA carbon credits be made available to the market to enable the aviation industry to effectively decarbonise, warning of a looming shortage. There is a significant disparity between supply and demand of Eligible Emissions Units (EEUs) under the UN's international aviation offsetting scheme, according to the organisation. As of 2024, 126 countries have opted to participate in CORSIA, which is operated by UN agency ICAO, with the demand for EEUs projected to range between 64-162 million units during Phase 1 (2024-26), depending on traffic forecast scenarios. But the current supply of EEUs is “extremely limited”, with just 4.6 mln units made available earlier this year through the Architecture for REDD+ Transactions programme (ART TREES), which is tied to a project in Guyana. Read our coverage in full 👉 https://lnkd.in/e8iGHNzG

Carbon markets globally are being held back due to a lack of trust, but they could be a game changer in advancing climate action and bring tangible benefits, especially for developing countries, according to a report published by the World Bank. In a report titled “High Integrity, High Impact: The World Bank Engagement Roadmap for Carbon Markets”, released this week, the World Bank said that if done right, carbon markets can serve as a crucial mechanism for financing decarbonisation efforts and significantly enhance financial flows to developing countries. “By assigning a financial value to carbon reduction and removal, carbon markets encourage private sector engagement in projects that might otherwise struggle to secure funding, especially without a clear price signal,” the bank said. “Countries and communities blessed with natural resources, such as forests, can generate millions, if not billions of dollars from new sources of revenue from protecting, preserving, restoring, and regenerating them.” To date, the World Bank has supported 47 nations in the development of REDD+ projects under its Forest Carbon Partnership Facility (FCPF), launched in 2008. Read in full here 👉 https://lnkd.in/eWiDYRmx

DATA DIVE: Check out our new data journalism offering, led by Nick Ferris: https://lnkd.in/es2pvmcU Carbon Pulse will further build out this effort to dive deep into larger energy and climate-related data sets to analyse the figures, identify the trends, and employ visualisations that deliver compelling and insightful news for our subscribers. Watch this space...