Tag: price on carbon

Canadian Federal Government Announces Minimum Carbon Price for Provinces to Meet

On October 3, 2016, Prime Minister Trudeau announced that the federal government will set a minimum price on carbon starting at $10 per tonne in 2018, and increasing by $10 per year for the next four years until it reaches $50 per tonne by 2022. Each province will be required to implement carbon pricing in its jurisdiction within two years – whether in the form of a carbon tax or a cap-and-trade system – which must meet the federal minimum price. Otherwise, the federal government will impose a tax that makes up the difference and return the revenue to the province. In addition, provincial emission reduction goals for reducing emissions must be at least as stringent as federal targets. Currently, Canada’s four biggest provinces – Ontario, Quebec, Alberta and British Columbia – have carbon pricing plans in place.

The Prime Minister said he will convene a first ministers’ meeting on December 8 with the aim of concluding a pan-Canadian climate plan, which would include carbon pricing and other measures.

 

More than 100 of the World’s Leading Companies Call for a Clear Price on Carbon

 
Shell, Unilever and more than 100 of the world’s largest companies recently released a statement calling upon lawmakers around the world to put a “clear, transparent and unambiguous price” on carbon emissions in order to address the climate challenge and help manage the business risk associated with climate change. The statement (available online), which is due to be presented to European Commissioner for Climate Action Connie Hedegaard in Brussels, calls for clarity to open channels for investment in infrastructure projects and its authors explain that in many cases, companies do not consider goals to cut greenhouse gas (GHG) emissions. The letter notes a key lesson from existing carbon pricing systems – without a sufficient carbon price signal, companies will have no incentive to invest in low-carbon projects or technology.

A price on carbon emissions must be core to policy objectives in order for the business community to deliver substantial GHG emission reductions and help the world meet the UN goal of containing the global temperature increase to two degrees Celsius. According to the International Energy Agency (IEA), almost 80% of the emissions allowable by 2035 under a two-degree scenario are already locked in because of future GHG emissions from existing power plants, factories and buildings. By 2017, all the allowable emissions will be locked in if no action is taken, the IEA said.

The letter was coordinated by Prince Charles’s Corporate Leaders Group on Climate Change, a group of companies brought together by Prince Charles and managed by the University of Cambridge. Other signatories include Bullfrog Power, Vattenfal, Alstom, Acciona, Skanska and Aviva.

The statement comes at an opportune time as Climate envoys from more than 190 nations are gathering in Doha from November 26 to December 7, 2012 for UN negotiations on climate change.



 



	


	





	

		
		
California Holds Successful First Auction of Carbon Allowances
	


	
	
	

		
 

The California Air Resources Board (CARB) held its first auction on November 14, 2012 for the purchase and sale of carbon allowances for its planned cap-and-trade regime. Mary Nichols, chairman of CARB, declared the auction a success:


“The auction was a success and an important milestone for California as a leader in the global clean tech market. By putting a price on carbon, we can break our unhealthy dependence on fossil fuels and move at full speed toward a clean energy future.  That means new jobs, cleaner water and air – and a working model for other states, and the nation, to use as we gear up to fight climate change and make our economy more competitive and resilient.”


The auction results were released to the public on November 19th (available online) .  A tonne of carbon for the 2013 vintage year sold for $10.09, which is slightly above the $10.00 price floor set by CARB. The highest bid was a whopping $91.13.  Also, there was three times the number of bidders at the auction than actual buyers, indicating a healthy and competitive market. Furthermore, 97% of allowances were purchased by regulated entities indicating that prices were not influenced by speculative buyers. Instead, it seems to indicate that regulated entities are looking to retire allowances for compliance purposes.  Perhaps most importantly, the auction sold out with all 23,126,110 2013 vintage year allowances being purchased, raising approximately US$233 million. This auction kicks off the largest carbon market in North America and the second largest in the world, behind the European Union Emissions Trading Scheme.


California’s partners in the Western Climate Initiative (WCI) – including British Columbia, Manitoba, Ontario, and Québec – are no doubt paying close attention.  Apart from Québec, which will launch its emissions trading system on January 1, 2013 with California, the success of California’s cap-and-trade program may spur the other WCI partners into action to implement a similar scheme.