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Do international carbon credits combat climate change?
The European Commission proposed a climate goal for 2040, which allows countries to use carbon credits purchased from developing nations in order to reach the EU target for the first ever. What does that mean? And why did the EU's move on Wednesday cause some criticism among scientists and campaigners? What are carbon credits? Carbon credits or offsets are projects that fund projects abroad to reduce CO2 emissions in lieu of reducing your own greenhouse gas emission. For example, converting petrol buses in a city to electric or restoring forests in Brazil are examples. The buyer can use the "credits" to reach its climate goals, while the seller receives funding for their green project. The system, according to its supporters, provides much-needed funds for developing countries' efforts to reduce CO2 emissions and allows them to work together with other countries in order cut emissions globally. The reputation of CO2 credit has been damaged by a series of scandals where projects that generated credits failed to provide the benefits claimed for climate change. Why is the EU buying them? Carbon credits purchased from other countries could cover up to three percentage points of the EU 2040 target, which is to reduce net emissions by 90 percent from 1990 levels. In order to achieve the EU's climate goals, countries must reduce their emissions completely at home. Last year, the EU's executive commission said it hoped that the EU would agree on a 90 percent reduction in emissions by 2040. Carbon credits were not mentioned. Since then, the geopolitical turmoil and economic struggles of European industries has fueled political resistance. Governments from Germany to Poland have demanded a softer goal. The Commission responded by saying it would introduce flexibility and chose carbon credits to achieve the 90% reduction in emissions while reducing domestic steps required to get there. The EU countries, the European Parliament and the European Commission must all agree on the final goal. What are the risks? Carbon credit project developers and countries like Germany welcomed the EU plan as it would boost climate finance. Environmental campaigners warned that the EU is shirking its domestic CO2-cutting effort and urged caution in relying on low-value, cheap credits. Climate science advisors in the EU also oppose buying credits under 2040 targets, as they say that this would divert funds from local clean industries. After a glut of cheap credits that had weak environmental benefits led to a crash in carbon prices, the EU banned international credit from its carbon market. In an effort to reduce the risk, the Commission announced that it would purchase credits in accordance with the global market and trading rules for carbon credits being developed by the U.N. They include quality standards that aim to avoid the problems unregulated credit trading faced in recent times. Next year, Brussels will also propose specific standards on the quality of the carbon credits that the EU purchases. How much will it cost? The EU does not yet know. Carbon credits can range from a few dollars for a tonne CO2 to over $100 depending on the project. According to EU emission records, the bloc would have to purchase at least 140 millions tonnes of CO2 to meet 3% of its 2040 goal. This is roughly equal to the Netherlands total emissions for last year. A senior official of the Commission said that the bloc is determined to not hoard cheap junk credit. "I don’t think it would add any value." "The credits that we see on the voluntary carbon markets today are extremely cheap and this probably reflects an absence of high environmental integrity," said the senior official. (Reporting and editing by PhilippaFletcher; Additional reporting by Virginia Furness)
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AlixPartners estimates that only 15 electric car brands will be financially viable in China by 2030.
AlixPartners, a consultancy, said that only 15 of the 129 brands currently selling electric vehicles and hybrids in China are financially viable by 2030. This is because intense competition has forced consolidation, and others have left the market. AlixPartners, without naming brands, said that these 15 brands will account for 75% of China’s EV market and plug-in hybrids by the end decade. Each brand sells an average of 1,02 million vehicles annually. Stephen Dyer of AlixPartners, the head of their automotive practice in Asia said that consolidation in China would be slower than other markets because local governments might support brands which are not viable due to how important they are to regional economies, employment, and supply chains. Dyer stated that China is among the most competitive NEV markets in the World, with price wars and rapid innovation. New entrants are constantly raising the bar. This environment has led to remarkable technological and cost-efficiency advances, but many companies are still struggling to achieve sustainable profits. China's auto market, which is the largest in the world, is currently experiencing a price battle and significant overcapacity. Both of these factors are putting pressure on profitability. No other Chinese EV manufacturer has ever achieved profitability for a full year, except BYD. Chinese regulators called on automakers to stop the price war. Dyer, however, said that the price war would continue, but with "hidden factors" such as insurance subsides and zero-interest finance, rather than through direct price reductions. Dyer stated that the capacity utilization ratio in Chinese auto plants dropped to a low of 50 percent on average last year. This was the lowest level in 10 years and impacted profits.
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As Europe bakes under heatwave, new fires threaten homes in Greece's Athens and a blaze in Crete displaces over 1,000 people
Firefighters fought a fire on Thursday that burned forests and olive trees and forced more than 1,000 people to evacuate. Meanwhile, another conflagration threatened homes near Athens, underlining Greece's vulnerability. The Greek authorities struggled to control the fires due to gale-force winds, aridity and the early summer heatwave that affected much of Europe. At least eight people died in the region. On Thursday afternoon, another fire broke out near the Athens suburb Pikermi. It threatened many homes and prompted the evacuation of 3 settlements. More than 100 firefighters fought to put it out. The area was engulfed in thick grey smoke, near the Athens airport and Rafina - the second largest port of the capital. Traffic was stopped on the main road connecting the suburb with Athens. The authorities warned that there was also a high fire risk on Friday. Around 230 firefighters were deployed in Crete along with 46 engines, 10 helicopters and 10 fire trucks to put out the fire that broke out near Ierapetra, a town located on the southeast coast of Greece's biggest island, a day before. The state broadcaster ERT reported that the authorities declared a general state of emergency on Thursday in Ierapetra and its surrounding areas. Vassilis Vathrakogiannis, the spokesman for the fire brigade, said that intense winds had sparked and hindered efforts to fight fires. At least four settlements were evacuated of more than 1,000 residents, tourists and visitors. Authorities said that most people took refuge in an indoor stadium at Ierapetra. Others transferred to hotels or left Crete via boat. Mikkel Sallin (26 years old Danish tourist) said that it was "very scary" when he was evacuated from his hotel. "We're just happy to be here and feel safe." Officials said that local media reported some damage to homes and that some people had been hospitalised for respiratory problems. George Tzarakis is the head of the hoteliers of the region and expressed concern about the future bookings. Tourism is the main source of income for this popular tourist island. 'WILDFIRE HOTSPOT' Scientists call the area around Greece and other Mediterranean countries "a hotspot for wildfires" because they are prone to blazes during hot, dry summers. The climate has changed rapidly in the last few years, making these fires more destructive. Scientists claim that heatwaves arrived in Europe earlier this year. Temperatures rose by as much as 10 C (50 F), with some regions experiencing temperatures of up to 50 F. Warming seas caused a heat dome to form over Europe, which trapped hot air masses. Vathrakogiannis, a fire brigade official, said that July is the hardest month for fires due to the high temperatures and strong wind. In Turkey, authorities are fighting wildfires for the second day in Cesme and Odemis district in Izmir's western coastal province. Local TV footage showed that winds hindered the firefighters' efforts as they approached a major highway leading to Cesme. Thick smoke billowed across mountainous regions. The Italian health ministry has issued a red alert for 18 major cities, as temperatures are expected to reach up to 38 degrees Celsius (100.4" Fahrenheit). Gilberto Pichetto Fratin, the Italian Energy Minister, warned that temporary blackouts could occur due to the surge in power consumption caused by air conditioners. Axpo, a Swiss utility, has shut down its two reactors at the Beznau Nuclear Power Plant due to high temperatures in river water. Reporting by Alexandros. Avramidis at Ierapetra; Renee Maltezou in Athens; Angeliki Koutantou in Ankara; Alvise Armellini and Miranda Murray, in Berlin. Editing by Bernadette. Baum.
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Treasury Dept.: US sanctions target Iran oil trade and Hezbollah
Treasury Department: The United States announced sanctions against a network of businessmen who smuggle Iranian oil under the guise of Iraqi oil. They also targeted a Hezbollah controlled financial institution. Since at least 2020, the Department of State has said that the network of companies owned by Iraqi businessman Salim Ahmad Said have been purchasing and shipping billions in dollars of Iranian oil blended or disguised as Iraqi oil. Treasury Secretary Scott Bessent stated that Treasury would continue to target Tehran’s revenue sources, and increase economic pressure in order to disrupt the regime’s access to financial resources which fuel its destabilizing actions. Treasury Department sanctioned vessels accused of engaging covertly in Iranian oil delivery, increasing pressure on Iran's shadow fleet. The Treasury Department has also sanctioned several senior officials, as well as an entity affiliated with Hezbollah-controlled Al-Qard Al-Hassan. The department stated that the officials conducted transactions worth millions of dollars which ultimately benefited Hezbollah, but masked its true intentions.
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Canada's trade surplus narrows in May; US exports fall to their lowest level since the pandemic
Data released on Thursday showed that Canada's May trade deficit narrowed following a record-breaking one in April. Total exports increased and imports decreased, even though the U.S. Tariffs impacted shipments south of border. Statistics Canada reported that the trade deficit for May was in line with expectations, at C$5.9 (US$4.34) billion. This is down from C$7.6 billion which had been revised downwards in the previous month. Exports rose by 1.1% monthly after a 11% drop in April. Statscan reported that this was the first rise in exports for four months. This was due to record exports outside the U.S. Prince Owusu is a senior economist at Export Development Canada. He said, "The most important thing I take away from these data is diversification." He said: "While we continue bleeding in the U.S. we are diverting trade to another market." In May, the share of exports and imported goods with the U.S. fell to its lowest level since the Pandemic Year of 2020. Exports to Canada's largest trading partner in the U.S. fell for the fourth consecutive month, with a 0.9% drop registered in May. Exports in volume terms increased by 0.7% during May. President Donald Trump imposed tariffs of 25% on automobiles made in Canada and 50% on steel and aluminum imports. Canada also imposed retaliatory duties. The trade dispute between Canada and the United States, whose bilateral trade exceeded a trillion Canadian Dollars last year, has hurt Canada's exports as well as the Canadian job market. Mark Carney, Canada's prime minister, and Donald Trump aim to reach a deal on trade by July 21. Statscan reported that Canada's exports in May totaled C$60.81 Billion, a significant increase from C$60.12 Billion in April. This category grew by 15.1%. The main driver was the exports of unwrought metals, which grew by 30.1% and reached a record amount of $5.9 billion. The statistics agency stated that "most of the increase was due to increased physical shipments to the United Kingdom." The statistics agency said that excluding metal and nonmetallic mineral products the total exports fell by 1.2%. Canadian companies are looking for ways to expand their trade outside the U.S. as trade with that country has declined. Statscan reported that exports to other countries than the United States reached a record-high in May, but this was not enough for the U.S. and China to offset the loss of canola, crude oil, and other products. Total imports fell by 1.6%, to C$66.66 Billion. Imports from the U.S. dropped by 1.2%. After the trade data, the Canadian dollar was down 0.23% at 1.3615 against the U.S. Dollar. The yields on two-year government bond rose 3.7 basis points, to 2.706%. The May deficit, although smaller than the previous month, was still one of the largest in history. Economists predicted that two months' decline would bring the deficit down. second quarter GDP
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Iran's Foreign Minister says Iran is committed to Non-Proliferation Treaty
Abbas Araqchi, the Foreign Minister, said that Iran is committed to the Nuclear Non-Proliferation Treaty (NPT) and its safeguards accord. This was a statement made on Thursday after Tehran passed a law that suspended cooperation with the U.N.'s nuclear watchdog. Araqchi, in a blog post on X, wrote: "Our cooperation will be channeled via Iran's Supreme National Security Council (for obvious safety and security purposes). The United States called the move "inacceptable" by President Masoud Pezeshkian, who on Wednesday signed into law the legislation that was passed last week by the parliament to suspend the IAEA's cooperation. Araqchi made his comment about X in response to a request from the German Foreign Ministry, which urged Tehran to reconsider its decision to discontinue cooperation with IAEA. Araqchi accused Germany "of explicit support for Israel’s unlawful attack against Iran, including safeguarded nucleosites". Iran accuses the IAEA for siding with Western nations and justifying Israel's actions. Airstrikes against Iranian nuclear facilities from June 13-24 The saga began the day after the board of directors of the U.N. agency voted to declare Tehran as in breach of its NPT obligations. Western powers have suspected for a long time that Iran's declared civil atomic energy program is a cover to build nuclear bombs. Iran has said that it enriches uranium for peaceful nuclear purposes only. Inspectors of the IAEA are responsible for ensuring compliance with the NPT, by attempting to verify whether nuclear programmes in countries that have signed treaties are not diverted to military purposes. The new law, which came into force on Wednesday, stipulates that the Supreme National Security Council of Tehran must approve any future inspections by IAEA of Iranian nuclear sites. We are aware of the reports. "The IAEA awaits further official information from Iran", the Vienna-based global watchdog of nuclear technology said in a press release. U.S. State Department spokeswoman Tammy Bruce Regular briefing On Wednesday, the IAEA said that Iran must immediately cooperate with it. (Reporting and editing by Timothy Heritage, Mark Heinrich and Elwely Elwelly)
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Oil prices ease on US tariffs and OPEC+ production expectations
The oil prices dropped slightly on Thursday, as concerns about the possible reinstatement of U.S. Tariffs raised doubts over demand in advance of an anticipated supply boost from major producers. Brent crude futures dropped 34 cents or 0.49% to $68.77 per barrel at 1326 GMT. U.S. West Texas Intermediate Crude fell 31 cents or 0.46% to $67.14. The two contracts reached their highest levels in a week on Wednesday, as the oil producer Iran halted cooperation with the U.N. Nuclear Watchdog. This heightened concerns that the long-running dispute over Iran's nuclear program could once again escalate into an armed conflict. Prices were also raised by a preliminary trade agreement between the U.S. However, tariff uncertainty is a major concern. The 90-day suspension of the higher U.S. Tariffs expires on July 9. Several large trading partners, such as the European Union and Japan have not yet concluded trade agreements, which raises concerns over the economic impact and its implications for fuel consumption. The OPEC+ oil producer group is expected to increase its output by 411,000 barrels a day during their policy meeting this weekend. A private sector survey revealed that in June, service activity in China -- the world's largest oil importer -- expanded at its lowest pace in nine-months as new export orders and demand declined. The unexpected increase in U.S. crude oil inventories has also raised concerns about demand in the world's largest crude consumer. Energy Information Administration reported on Wednesday that the U.S. crude oil inventories increased by 3.8 millions barrels, to 419,000,000 barrels. In a poll, analysts had predicted a drop of 1.8 millions barrels. Data showed that the U.S. unemployment rate dropped unexpectedly in June, while job growth was strong. This could allow the Federal Reserve to defer its decision to cut interest rates. "Thursday’s jobs report exceeded expectations, which shows the resilience we've seen in the economy for the past few months is still intact." David Laut, Chief Investment Officer of Abound Financial, said that we still expect the Federal Reserve will continue to wait and see on interest rates. (Reporting and editing by Barbara Lewis; Robert Harvey)
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After a jolt, the dollar and UK bonds are stable after strong US jobs data
The dollar and Wall Street rose on Thursday as the U.S. employment data was strong. In Europe, Britain's bonds recovered from renewed debt concerns. The announcement of a trade deal between the United States of America and Vietnam before the deadline for worldwide U.S. tariffs next week encouraged bulls over night. And the strong U.S. job numbers helped the dollar double the gains of the day and ensured that the S&P 500 opened at new all-time highs. The Labor Department reported on Thursday that nonfarm payrolls grew by 147,000 jobs after increasing 144,000 in May. The economists polled predicted that 110,000 new jobs would be added in June. As traders delayed the timing of Fed rate cuts, they accompanied the rise in stocks and dollar with a surge in U.S. Treasury Yields. The yield on the 2-year note, which is usually in line with expectations of interest rates from the Federal Reserve, increased 8.9 basis points, to 3.88%. The yield on the benchmark U.S. 10 year notes increased 4.9 basis points to 4,342% Seema Sha, Principal Asset Management's Chief Global Strategist said that the fact that payrolls were higher than expected, the drop in unemployment rates, and the fall in claims for joblessness "completely dispels the argument" of imminent rate cuts. She added that it "implies there is no absolute urgency for Fed support" and predicted no cuts until the end of the year. The pan-European STOXX 600 Index remained 0.4% higher, and MSCI's main 47 country world shares gauge remained on track for its seventh highest record in the last eight session. The bonds of Britain recovered some of the losses suffered on Wednesday due to uncertainty about Finance Minister Rachel Reeves’ future. However, they remained lower than recent levels. The 20-year bond yield, a proxy for longer-term borrowing costs by the UK government, has eased 8 basis points since its highest spike on Wednesday in October 2022, during Liz Truss' ill-fated tenure as premier. Reeves' tearful appearance in parliament raised questions about Reeves' future and Britain’s public finances, after the government had to abandon billions of pounds of cuts in welfare spending. Susannah Streeter is the head of money markets and financial services at Hargreaves Lansdown. Analysts were closely watching the data after the private sector payrolls report, released on Wednesday, surprised them with its first decline in more than two years. Investors also waited to see if the tax and spending bill of U.S. president Donald Trump was passed by Congress. According to nonpartisan analysts, the bill will add $3.3 trillion over the next 10 years to the United States’ $36 trillion national debt. Ding Ding The U.S. announced overnight that it had reached a deal with Vietnam. This included a 20% tariff for exports to the U.S., which is still higher than the previous rate of 46%. Vietnamese shares rose 0.5%, the most since April 2022. However, the dong currency fell to a record low at 26,229 dollars per dong. Shane Oliver is the chief economist of AMP. He said, "Although more trade deals will be announced soon, the 20 percent tariff with Vietnam is not a good sign. That or even higher rates could become the standard for many, including Europe and Japan." In fact, Japan invoked its national interests when talks with the U.S. stalled, and South Korean President Lee Jae Myung stated on Thursday that U.S. Tariff negotiations looked difficult, but he couldn't say if they could be concluded by next Tuesday. MSCI's broadest Asia-Pacific share index closed 0.3% higher. China's blue chip index rose 0.6% as weak services data led to expectations of further stimulus. Japan's Nikkei, meanwhile, finished flat. The dollar is still barely above its three-year low despite the payrolls increase. The pound was at risk of stagnating again after Wednesday's 0.8% drop. Futures indicate less than 25% likelihood of a Fed rate cut in this month. The Fed hasn't eased its policy this year and Trump is furious. He reiterated on Wednesday his call for Jerome Powell, the Fed Chair, to resign. Trump has been berating Powell since his January return to the White House for failing to lower borrowing costs. Trump said that rates should be reduced to 1%, from the current Fed benchmark rate of 4.25%-4.50%. UBS' survey of reserve managers on Thursday revealed that two thirds believe the Fed's independence is in danger and nearly half believe the U.S. rule of law may be deteriorating to the point where it could influence their asset allocation. Oil prices dropped on the commodities market after a 3% increase overnight, as Iran suspended its cooperation with U.N.'s nuclear watchdog. Brent crude futures fell 0.8% to $68,64 per barrel. U.S. crude oil was down 0.7% on the day. Gold prices fell 0.1%, to $3352 per ounce. (Reporting and editing by PhilippaFletcher; Marc Jones)
What if you prayed to stop climate change? Now there's a Catholic Mass to stop climate change
The Vatican published a new rite on Thursday that will allow priests celebrate a Mass exhorting Catholics to care for the Earth. This is the latest effort by the global Church of 1.4 billion members to combat global climate change.
Since centuries, Catholic priests can celebrate special Masses in order to pray for their nation, to give thanks following a harvest, or to ask God to stop a natural catastrophe.
Two Vatican offices have prepared a new "Mass for caring for Creation" that allows priests pray for Catholics to "lovely care" for the creation and to "learn how to live in harmony with every creature".
"This Mass... calls us faithful stewards to what God has entrusted us with - not just in daily choices and policies, but in our prayer and worship and in our way of life in the world," Cardinal Michael Czerny said, presenting the ritual at a Vatican Press Conference on Thursday.
Priests can offer Masses to meet a variety of needs. The Vatican has 50 options, including the new rite approved by Pope Leo.
Pope Francis, who died in 2016, was a strong advocate of caring for the creation. He was the very first pope who embraced the scientific consensus on climate change, and urged countries to reduce carbon emissions according to the 2015 Paris Climate Accord.
Rev. Bruce Morrill is a Jesuit priest at Vanderbilt University and an expert in Catholic liturgy.
He said: "This new theme Mass shows the Church's full recognition of the grave threats caused by climate change."
The new Vatican Rite comes just two days after Catholic Bishops from Asia Africa and Latin America published a joint call to action, the first of its type, to urge governments around the world to take more action to combat climate change. (Reporting and editing by Saad Saeed; Joshua McElwee)
(source: Reuters)