Ontario’s Premier Doug Ford has indicated he will cancel the province’s cap-and-trade system and challenge federal authority to impose carbon tax.
Carbon pricing initiatives and debates resume in the US.
Ministers at the Petersberg Climate Dialogue emphasize the use of green bonds, carbon pricing and de-risking instruments as well as the need to reassess subsidies.
EU Member States are considering introducing carbon price measures, such as EU-wide or national carbon pricing floors.
26 June 2018: In the month of June, national and sub-national news on carbon markets and pricing were mixed with the Canadian province of Ontario announcing its intention to cancel existing carbon pricing policies, while New Zealand and the US state of Massachusetts pushed ahead with new initiatives and discussions on carbon pricing floors continued in the EU.
National and Sub-National Developments on Carbon Markets and Pricing
In Canada, Ontario’s incoming Premier Doug Ford issued a statement underlining his determination to cancel the province’s cap-and-trade system and to challenge the federal government’s authority to impose a carbon tax on Ontario. He also announced that Ontario would be serving notice of its withdrawal from the joint agreement linking Ontario, Quebec and California’s cap-and-trade markets. [Ontario Government Office Press Release]
The Government of New Zealand published a discussion document “Our Climate Your Say: Consultation on the Zero Carbon Bill” to raise public awareness and engage public participation in its policy development. It invites public views on net zero targets, such as: net zero carbon dioxide by 2050; net zero long-lived gases and stabilized short-lived gases by 2050; and net zero emissions by 2050. [New Zealand Government Discussion Document]
In the United States, the Massachusetts State Senate passed the ‘Act to Promote a Clean Energy Future,’ which includes carbon pricing provisions. If passed, this would make Massachusetts the first US state to establish a price on carbon. Also in June, former Senators John Breaux and Trent Lott launched a bipartisan ‘Americans for Carbon Dividends’ campaign in support of a plan proposed by the Climate Leadership Council to set a price of US$40 per ton of carbon pollution. [Massachusetts Senate Announcement] [Climate X Change News] [Americans for Carbon Dividends]
Sharing National Experiences
The Ninth Petersberg Climate Dialogue was held from 18-19 June 2018 in Berlin, Germany under the theme ‘Changing Together for a Just Transition.’ Ministers from 35 countries shared their experience with climate change policy options and actions, ranging from putting a price on carbon, to creating enabling environments, enshrining targets into laws, designing long term strategies and engaging stakeholders. They emphasized the need to further develop and improve the use of various financial tools such as green bonds, carbon pricing, and de-risking instruments as well as reassessment of subsidies. [Petersberg Climate Dialogue IX Co-chairs’ conclusions]
EU Debate on Carbon Pricing Floors
In Europe, the debate around measures to enhance emissions trading schemes continues. The EU ETS has often been criticized because average prices are considered to too low to provide an incentive for additional investment in mitigation action. Some EU Member States are considering introducing additional measures, such as an EU-wide or national carbon pricing floors (CPFs) that would guarantee a minimum price on carbon emissions for all market participants. Diverging views exist however, whether CPFs are useful, or whether they create new risks, such as market distortions or barriers to linking with ETS in other countries. Germany and France now proposed, in a joint Declaration on further cooperation in Europe, to develop an EU strategy 2050 for the long-term transformation towards carbon neutrality. The countries propose a high-level ministerial working group on climate change to build a common view on the energy transition as well as tools for triggering sustainable finance and economic incentives, including carbon pricing issues, such as CPFs. [Meseberg Declaration on further cooperation in Europe][SDG Knowledge Hub Policy Brief: Carbon Floor Pricing: Can Discourse Improve Carbon Markets?]
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The SDG Knowledge Hub publishes monthly climate finance updates, which largely focus on multilateral financing and cover, inter alia, mitigation and adaptation project financing news and lessons, institutional events and news, and latest developments in carbon markets and pricing. Past climate finance updates can be found under the tags: Finance Update: Climate Change; and Finance Update: Sustainable Energy.