In this edition, a Bloomberg interview with the Centre for European Policy Studies sheds light on the gap between developed and developing nations’ comfort level with market-based emissions solutions, including multilateral efforts to bolster the business climate for greater investment in clean technologies. Mutual trust and understanding will be an important backdrop, obviously, as developing nations watch developed countries including Canada, the U.S.’s regional emissions markets, Europe’s established position (and it just announcing market backloading approval), and new market entrant China continue dialogue toward an eventual link-up and/or the prospects for a global carbon price. Work toward this end between now and the 2015 Warsaw package agreement, designed to replace the Kyoto Protocol, remains under the watchful eye of policy groups and the individual markets working hard to grow and establish pricing confidence. Importantly, the role of carbon markets in the 2015 agreement, especially as markets spread to multiple continents, is valued if still fully misunderstood, a sentiment concisely captured in today’s Quote of the Day and in the coverage that continues in our Leads section and throughout. Plus, EU ETS gets a confidence boost and Australian Senate rejects first carbon bill, below.

Quote of the Day:

“Some developing countries don’t trust markets, period. Others understand they are a very critical part of the 2015 agreement, but don’t want to prejudge that deal.”

–Andrei Marcu, head of the Centre for European Policy Studies’ carbon market forum in Brussels, in Bloomberg’s Carbon Market Framework Needed to Preserve Investment, CEPS Says”

Lead Stories
Carbon Market Framework Needed to Preserve Investment, CEPS Says
United Nations climate envoys must start coordinating data on how carbon markets cut greenhouse gases, or risk undermining investment in clean technologies, according to the Centre for European Policy Studies.

ETS backloading: carbon market schemes at a turning point
European Parliament Release
Plans to freeze the auctioning of some CO2 permits, so as to raise their price and thus encourage firms to invest in low-carbon innovation, will be put to a final vote on Tuesday, after EU ministers endorsed Parliament’s July 2013 proposal setting stricter conditions for the freeze. The aim is to restore the incentive effect of the Emissions Trading System, which is designed to cut greenhouse gas emissions and tackle climate change.

EU ETS gets a confidence boost as backloading approved
Price of carbon likely to increase by 35% next year to 6 euro/tonne
Point Carbon
Today, the European Parliament cleared the final hurdle of backloading 900 million allowances from the European Emissions Trading Scheme (EU ETS) by adopting the legally-clarifying amendment to the ETS Directive by a large majority, according to Thomson Reuters Point Carbon, the leading provider of market intelligence, news, analysis, forecasting and advisory services for the energy and environmental markets.
“Today’s vote finally confirms that 900 million allowances will be backloaded from the EU’s Emissions Trading Scheme (EU ETS) as of next year, said Hæge Fjellheim, Senior Policy Analyst, Thomson Reuters Point Carbon. “This outcome was largely expected as the Parliament has merely confirmed its position from July but it takes away the last spark of uncertainty” she added.
According to Marcus Ferdinand, Senior Market Analyst with Thomson Reuters Point Carbon, “The positive outcome of the Parliament’s vote removes a large portion of risk and could lead to an increase in EU Allowances (EUAs) prices as it ends a lengthy and cumbersome policy process that has kept the market busy for the past two years. However, prices have been rising in recent days and we could see a short-term ‘buy the rumour sell the fact’ reaction where traders take profit on the anticipated outcome”.
**Link not immediately available

Senate rejects first carbon bill
The Senate has rejected the first of the government’s carbon tax repeal bills with Labor and the Greens combining to vote it down.

We’re underprepared, says China
China is poorly prepared to tackle the impact of climate change that presents a serious threat to the country, thanks to a lack of planning and public awareness, the government said overnight.

World Bank Approves Rules Unlocking $390 Million For Forest Conservation
Ecosystem Marketplace
Less than a month after the United Nations Framework Convention on Climate Change (UNFCCC) approved the seven decisions that comprise the “REDD Rulebook”, the World Bank’s Forest Carbon Partnership Facility (FCPF) today signed off on a new Methodological Framework for its Carbon Fund.

Spain’s New Environment Policy Opens The Door To Conservation Banking
Ecosystem Marketplace
On November 28, Spain’s legislature approved a nationwide bill that is meant to simplify and streamline environmental policy. Included in the legislation is the use of conservation banking for species conservation purposes.

Deutsche Bank quits commodities under regulatory pressure
Deutsche Bank AG pulled the plug on its global commodities trading business on Thursday, cutting 200 jobs as it becomes the first major bank to exit the once lucrative sector due to toughening regulations and diminished profits.

ArcelorMittal-Backed Lobby Warns Against French Green-Energy Tax
A French industry lobby with members including ArcelorMittal (MT), Arkema SA (AKE) and Total SA (FP) said a plan by lawmakers to force energy-intensive producers to pay more tax to fund development of renewable power will hurt competitiveness.


Climate Leadership Conference
Association of Climate Change Officers
February 24-26, 2014
San Diego, CA

Navigating the American Carbon World (NACW) 2014
March 26-28, 2014
San Francisco, California


Carbon credits to fund more projects
Visayan (Philippines) Daily Star
Gov. Alfredo Marañon Jr. yesterday said earnings of Negros Occidental from carbon credits will fund health, education and sustainable livelihood projects in the province.

Making cap-and-trade work: the history and future of a proven program
Contributor blog on
While the merits for slowing climate change will be treated here as a given, the method for doing so looms elusive. In a recent article, I described pricing carbon through carbon taxes and carbon credits as a way to mitigate greenhouse gas emissions and slow global climate change. As there has been some emotive controversy towards both of these, I would like to analyze them more deeply, starting here with carbon credits.
**RKB — Contributor is a Washington, D.C.-based economist.

Natural Gas/Coal/Alternative Fuels

A Marcellus natural-gas bonanza
Philadelphia Inquirer
Cabot Oil & Gas Co., which claimed 15 of the 20 most-productive Marcellus Shale natural-gas wells during the first half of this year, reported more eye-popping numbers Monday for its Susquehanna County operations.

UK proposes double-counting on biofuels to meet EU green targets
Britain has proposed a way to lower the European Union’s 2020 target for renewable energy by counting the contribution from biofuels twice, avoiding the need for billions of euros in investment, a document shows.

Anti-ethanol groups urge Congress to end “harmful” biofuels mandate
Des Moines Register
Food, dairy and environmental groups said Congress needs to move forward with legislation to end a mandate requiring ethanol to be blended into the country’s gasoline supply.


U.S. Solar Gained 35% in Third Quarter Led by Big Plants
Developers installed 930 megawatts of photovoltaic solar capacity in the U.S. during the third quarter and are on pace to almost double that, according to the Solar Energy Industries Association.

China Encourages Power Grid Purchase of Solar to Boost Capacity
China’s government asked power grid companies to buy all the solar energy produced in their coverage areas, providing a possible boost to solar panel makers.

South Korea Targets 29 Percent Nuclear Power Reliance by 2035
Nuclear power will account for 29 percent of South Korea’s power generation capacity in 2035, lower than a 41 percent goal introduced in 2008, according to a draft proposal of the country’s next long-term energy plan.

BlackRock Buys Majority Stake in 68-Megawatt Texas Wind Farm
BlackRock Inc. (BLK), the world’s biggest money manager, bought a majority stake in a 68-megawatt wind farm in Texas developed by closely held OwnEnergy Inc.

Credit Agricole Buys Stake in French Wind Assets From GDF
Credit Agricole Assurances, the insurance unit of the French bank, acquired a 50 percent stake in a portfolio of French wind-energy assets from GDF Suez SA. (GSZ).


Israel, Jordan, Palestinians in Water-Sharing Pilot Plan
Israel, Jordan and the Palestinians signed a memorandum of understanding today that outlines regional water-sharing initiatives from the Red Sea to Dead Sea to relieve shortages in the arid lands, the World Bank said.


OECD: Effective carbon prices (November 4, 2013)

Global 500 Climate Change Report 2013 (Posted September 12, 2013)

The Future of China’s Power Sector (posted August 27, 2013)
Bloomberg New Energy Finance

Sub-national involvement in NAMA development (posted August 7, 2013)
Ecofys’ International Climate Policies Unit

U.S. Energy Sector Vulnerabilities to Climate Change and Extreme Weather (Posted July 14, 2013)
U.S. Dept. of Energy

Turn down the heat: climate extremes, regional impacts, and the case for resilience (Posted June 19, 2013)
World Bank

Four energy policies can keep the 2 Degree C climate goal alive (Posted June 10, 2013)

Maneuvering the Mosaic: State of the Voluntary Carbon Markets 2013 (Posted June 10, 2013)
Ecosystem Marketplace

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