CEEZER’s Post

We often hear skepticism about the lack of government backing in the #VCM. Sadly, my answer is mostly that many government-endorsed schemes are not necessarily better, and can even be worse. From tender requests (we did not answer), I know more than a few government agencies across Europe covering their emissions with the highest-risk, lowest impact credit categories. Yesterday, ZDF's Frontal published a piece about how projects approved by Umweltbundesamt to fulfil compliance targets in the compliance market might be a fraught. Unlikely a surprise to people in the carbon markets (just think of UN-Kyoto approved CDM credits for overhauling ship coating to reduce diesel emissions from water friction). While we always welcome scrutiny in the VCM and much remains to be done, it's equally important to keep eyes open on the compliance side. Government voices count - and they have a responsibility like anyone else to leverage data and digital technology to stay ahead of the curve. While this may be harder for policy makers, we can surely collaborate more on data and risk to help guide policies. We'd be happy to provide what we can! Read more details - and what voluntary credit buyers can learn from that - in CEEZER's blog post below. PS: While I am at it, Foundation Development and Climate Alliance is another example of quasi-public endorsement of some of the riskiest credit categories in the market when it comes to climate impact. ETH Zürich and others published great research on the risks in traditional avoidance credits, that remain front and center on their website. It's time to step up the game!

Nearly 80% of institutional investors consider climate risk to be at least as important as financial disclosure. Yet following the SEC's release of long-expected corporate climate reporting requirements, 19 states have filed suit to overturn the decision. In the meantime, mainland China is pushing for requirements that are even stricter in some areas, helping to harden its financial system against climate risk and attract international investment for the race to lead the low-carbon economy.

Carbon pricing: governments make polluters pay for Climate Change 🌍💰 Authored by Andrew Reid - Institute for Energy Economics and Financial Analysis (IEEFA) - the paper delves into how following the ‘polluter pays principle’, carbon pricing must become a key instrument in the fight against climate change. 🛡️♻️ Carbon pricing currently applies to about 25% of global emissions, generating over $500 billion, however, global carbon pricing receipts were only 1% of the economic cost of climate change in 2022. With more jurisdictions adopting these schemes, the financial impact on polluters is expected to rise significantly. ⚖️📈 The paper finds that the European Union’s Carbon Border Adjustment Mechanism (#CBAM) is set to influence global trade and might push the adoption of carbon pricing in other regions. Which other drivers could be used to increase carbon pricing use? 💬 #CarbonPricing #ETS #NetZero #Environmentalpolicy

Thousands of international companies may still have to meet the higher bar for climate risk information set by Europe, despite the lighter rules of the US Securities and Exchange Commission. Founder of the Carbon Tracker think-tank, Mark Campanale, warns that American corporations wanting to operate in Europe will have to comply with regulations around disclosure and reporting that they have been lobbying against in the US. These companies now face a difficult decision of whether trading in the EU is worth the extra regulatory burden. Europe may have an impressive regulatory regime around climate and carbon, but losing industrial base, listings, or capital to the US due to regulatory arbitrage is a real concern. To read more-👇

Are financial markets fit for 55? 🌱 Last week, I had the pleasure of discussing the role of financial institutions in realizing EU climate targets together with John Hassler and Kjerstin Braathen during our DNB Nordic Credit Conference in Stockholm. 🏛️ With the European climate law, EU is committed to reducing net greenhouse gas emissions by 55% by 2030. Reading John’s recent report on how Swedish climate policy could be developed to support EU ambitions, I am encouraged by his view that an orderly transition to carbon neutrality by mid-century is not only possible but also achievable at relatively low cost. At least compared to what the cost will be if we wait. Time is certainly of the essence, and it is very clear that politics and business must work together to create action. 🌍 In DNB, we recently launched our first #TransitionPlan which serves as our roadmap towards our 2050 net zero target with interim 2030 targets for 70% of our financed emissions. To get there, we need to work together with our clients - guiding, supporting and incentivising them to accelerate their sustainability journeys. Because in the end, if they do not reach their emissions reduction targets, neither will we. (PS 👉 If you haven't yet read Hassler’s report, I can recommend it. Irrespective of political views, it provides an educational overview of EU ambitions as well as current obstacles for realising climate targets.)

Politics matters for carbon markets: This work by Hanna Niczyporuk utilizes firm-specific lobbying, carbon intensity, and financial data for the population of the EU ETS firms during 2013-2017, and investigates the determinants of the political action of firms and their support for the EU ETS. The study hypothesizes that the two decisions depend on the cost considerations and on the competitive dynamics. Large firms with higher carbon intensities, that face greater regulatory costs, are more likely to lobby on the EU ETS. Furthermore, firms that may gain a competitive advantage due to regulation, that is firms with lower carbon intensities that operate in concentrated markets, will be more likely to lobby in favor of the EU ETS. https://lnkd.in/gu8Y_95b

“Instead of encouraging corporations to do what they can do, we’re demonizing them for doing that. And that is the irony of essentially what has happened in carbon markets 2.0.” This morning HFW Partner, Peter Zaman, joins David Greely on our 2024 Summer Playlist to cover the current state of play in today's #carbonmarkets. During the episode, the two discuss what: - This week's #SBTi statements - The uncertainties facing #CORSIA participants and, - The EU’s new methane regulation tell us about how the disputes over the "right" approach to addressing #carbon emissions are having practical consequences on our ability to make meaningful progress – and what we need to be doing next. Listen Now! https://lnkd.in/ed7HHVZf

The SEC's new climate disclosure rules are caught in a ferocious debate, with Republican lawsuits to overturn them and greens pushing for stronger standards. But after spending 18 months analyzing Chinese corporate climate disclosures with Erica Downs and Yushan Lou at Center on Global Energy Policy, it's remarkable to see this debate unfold with *no* reference to what’s happening in China–our major strategic competitor, and our biggest rival in the battle to lead the low-carbon economy. We've tried to fix this gap with our latest in Fortune. Climate disclosures are an area of competitive advantage for our financial sector, but China is making a surprising push to close that gap. The SEC's new standard helps preserve our advantage and stay aligned with what's becoming the new norm of global financial regulation on sustainability. https://lnkd.in/ev9qeuy8

"The EU wanted rules that put carbon offsets in line with the high standards set by the 27-member bloc's own emissions trading system, three negotiators and observers who were closely following the talks told Reuters. While the EU system does not use offsets, it effectively sets carbon prices by granting companies permission to emit. The price for emitting one metric ton of carbon surged above 100 euros in the EU system earlier this year and is now trading at around 70 euros" #fair #carbon #pricing #ets From Voluntary Carbon Market to Verified Carbon Mechanism. Europe, just by accepting CCPs (Core Carbon Principles) as verified carbon for CBAM certificates. You would launch mitigation projects in diffuse sectors complementary to the ETS. The Integrity Council for the Voluntary Carbon Market (ICVCM) International Chamber of Commerce Carbon Pricing Principles

Is VCM any good? Are compliance markets helpful? Compared to what? That's always the relevant question. Today our host, Radhika Moolgavkar, JD, Nori's VP of Supply and Methodology, is joined by our regular policy panel, Wil Burns & Holly Jean Buck, to analyze the trade-offs of European and American market-based climate policy. Listen in to understand the different policy approaches of the EU and US, and what the future might hold for climate policy. https://lnkd.in/gwphBKRn