On Monday April 3, 2023, the carbon markets witnessed a historic event. Carbon credits traded on the world’s largest carbon trading platform, Carbon Pulse, reached an all-time high, exceeding previous records. The surge was attributed to several factors, ranging from stricter emissions regulations and rising public awareness of climate change to the adoption of carbon pricing policies by major economies. The unprecedented demand for carbon credits has a ripple effect on the entire economy, influencing corporate strategies, clean energy investment, and government policies. In this article, we will delve deeper into the significance of this rally, its implications for carbon markets, and the future of the global fight against climate change.
Carbon Pulse’s free newsletter, CP Daily, reported on May 2-3’s Carbon Forward Asia conference set to take place in Singapore. It will explore the trends and developments in carbon pricing across the Asia Pacific region, including topics such as carbon border adjustment mechanisms, corporate climate goals, and compliance and voluntary carbon markets. The conference will feature a high-level programme with a lineup of renowned speakers. The agenda of the event is expected to soon be released.
The report also covered the preliminary but incomplete data published by the European Commission on the European Union Emissions Trading System (EU ETS) on Monday. The data revealed that verified emissions from stationary installations in the EU ETS had dipped by 1.2% in 2022, with greenhouse gas output potentially resuming its long-term downtrend in a surprise year-over-year decline that most analysts had not anticipated.
Furthermore, the voluntary carbon credit landscape faced criticism, with green-group experts questioning whether the market was worth saving and pondering what aspects should be maintained or discarded. In the Americas, Virginia’s proposed RGGI repeal regulation has been criticized by environmental groups, who said it is unlikely to stand up to scrutiny. Meanwhile, in Asia Pacific, the government of Australia successfully passed the Safeguard Mechanism reforms, significantly boosting traded volumes of Australian Carbon Credit Units.
In the UK, an update to the green finance strategy was published along with a nature markets framework. The report stated an intention to pilot new and innovative finance opportunities, which might include biodiversity crediting, to encourage a positive climate and biodiversity outcomes. The UK Infrastructure Bank (UKIB) announced its first £12-million investment into a major nature restoration project in Scotland amid plans to grow its role in markets that support conservation and positive climate outcomes.
In addition, Carbon Pulse published a report on carbon offsets, in which Ed Mitchard, chief scientist at UK-headquartered nature tech firm Space Intelligence, argued that carbon offsets were not the solution to climate change but were essential in the short and medium term. They could take out damaging carbon dioxide emissions that could not be reduced by other means and have a valuable role as a part of any government or country’s road to net-zero plans.
The news also covered several policy splits among major coalitions of financial firms, including Danish pension fund AkademikerPension, which may leave the UN-backed Net Zero Asset Owner Alliance because it believes the position paper for its 85 members does not attach enough strings to owning the shares and bonds of publicly listed oil and gas companies.
On the other hand, Germany plans to require the public and private sectors to reduce their energy consumption by 26.5% by 2030 compared to 2008. The draft law also sets reduction targets of 39% by 2040 and 45% by 2045. Finland’s main conservative party claimed victory in a parliamentary election, indicating a more traditional shift in climate policy for the country than its previous government aimed for. Italy’s €450m scheme to support the production of renewable hydrogen was approved by the European Commission in a bid to expedite the country’s transition to cleaner energy.
Carbon Pulse also included a list of job opportunities in the carbon and climate sectors and provided bite-sized updates from around the world.
