Brazil weighs carbon market law ahead of COP26

Spanish Market: Emissions
23/09/21

Brazilian lawmakers are rushing to approve new carbon market legislation to avoid going empty-handed to COP26 climate talks in Glasgow in November.

Congressmen in Brasilia held public hearings on 17 September to advance a bill under consideration in the lower house that would create and regulate a national carbon market.

Local industry and agriculture have been pressuring lawmakers to improve Brazil's international image on the climate front for fear of retribution in the form of trade restrictions on Brazilian exports.

The country has drawn heavy criticism for a surge in Amazon deforestation and a presidential response seen as tepid at best, chilling diplomatic relations with countries in North America, Europe and Asia. Speaking at the UN General Assembly yesterday, President Jair Bolsonaro said that Brazil has preserved 84pc of its forests, and claimed that the country has the world's most comprehensive environmental legislation.

Under the current legislative proposal, Brazil would have a voluntary carbon market for the first five years and would slowly adopt decarbonization targets for specific segments of the economy over that period. The bill also aims to monetize standing forests by issuing credits for environmental preservation.

Roughly half of Brazil's greenhouse gas emissions come from deforestation, according to a recent study presented by former Brazilian finance minister Joaquim Levy.

"For Brazil to cut emissions significantly, it has to reduce deforestation," Levy said in a recent webcast, adding that on nearly all other fronts, Brazil is far ahead of the rest of the world toward decarbonizing its economy.

Brazil's leading industry association CNI favors the establishment of a domestic regulated carbon market as the next step toward meeting the country's pledge established after the 2015 Paris climate talks. Brazil set a goal of reducing its CO2 emissions by 43pc from 2005 levels by 2030.

In a study commissioned by the International Chamber of Commerce, Latin American sustainability consultants WayCarbon estimated that Brazil could generate up to $100bn in carbon credits by 2030, equivalent to the removal of 1bn tons of CO2 equivalent over the next decade from the agriculture, forestry and energy sectors.

The author of the carbon market bill, Amazonas state congressman Marcelo Ramos, says he hopes the legislation will pass by November to show the world that the Brazilian legislature is concerned about climate change. Opposition to the bill is expected to be limited, as the legislation already has solid support from the business community.

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17/11/24

Trump taps oil services head as US energy secretary

Washington, 17 November (Argus) — President-elect Donald Trump intends to nominate oil services company Liberty Energy's chief executive Chris Wright to lead the US Department of Energy (DOE), giving him oversight over LNG export facilities and a vast portfolio of federally-backed energy projects. Wright also will serve on Trump's planned Council of National Energy, which will oversee policies across the federal government affecting energy production, permitting, transportation and regulation. Trump said he wants Wright to work alongside North Dakota governor Doug Burgum, who Trump has nominated as US interior secretary, to oversee "the path to US ENERGY DOMINANCE" by cutting regulations and supporting investments from the private sector. "As Secretary of Energy, Chris will be a key leader, driving innovation, cutting red tape, and ushering in a new 'Golden Age of American Prosperity and Global Peace,'" Trump said. Liberty Energy, which was founded in 2011, focuses on hydraulic fracturing services and earned $1.2bn last year. Wright has downplayed the urgency for the world to address climate change or transition away from fossil fuels. He has criticized the use of phrases like "climate crisis" and "carbon pollution", which he says are impeding projects that could alleviate energy poverty. Those terms "are not only deceptive, they are in fact destructive deceptions," Wright said in a video he posted last year on YouTube. "Destructive because they drive centrist politicians and regulators to oppose life-critical infrastructure, like building pipelines and natural gas export terminals." If confirmed by the US Senate, Wright would be responsible for deciding how to resolve a "pause" on US LNG export licensing that President Joe Biden put in place in January. DOE has been studying whether allowing more gas exports would exacerbate climate change or hurt consumers by increasing domestic natural gas prices. The vast majority of DOE's budget goes to maintaining the US stockpile of nuclear weapons and cleaning up contaminated nuclear sites. DOE also manages the four facilities that make up the US Strategic Petroleum Reserve, which currently holds 387.8mn bl of crude, and oversees 17 national laboratories that are spread across the US. In the last four years, the US Congress substantially increased DOE's role in energy. DOE is currently managing billions of dollars in funds provided by the 2021 infrastructure law, such as an $8bn initiative meant to support "hydrogen hubs" and a $2.5bn carbon capture demonstration program. The Inflation Reduction Act expanded DOE authority to issue loans for clean energy projects by about $100bn. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: US house delegation insists diverse energy mix

16/11/24

Cop: US house delegation insists diverse energy mix

Baku, 16 November (Argus) — A diverse energy portfolio is needed to meet the world's growing demand and US energy security, a bipartisan delegation from the US House of Representatives' energy committee led by August Pfluger (R-Texas) said on Saturday at the UN Cop 29 summit in Baku, Azerbaijan. August Pfluger (R-Texas) said that the needed energy portfolio includes LNG, hydropower, nuclear, clean coal and fusion among other energy sources. Aside from hydropower, the delegation did not mention any other forms of renewable energy. "We believe that we're in an energy expansion, that the needs of the world are going to continue to include increased supply," he said. Asked whether the committee would try and influence US president-elect Donald Trump's decision to pull out from the Paris Agreement, Pfluger said that the recent US election results "spoke loud and clear about wanting to lower inflation and energy is the foundation of that." "If an agreement is going to hurt. If something is going to actually decrease our ability to do that, then we want to look at that but that's for the President to say," he added. LNG Plfuger in February sponsored a bill to eliminate federal licensing on new LNG projects, in response to US president Joe Biden's temporary pause on the review of new export facilities. He commented on the European Commission president Ursula von der Leyen mentioning in November that the EU could boost US LNG deliveries as a means to avoid US tariffs. "I think that's what we've been saying for four years. We have a solution. Let's compete with Russia. The life cycle emissions [in the US] are much better," Pfluger said, adding that the US is a reliable partner achieving its climate goals. Pfluger concluded that such an agreement will hugely benefit the Nato relationship too. The commission cannot oblige firms to buy LNG from the US. There is for now no ban on Russian LNG, and all member states would need to agree for such a ban to be imposed. Former European Central Bank president Mario Draghi in September proposed creating a new entity to perform joint purchases on the global markets in a report on EU competitiveness. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: US democrats flag looming Chinese climate lead

16/11/24

Cop: US democrats flag looming Chinese climate lead

Baku, 16 November (Argus) — US democrat senators emphasised the need for the country to push forward in its climate ambitions, especially given China's position as an energy transition transition leader. China has a plan, US senator Ed Markey (D-Massachusetts) warned, pointing to the country's ambitions in renewables, electric vehicles and batteries. "If they have a plan and we do not have a plan, we will lose," he said, adding that US president-elect Donald Trump "does not have a plan". "We will lose markets around the planet, we will lose the cutting-edge technological breakthroughs that otherwise would have been incentivised here in the US," Markey said. US senator Sheldon Whitehouse (D-Rhode Island) echoed this sentiment. "If we don't keep moving forward, other countries will eat our lunch," he said. But the two senators are holding out hope that not all is lost in the race to be an energy transition leader, despite the incoming Trump presidency. "An enormous amount of the climate work that's being done in the US is being done at the state and municipal level," Whitehouse said, adding that a lot can get done "irrespective of who the president is". Whitehouse also noted that the EU's carbon border adjustment mechanism (CBAM) creates an emission-based tariff that will "[fall] much more heavily" on Chinese products because of China's emissions, which will help to incentivise manufacturing and jobs to move to the US. There are also bipartisan carbon tariff conversations happening, he added, emphasising that there are plenty of opportunities for progress around carbon tariffs. "If the US has a plan and China has a plan, we will win," Markey said. "But you have to have a plan," he said, adding that the Inflation Reduction Act (IRA) is one of such plans. Markey also believes that Donald Trump is "in for a rude awakening" should he try to repeal the IRA. Trump will learn a lot about "how many Republican congressmen want to have stuff made in America," he added. US climate advisor John Podesta also noted that Trump will face opposition even from Republican-led districts earlier this week. Around 57pc of new clean energy jobs created since the IRA are in congressional districts represented by republicans, he said. "Support for clean energy has become bipartisan, many republicans especially governors know all this activity is a good thing for their districts, states and for their economies." By Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Parties continue slow work on finance goal: Update

16/11/24

Cop: Parties continue slow work on finance goal: Update

Updates throughout Baku, 16 November (Argus) — Parties at the UN Cop 29 climate talks in Baku have asked for more time to work on "specific proposals" for a new finance goal, working from a draft text released yesterday , but it is unlikely to yield progress on key sticking points. Country representatives are seeking to agree on a new climate finance goal for developing nations, following on from the current — broadly recognised as inadequate — $100bn/yr target. A plenary is due to take place later today in Baku. "Over the last few days some people have doubted whether collectively we can deliver. It is time for the negotiators to start proving them wrong," Cop 29 deputy lead negotiator Samir Bejanov said. The current draft text still fails to bridge the huge divide between developed and developing countries on key issues such as an amount for the goal, the contributor base and what the funds should be used for. And the new version due to come out today is unlikely to show meaningful progress on these issues, observers suggested, leaving them for ministers to tackle next week. Technical negotiators continue to try and move forward on topics such as funds' access and transparency. Developed countries have still not proposed a number for the goal, and want the contributor base broadened. Developing countries remain broadly united in calling for climate public finance of over $1 trillion/yr. Options show that developing country parties seek a new finance goal that serves mitigation — actions to reduce emissions — adaptation and loss and damage. Adaptation refers to adjustments to avoid global warming effects where possible, while loss and damage describes the unavoidable and irreversible effects of such change. Developed nations are also pushing for sub-targets of $220bn/yr for least developed countries (LDCs) and $39bn/yr for small island developing states (Sids), in which money for adaptation should come in the form of grants and highly concessional finance and funding for loss and damage "primarily in grants". Multi-layered The multi-layered approach in the draft, mostly supported by developed countries, does not mention loss and damage. On broadening the contributor base, it has options calling on "parties in a position to contribute" or "all capable parties" to "mobilise jointly $100bn/yr for mitigation and adaptation in developing countries by 2035". The UN climate body the UNFCCC works from a list of developed and developing countries from 1992 — delineating 24 countries plus the EU as developed — and many of these note that economic circumstances have changed in some countries, including China, over the past 32 years. China between 2013 and 2022 provided and mobilised $45bn in climate finance to developing countries, equivalent to 6.1pc of climate finance provided by all developed countries in the period, according to think-tank WRI. A few options in the multi-layered approach in the draft talk about "investments", language that developing countries do not support, and "investing trillions "from all sources, public, private, domestic and international". Developing nations are not against private sector financing, but they want the main figure for the new finance goal to come from public sources, observers said. Some parties on both sides are calling for an acceleration of the reforms of multilateral development banks, key to leverage billions in private sector finance, as well as for the use of taxes and levies. But these issues are largely outside of the remit of the Cop, even though they may get a boost from the upcoming G20 leaders summit on 18-19 November. UN climate body chief Simon Stiell today called on G20 to ensure the availability of more grant and concessional finance, make progress on debt relief, and push for additional multilateral development bank reforms. Brazil is looking to use its G20 presidency to advance agreement on energy transition finance, having set fighting climate change as one of its priorities. The country called for a global finance governance that includes rules for financing a "just and equitable" energy transition in developing economies and for an easier access to climate funds. Brazil has also pushing for a 2pc tax on billionaires that could generate up to $250 bn/yr in revenue. By Victoria Hatherick, Jacqueline Echevarria and Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: China keeps focus on south-south cooperation

16/11/24

Cop: China keeps focus on south-south cooperation

Baku, 16 November (Argus) — China said that expanding the contributor base for the new finance goal under discussion at the summit will not "solve the problem", while showcasing its efforts for "south-south" — developing countries — co-operation at the UN Cop 29 climate summit. China has signed 53 climate co-operation initial agreements with other developing countries and implemented more than 300 climate-related capacity building projects, China's environment and ecology minister (MEE) Huang Run Qiu said at a Cop 29 event on 15 November. He did not provide a timeline. China also launched a Zero-Carbon Island co-operation initiative during the summit. Chinese vice premier Ding Xuexiang pointed out at the Cop 29 leaders summit that the country "provided and mobilised" more than 177bn yuan ($24.5bn) of project funds to support other developing countries' climate responses since 2016, Ding said on 13 November. Think-tank WRI research found that China provided $45bn in climate finance to developing countries between 2013-22, equivalent to 6.1pc of climate finance provided by all developed countries in the period. Ding expressed China's willingness to work with "all parties" to meet climate goals, but the country has also made clear that the onus is on developed countries to finance the new climate finance goal. Developed countries agreed in 2009 to deliver $100bn/yr in climate finance to developing nations, and Cop 29 is focused on the next iteration of this — the new collective quantified goal (NCQG). Developed nations are calling for more contributors for the goal, including from developing countries in a position to contribute, such as China. The UN climate body the UNFCCC works from a list of developed and developing countries from 1992 — delineating 24 countries plus the EU as developed — and many of these note that economic circumstances have changed over the past 32 years. But China believes that it is for developed countries to "take the lead" in mobilising financial resources, encouraging others to "voluntarily" provide such support, it said during a ministerial dialogue on finance. Discussions on expanding contributors for the goal will "only lead to further controversies" without solving the problem, with China viewing mutual support between the NCQG and south-south co-operation as "the ideal scenario". Others have lauded China's south-south co-operation efforts. The south-south model "represents a powerful framework that has repeatedly shown the impact of developing nations working together to achieve sustained development," said United Nations Office for Project Services (Unops) executive director Jorge Moreira da Silva. Cop 29 chief executive Elnur Soltanov also described China as "one of the locomotives of green transition in the world". UN climate body UNFCCC executive secretary Simon Stiell emphasised the importance of multilateralism and international co-operation, and stated that the world will "need China's continued leadership". He warned against a "two-speed transition, because winners and losers still share the same atmosphere". Stiell also noted that a strong NDC — country climate plan — would "send an important signal to other countries that stronger targets drive investment". China has yet to submit its new NDC with updated 2035 targets — due by February next year. But Ding said that it will be "economy-wide" and "cover all greenhouse gases", while continuing to strive to achieve carbon neutrality before 2060. By Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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