China has launched its carbon emissions trading (updated)

China has launched the world largest carbon emissions trading program last week.

According to Wall Street Journal, 2225 power plant companies are included in the program. These companies make 40% of the CO2 emissions in China.

The aim of the trading is to help China to reach the peak emissions by 2030 and carbon neutrality by 2060.

It is estimated that during the first year the trading would include entities with over 26.000 tonnes a year. The price of a carbon unit is expected to be about 4 dollars per tonne. This is much lower price than in the EU ETS Programm or in the UK.

The Chinese carbon market is expected to be about 800 million dollars during the first year and increasing to about 25 billion dollars by 2030.

Next year the trading could include also cement, aluminium and steel. And later include other industries like chemicals, building materials, iron, paper and domestic aviation.

The China Ministry of Ecology and Environment (MEE) is acting as market regulator.

EU’s climate proposals: new taxations and renewing ETS

The EU Comission presented new climate proposals yesterday. According to the proposals EU is looking to include för exemple the shipping emmissions to the European Emission Trading System, ETS and to introduce carbon border tax.

The aim of the proposals is to reduce the carbon emmissions so that by 2030 the emissions would be at least 55% lower compared to 1990 levels. The target is also to enhance the Green Deal.

The EU is also conserned of the Social impact of the climate and Energy transition. All the studies show that unbalansed climate actions could increase the economic differences. The EU is planning to start a new fund to mitigate the impact of transition change.

According to the proposals, EU is targeting climate neutrality in the land use by 2035. This includes changes in the forestry and agri sector. EU is also planning to plant three billion trees by 2030.

All new cars would be zero-emissions by 2035. In the aviation sector, sustainable, renewables fuels are to be increased in the energy mix.

The new carbon border tax would put a carbon price on imports. This would mean that products with higher manufacturing emmissions would have to pay a carbon price.

G7: 100 days target to react to new pandemics – Law of Seas to be updated

The G7 leaders agreed during the weekend meeting in the UK Cornwall, to speed up the reaction to new pandemics. According to the official declarations, the new target is 100 days. This means that countries should have access to effective vaccines, therapeutics and diagnostics within that time period after the public health emergency is declared.

-We will work together to invest in innovation now with the aim of making safe and effective vaccines, therapeutics and diagnostics available within 100 days of a Public Health Emergency of International Concern (PHEIC) being declared, consistent with our core principles of equitable access and high regulatory standards, and noting the unpredictable nature of future health emergencies, the group said.

-We will champion an integrated and systems-based One Health approach across all aspects of pandemic prevention, preparedness, detection and response and work to foster a healthier planet. 

-Building on past G7 and G20 commitments, we call on our Health, Finance, Environment and Foreign and Development Ministers to continue to take action to tackle antimicrobial resistance. Recognising the links between biodiversity loss, environmental degradation and risks of zoonotic disease, we commit to play our part to halt and reverse global biodiversity loss, including through our G7 2030 Nature Compact, the group said.

-We, the G7 Leaders, commit to work expeditiously and collectively toward the goal of ending the COVID-19 pandemic, while also recognising that the next one could come at any time, they said.

The G7 also confirmed their commitment to prevent the biodiversity loss and to mitigate climate change.

According to the environmental targets, the group is supporting new global targets to conserve or protect at least 30% of global land and at least 30% of the global ocean by 2030 as a critical foundation for the conservation and restoration efforts required this decade.

The Group is also stating that a majority of the global oceans are outside of national jurisdiction. And this means that the work to update, develop and steer the new Law of the Seas (Unclos) under the UN Convention will be done, possibly by the end of this year. This will also mean that the size of Marine Protected Areas (MPAs) will be increased for example in the Antarctic and its Peninsula.

Al Gore: US and China can cooperate in Climate issues

The former US Vice President Al Gore believes that the US and China can cooperate in the Climate issues although the countries are facing extreme competition in other areas. He was speaking at the World Economic Forum “Tackling the Climate Crisis” on Thursday.

He said also that he is confident that China will achieve or even overachieve its climate goals in the coming decades. Gore says that some information will suggest that China is limiting its coal consumption during the next five years and this will be part of the emission reductions in order to meet the carbon targets.

Speaking about the new US Climate emissions targets and investments in green and sustainable growth, Gore is optimistic and confident. -Green investments are 3-times powerful per dollar than traditional ones, he was referring to the economic growth impact of green investments.

US to reduce emissions by 50% by 2030 – Biden

The US President Biden announced the US will target reducing emissions by 50-52 percent by 2030 compared to 2005 levels. Speaking at the Biden´s Leaders virtual Climate Summit last week, the Biden-Harris Administration published also several green initiatives to foster the low-carbon economy, infrastructure changes and moving to more renewable energies. The aim is limit the global warming to 1,5 degree C.

-I see an opportunity to create millions of good-paying, middle-class, union jobs.  I see line workers laying thousands of miles of transmission lines for a clean, modern, resilient grid.  I see workers capping hundreds of thousands of abandoned oil and gas wells that need to be cleaned up, and abandoned coalmines that need to be reclaimed, putting a stop to the methane leaks and protecting the health of our communities, president Joe Biden said in the virtual meeting.
 
-I see autoworkers building the next generation of electric vehicles, and electricians installing nationwide for 500,000 charging stations along our highways.  I see engine- — the engineers and the construction workers building new carbon capture and green hydrogen plants to forge cleaner steel and cement and produce clean power. I see farmers deploying cutting-edge tools to make soil of our — of our Heartland the next frontier in carbon innovation, he continued.
 
-By maintaining those investments and putting these people to work, the United States sets out on the road to cut greenhouse gases in half — in half by the end of this decade.  That’s where we’re headed as a nation, and that’s what we can do if we take action to build an economy that’s not only more prosperous, but healthier, fairer, and cleaner for the entire planet. 
 
-You know, these steps will set America on a path of net-zero emissions economy by no later than 2050.  But the truth is, America represents less than 15 percent of the world’s emissions.  No nation can solve this crisis on our own, as I know you all fully understand.  All of us, all of us — and particularly those of us who represent the world’s largest economies — we have to step up, the US president Biden said.

FED: Climate Change committee to identify the risks to financial markets

The US Federal Reserve has built a Financial Stability Climate Committee to identify and analyse the climate-related risks to financial markets stability.

-We are building the requisite institutional capacity and knowledge to deepen our understanding of these risks and vulnerabilities. The new FSCC is a Systemwide committee charged with developing and implementing a program to assess and address climate-related risks to financial stability. The broad goals of the FSCC are to promote the resilience of the financial system to climate-related financial risks, to ensure coordination with the Financial Stability Oversight Council (FSOC) and its member agencies, and to increase the Federal Reserve’s international engagement and influence on this issue, the Fed Governor Lael Brainard said (23.3.2021).

-To support the work of these committees and the broader work throughout the Federal Reserve System, we are investing in new research, data, and modeling tools. In light of the high uncertainty inherent in estimating climate-related shocks, scenario analysis may be a helpful tool to assess the effects on the financial system under a wide range of assumptions, the Central Bank said.

EU Commission to revise emission trading by summer

The European Commission is planning to revise its emission trading system, ETSI by summer. According to Commission President Ursula von der Leyen, the Commission is enhancing the emission system to boost renewable energy and improve energy efficiency.

–The With NextGenerationEU, we will invest in clean hydrogen as never before. Clean hydrogen is a perfect means towards our goal of climate neutrality. Clean hydrogen can: power heavy industries, propel our cars, trucks and planes, store seasonal energy and heat up our homes. All of this with almost zero emissions. Clean hydrogen is the way to go, President von der Leyen said yesterday in Berlin, Germany.

-This is why, by this summer, we will revise our entire climate and energy legislation to make it ‘fit for 55′. We will enhance the EU Emissions Trading System. We will come forward with proposals to boost renewable energy and improve energy efficiency; and we want to take green financing to the next level. Because to achieve our 2030 goal, we need to boost green investment, she said.

ECB is building a climate change centre

The European Central Bank (ECB), has decided to set up a climate change centre to bring together the work on climate issues in different parts of the bank. According to central bank, this decision reflects the growing importance of climate change for the economy and the ECB’s policy, as well as the need for a more structured approach to strategic planning and coordination. The central bank announced the new structure in January 2021.

-The new unit, which will consist of about ten staff working with existing teams across the bank, will report to the ECB’s President, Christine Lagarde, who oversees the ECB’s work on climate change and sustainable finance, the ECB said in the release.

-The climate change centre will shape and steer the ECB’s climate agenda internally and externally, building on the expertise of all teams already working on climate-related topics. Its activities will be organised in workstreams, ranging from monetary policy to prudential functions, and supported by staff that have data and climate change expertise. The climate change centre will start its work in early 2021, the central bank said.

Powell: Fed is entering Climate Change risk management by engagement

The US Federal Reserve, Fed Chairman Jerome Powell said in today’s press conference that the Fed is entering the Climate Change risk management with careful planning and by engaging with different stakeholders, like public as well.

Mr Powell said that Climate Change is a topic which is related for example to credit and cybersecurity risks and thus the Central Bank is taking a careful planning around the issue. The Fed announced yesterday that it has joined the global network of central banks greening financial systems organization in order to share best practises and increase the engagement.

He did mention that the Central Bank is not thinking of changes in its credit allocations, like exclusions of different industry sectors. Powell reminded that the real concerns at the moment are the supervision and the financial markets stability.

FED to join the green network of Central Banks

The Fed, the US Federal Reserve, has joined the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). According to Fed Chairman Jerome Powell, this will enable the further discussions with other central banks about the impact of climate change on the financial markets.

NGFS supports the exchange of ideas, research, and best practices on the development of environment and climate risk management for the financial sector. The organization has published for example research of how different central banks are integrating ESG (environmental, social and governance) issues to their own portfolios or pension funds. According to the publication, the different hybrid models of ESG portfolio strategies show that the portfolio management can be different due to the lack of standardised data management and taxonomy.