Europe Has About 1 Trillion Euros of Green Projects Ready to Go Within Two Years: EY (2)

SHORT REPORT:
Oct. 9, 2020 – London – The European Union has about 1 trillion euros of “shovel ready” green projects in its pipeline that could reach financial close within two years, according to a survey by management and accounting firm EY.

The survey covered respondents including about a quarter of the top 30 European construction companies and demonstrates the opportunity available to politicians and investors from the coronavirus pandemic recovery: Climate & Strategy Chief Executive Peter Sweatman, speaking at an online OECD green finance event on Friday about the EY study.

The EU is seeking to shift away from fossil fuels as it beds down a plan to recover from the pandemic. Technology cost reductions, green finance and policy frameworks are seen crucial to get that shift to include a boost to employment. Other regions, including Asia, are seen following similar economic strategies, according to speakers at the OECD event.

Here is a slide from Sweatman’s presentation; the EY report covered 1,000 green projects seen as the tip of the iceberg:

The report dated last month found “all and more of the 12 million full-time workers lost to Covid-19” could possibly be returned into “green and productive” employment if the recovery plan is set right.

Some political groups are worried factories will cut back on EU capacity and output, should the region shift too quickly away from fossil fuels, boosting economic costs versus other regions of the world.

For the full EY report ( eg p5) … see this link:
https://assets.ey.com/content/dam/ey-sites/ey-com/es_es/news/2020/09/ey-summary-report-green-recovery.pdf?download

(Updated early Saturday with context in final paragraphs. Earlier version corrected Sweatman’s title – he was a member of the project steering board.)

EU Carbon Allowances Jump Briefly After Parliamentarians Push Nations to Adopt Surprisingly Ambitious 2030 Target (2)

By Mathew Carr

Oct. 7, 2020 — London — European carbon allowances fluctuated after members of the European Parliament voted for the world’s biggest trade block to adopt a 60% emission-reduction target for 2030.

The target, versus 1990 levels, would be 5 points tighter than that proposed by the European Commission.

EU carbon allowances immediately surged more than 4%, then erased the increase by the close of the market at 5pm London time, partly because of concern about Brexit negotiations, according to newsletter Carbon Pulse.

Finland was among nations immediately on board with the higher level of ambition for 2030, and countries will continue to debate the proposed target for at least the next several weeks:

The biggest group in Parliament said it was concerned that the tighter target may threaten jobs, according to Bloomberg News, which wrote:

The 60% target is higher than sought by the European People’s Party, the biggest political group in the EU Parliament. Still, the EPP will not vote against the climate law as amended in the final ballot scheduled for later on Wednesday, said Peter Liese, key German member of the assembly who oversees environment policies for the group.

“We will abstain, because we sincerely dislike the 60% and think it really endangers jobs,” he said on Twitter. “We are very confident that the Council of the EU will take care that we will come back to the Commission’s proposal of net 55%.”


See this link (paywall):
https://www.bloomberg.com/news/articles/2020-10-07/eu-parliament-boosts-pressure-on-stricter-2030-climate-target?cmpid=BBD100720_GREENDAILY&utm_medium=email&utm_source=newsletter&utm_term=201007&utm_campaign=greendaily&sref=fcMjhrdB

This analyst wasn’t so sure the EPP was right, because the energy transition has already created many jobs and brought in green money to Europe’s governments:

Those countries have benefitted from billions of euros of revenue from selling the right to emit greenhouse gases since the EU carbon market began in 2005.

Having a tighter target for 2030 would mean even higher market prices for emission allowances — and even more revenue for cash-strapped government coffers.

Nations around the world are seen considering carbon pricing as they seek to rebuild their economies after the damage wrought by the coronavirus pandemic.

That’s because carbon taxes and markets, unlike company and payroll taxes, can spur employment as they encourage a shift away from coal, oil and natural gas and toward huge new cleantech investments.

In April, the International Energy Agency said investing in the climate transition would help economies recover and many countries are still finishing their post-Covid-19 recovery plans.

“We believe that by making clean energy an integral part of their plans, governments can deliver jobs and economic growth while also ensuring that their energy systems are modernised, more resilient and less polluting,” the IEA said.


*******
See this for the immediate market reaction to the EU parliament’s vote, announced earlier today:

(This story was updated Wednesday afternoon London time, and again in the evening)

Open Bets on Carbon Futures in North America Are at Record Levels Ahead of Presidential Election

By Mathew Carr

Oct. 7, 2020 — London — Traders are making record bets on North American carbon and renewable futures, as Joe Biden leads in polls ahead of next month’s presidential vote.

Open interest, a measure of trades that have not yet been closed, is at record levels for the time of year, according to data from ICE, the exchange group with most environmental business.

See this snip of a chart on ICE’s website:

From ICE website: https://www.theice.com/microsite/usenvironmentalmonthlymarketreport

The chart shows open positions and trading volume for California carbon allowances, Regional Greenhouse Gas Initiative contracts and Renewable Energy Certificates, by month.

While the August “open interest” figure is slightly lower than previous months this year, it’s the highest ever for August. September data will be published soon.

Biden has an ambitious plan to tackle climate change in the U.S., which is the single country most to blame for the global problem. Near-record greenhouse gas emissions are trapping heat in the atmosphere, which is boosting wildfire, drought, storm and flooding costs around the world.

China, which has overtaken the U.S. as the world’s biggest emitter, has set a target to become carbon neutral by 2060.

With a bigger economy, but much smaller population, the U.S. would seek to achieve a 100% clean energy economy and net-zero emissions no later than 2050, Biden has said (should he win office). He wants to enact legislation in the first year of his presidency that establishes an enforcement mechanism to achieve the 2050 goal, including a target no later than the end of his first term in 2025.

Polls put Biden in the lead to beat incumbent Donald Trump, after the latter was hospitalised for the #coronavirus.

(Updated Thursday Oct. 8 to add details of Biden’s climate plan)

Risk of Gap in UN Carbon Markets Persists After Panel Delays Key Decisions

Oct. 6, 2020 — London: The panel overseeing the main United Nations carbon market delayed key decisions that would have overcome a potential gap in the market’s operation at the end of the year.

The Clean Development Mechanism Executive Board considered the implications of the postponement of UN climate talks to November next year because of the coronavirus pandemic, it said in a report detailing the outcome of meetings that took place during the past two weeks in Bonn and virtually.

The panel would further consider at a meeting scheduled through Dec. 14 whether emission credits generated “on or after” Jan. 1 can be approved in the first 10 months of next year, it said.

The market has suffered weak demand for years and now the one-year delay in the global climate talks in Glasgow to November 2021 is causing further complications for the regulators. The impact of the virus means the market may have to halt at least some of its operations. Investors and project developers face rising uncertainty on what will happen to their projects for those months.

The panel did provide some certainty that pre-2021 emission reductions could still be processed.

Audit firms handling requests from emission-reduction projects in the market will continue as “provisionally designated,” until November next year, when further guidance may be provided by the Glasgow talks, it said. Requirements by regulators of the firms “would remain the same.”

“The submission and processing of requests for issuance related to emission reductions or removals achieved before or on 31 December 2020 will continue in accordance with the current CDM requirements.”

See link to meeting report: https://cdm.unfccc.int/filestorage/B/M/A/BMA50YE79VSQIU1GLRWKCJZODNF3P4/CDM_EB107_meeting_report.pdf?t=WUx8cWhyNDQwfDAf-9hPU1s2MPVaVC5pOjM0

See link to earlier story:
https://carrzee.org/looming-deadline-tomorrow-sadly-amounts-to-yet-another-threat-to-global-climate-negotiations/