Navigating the American Carbon World Conference, San Francisco April 20
I was fortunate enough to take part in two panel discussions at NACW (Navigating American Carbon World — go to nacwconference.com )in San Francisco last month. The first was on the state of global climate finance and the second on carbon offset invalidation risks. NAWC is the key conference for understanding what is happening in the north American carbon markets. It’s hosted by Climate Action Reserve who are the leading Registry for offsets in the Americas. (It also helped that it was in the beautiful city of San Francisco.) It’s the event’s 15th consecutive year and brings together the most influential and dynamic contributors to North American climate policy and carbon markets. This year’s focus was on international and domestic climate policy, carbon markets and green investments.
Needless to say, there was a lot of anti-Trump rhetoric. Fortunately California’s cap and trade market is a state level initiative so not something Trump can interfere with. However, he could still have an impact on how this market grows by linking with other states by the repealing of the Clean Power Plan (CPP), an executive order by Obama. The CPP which was to encourage other states to take action on climate change allowing them to select their own policies and path ways. Carbon markets are viewed as an important part of that jigsaw which will eventually coalesce with California in the future to increase market size and efficiency.
It was good to see strong representation from Canada, including Glen Murray, the enthusiastic and highly informed Minister for the Environment and Climate Change for Ontario, as well as his federal level counter-part Catherine McKenna, Minister for Environment and Climate Change, Canada. Ontario is on course to link with California along with Quebec which already linked.
There was an excellent speech by Hon Betty Yee, California State Controller (equivalent to the CFO for California). She clearly understood the issues, both from the financial and political perspective and it was great to see someone in a CFO role being so committed at a strategic level to cap and trade and climate action in the state. (You can see her speech here.)
Governor Gerry Brown also made a characteristically entertaining and inspiring speech on climate action and commitment to cap and trade, whilst joking he had to look up what cap and trade was on Wikipedia on the way to the event!(See his speech here.)
Interestingly, Hon Kevin De Leon who is the California state senate president pro tem made a strong speech in favour of climate action (see it here). He somewhat undid this when two weeks later he tabled Senate Bill 775 (SB775) for post-2020 climate action. He supported cap and trade but in a rather contrived way and without any provision for use of offsets. His proposal has garnered a lot of negative comment with people recognising the importance of offsets as part of the cost containment mechanism. Indeed by some calculations if the bill was passed and there was no opportunity to use offsets, the cost of carbon for state natural gas providers would be as much as the natural gas itself! In my view Sen. De Leon is mixing up environmental justice with social justice — his cause célèbre.
Fortunately there are other bills on the table including Assembly Bills 378 & 151 as well as the one proposed by the Air Resource Board. I hope the ARB proposal carries. They’ve done a good job to date in extremely difficult circumstances. Hats off to Mary Nichols who’s speach can also been seen here. What the final post-2020 cap and trade regime will look like remains to be seen but Gov. Brown has his work cut out. Offsets should remain a part of that.