Is A Regulatory War Brewing In Washington?

October 29, 2022

Is A Regulatory War Brewing In Washington?

One country hosts the largest carbon credits auction while another one calls to regulate the market.

One country finds it just to place a carbon tax on cow's emissions. And a large British bank decides to stop backing up fossil fuel projects. 

It’s a busy week in the global carbon market, so let’s jump in.

The Senators' Plea

U.S. Lawmakers are drawing regulatory attention to the Voluntary Carbon Market (VCM).

Several leading lawmakers, including Sen. Elizabeth Warren, have asked the Commodity Futures Trading Commission (CFTC) to regulate some of the registry and verification programs used in the VCM.

In theory, this will allow the CFTC to ensure a higher all-around quality of offsets.

Whether that theory becomes reality remains to be seen.

The Largest Carbon Credits Auction Ever 

Who would have thought that the biggest oil exporter region in the world will also hold the largest carbon credits auction ever? Saudi Arabia and other Gulf Arab states have been bolstering their green agendas recently.

Saudi's Public Investment Fund (PIF) auctioned off 1.4 million tons of CORSIA-compliant carbon credits. And you can guess who buys the most of those credits - Saudi Aramco.

Terms of the sale were not disclosed, and the sale was part of another attempt by PIF to back Saudi Arabia's green journey.

The Bank Is Closed

Lloyds Bank of Britain will no longer directly fund new fossil fuel ventures. The move isn’t entirely unprecedented but is still considered a radical shift for a major financial institution. 

The new policy brings Britain’s largest bank in line with stated net-zero goals for the country. Will it signal a new trend for major national banks, or be a mere curiosity? Time will tell.

Putting a Price on Meat

Livestock emissions have been the talk of the town lately and taxing cow "emissions" is starting to get some traction.

Livestock production is responsible for over 16% of global GHG emissions, and the climate cost is not priced in the already high cost of meat.

Now, New Zealand is considering joining the ranks of countries that want to begin pricing in animal emissions. The primary method under consideration is a levy on farmers for GHG emissions from their herds.

Carbon Fact of the Week

Methane (CH4) sits just behind carbon dioxide (CO2) on the list of most-significant greenhouse gasses, in part because it only lingers in the atmosphere for roughly a decade. But taken by itself, it’s even more potent than CO2. 

Over the past two centuries, methane levels in the atmosphere have increased by roughly 143%.

In the US, 20% of total methane emissions from agriculture come from enteric (microbial) sources - in other words, cows passing wind.

Source: https://carboncredits.com/