Calls for Carbon Market Regulation Grow Amid Climate Disasters

With the 29th “Conference of the Parties” - (COP29, the global climate confab) - just around the corner, countries are planning to leverage the event to revive the beleaguered Voluntary Carbon Market (VCM). 

Consensus is building that the VCM must be regulated at the national and international levels to ensure carbon credits actually do what they claim to. 

As the punishments for malfeasance in the VCM get more serious, the call for more regulation is growing. Andrew Steer, CEO of the Bezos Earth Fund, an environmental charity, said, “It's now time to get truly professional and regulated in the best sense."

Thankfully, there is work being done to do just that. Last month, the Commodity Futures Trading Commission (CFTC) (one of the groups involved in prosecuting C-Quest Capital) released new guidelines for trading derivative contracts in the US to reduce price manipulation, following a May release from the Biden administration on principles for a high-integrity VCM. The guidelines and principles are part of a broader plan from Treasury Secretary Janet Yellen and the Biden administration to bring more integrity to the VCM, which they plan to pitch internationally at COP29 next month. 

The plan involves using the carbon offset market to mobilize private financing for developing nations to help them mitigate and adapt to climate change. Curtis Ravenel of the Glasgow Financial Alliance for Net Zero (GFANZ) said, “Getting money into emerging economies is very difficult. But if done the right way, a high-integrity carbon credit could help catalyze further deployment.”

Hurricane Milton Reaps Devastation

Weather Broadcaster John Morales Chokes Up Describing Hurricane Milton

Getting the VCM and other decarbonization tools right has never been more important. The unprecedented warm waters in the Gulf of Mexico lead to rapidly intensifying hurricanes, leaving little time for evacuations. In the case of Hurricane Milton, which made landfall in Florida on Wednesday night, it intensified from a Category 1 storm to a Category 5 hurricane in less than 12 hours. And it didn’t stop there. By 8 p.m. on Monday, the storm’s maximum sustained wind speeds had increased to 180 miles per hour, making Milton one of the strongest Atlantic hurricanes ever.

I am stunned by how quickly this storm has intensified,” said Rachel Cleetus of the Union of Concerned Scientists. “This is the unmistakable fingerprints of climate change that we are seeing here.” Scientists are increasingly worried about compounding disasters, with Floridians still reeling from Hurricane Helene just two weeks ago, giving them little time or resources to prepare for Milton. 

Attribution studies from World Weather Attribution and Climate Central have already linked the extremes of both storms to climate change. Climate Central said climate change made the rapid intensification of Milton at least 400 times more likely and World Weather Attribution claimed climate change made Helene two and a half times more likely and increased its precipitation by at least 10%. 

Global Weirding

Hurricanes are just the tip of the (melting) iceberg in the ways that global warming, or what scientists are increasingly calling “global weirding,” is impacting communities and ecology. Just this week, we saw extremely rare floods in the Sahara, the Amazon River fell to its lowest levels ever, and a new WMO report, the “State of Global Water Resources 2023,” revealed that global water systems are under severe stress.

As this NYT article shows, it is not just the warming climate contributing to these issues. In the case of the Amazon drought, widespread deforestation has led to reduced precipitation. This points to something that governments have been slow to understand: all environmental issues are linked, and any environmental degradation will have some sort of unforeseen circumstance in the long run. These issues will be central to the discussion at the UN Biodiversity Conference (COP16) in Colombia next week.

Canada To Introduce Mandatory Climate Disclosures

“US Must Avoid EuroSclerosis”

Mario Draghi, author of the EU’s Competitiveness report Simon Wohlfahrt/Bloomberg

In an op-ed from Suzanne Clark, chief executive of the US Chamber of Commerce (the group suing the SEC and California Rule over climate disclosure policies), she claims that the US must avoid overregulating to steer away from the economic stagnation the EU has suffered. She used Mario Draghi’s recent report, “The Future of EU Competitiveness,” to claim that overregulation has killed EU growth.

However, it is very unlikely that the EU will change its regulations for US companies. Whether ESG or any other issue, the EU has long maintained that companies doing business in its markets must apply its standards. To do otherwise would disadvantage its domestic industries. 

Energy Emissions To Peak This Year

A new International Energy Association (IEA) report finds that we won't meet the goal of tripling renewable energy but will come close, resulting in a whopping 50% share of renewables by 2030. Another report from a Norwegian risk analysis firm, DNV, revealed that emissions from energy will peak this year and steadily decline thereafter.  Unfortunately, that rate of decline will still lock in a temperature rise of 2.2°C by 2100.

The views expressed on this website/weblog are mine alone and do not necessarily reflect the views of my employer. 

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