In a frontpage story, the Times reports that “families in Britain would be sent annual payments to offset the cost of higher gas bills and encourage a switch to green energy as part of plans under consideration in Whitehall”. It continues: “Proposals being discussed by senior government advisers would compensate households for increases in gas bills that will result from the drive to cut carbon emissions. The scheme would mean low- and middle-income families being paid a set amount each year. It would be determined by how much the government raised from new carbon taxes.” A ‘Whitehall source” tells the paper that the plan is “still at a relatively early stage and the Treasury is likely to be resistant, but it is a clear way of showing people that they are not bearing the brunt of net-zero”. Government ministers are “also examining proposals for a boiler scrappage scheme to reduce the upfront costs of converting from gas to renewable energy”, the paper says: “The government is expected to inject hundreds of millions of pounds into the new Clean Heat Grant, due to start next April. The scheme will offer people £4,000 towards the cost of green heating systems.” A government spokesperson responded that more details “will be provided in the heat and buildings strategy this year”.

Meanwhile, the Times also reports that “some of the world’s biggest energy companies have joined forces to develop carbon capture and storage technology in Teesside and the Humber in a project that could create 25,000 jobs”. The “East Coast Cluster” – which includes BP, Equinor, Shell, SSE, Drax and National Grid – will today submit its application to a government competition that will select the first two “industrial clusters” to receive financial support to develop the nascent technology in Britain, the paper says. It adds: “The multibillion-pound project aims to capture carbon dioxide emissions from heavy industry, new power stations and hydrogen production plants and pipe them offshore for permanent disposal under the North Sea.”

BP’s annual energy review reveals that global wind and solar energy capacity grew at a record rate last year, reports the Guardian, while the oil industry recorded its steepest slump in demand since the second world war. The report finds that the impacts of Covid-19 lockdowns on the energy industry “led carbon emissions to plummet by 6% on the year before, the sharpest decline since 1945”, the paper explains. However, “the report says the impact of Covid on carbon emissions needs to be replicated every year for the next three decades if governments hope to limit global heating to 1.5C above pre-industrial levels”. BP chief economist Spencer Dale said that much of the dip in emissions was likely to “prove transitory” and “there was no sign of the decisive shift envisaged” to meet climate targets, reports Reuters. However, Dale added that “the trends we’re seeing here are exactly the trends we’d want to see as the world transitions to net-zero – strong growth in renewables. Crowding out coal is exactly what the world needs to see”. For example, “the increase in installed capacity last year was 50% bigger than at any time seen in history, despite the world (being) in turmoil, despite the largest peace-time recession”, Dale said. The Financial Times “Energy Source” column looks into the details of the BP report, noting that “coal consumption fell by 4.2%, led by declines in the US and India. OECD coal demand fell to its lowest level since at least 1965, when BP started collecting the data. But its use in power generation is still relatively robust, only falling to 2015 levels.”

In related news, the Independent reports that “wind and solar power accounted for 29% of Britain’s electricity production last year, putting the country sixth on the global league table – but well behind first-place Denmark”.

More than 80 lawmakers have called on the European Union’s executive branch to include nuclear energy in its classification system for green investment, in order to help the bloc meet its ambitious climate neutrality goal, reports Bloomberg. In a letter to the European Commission, the members of the European Parliament wrote: “We cannot afford to ignore any energy sources that have the prerequisites to make a positive contribution on the path towards climate neutrality…That nuclear power is such a kind of energy source is, to us, obvious.” The outlet explains that “in the coming months, the commission is planning to propose how to classify atomic energy and natural gas in its taxonomy rules, after delaying the decision earlier this year”. The criteria “are crucial because they have the potential to unlock billions of euros for green projects”, the article says: “The challenge is to ensure the system gets political and social support while avoiding the risk of greenwashing, or overstating the significance of emissions reductions.”

Meanwhile, the Financial Times reports that Europe’s biggest industrial companies are warning that Brussels needs to “walk the talk” of its climate ambitions by enabling a “massive ramp-up” of renewable energy in forthcoming climate legislation. Some 22 chief executives and 18 European legislators have written an open letter to EU Commission president Ursula von der Leyen voicing their concerns that Europe’s energy system is not fit to enable a green transition, the paper explains. The letter warns: “Without a stronger European policy focus and increased investments boosting the availability of renewables for industrial use, we not only risk delaying needed greenhouse gas reductions…but also our overall credibility.” Brussels is expected to unveil proposals for a legislative framework to support its ambition to reach net-zero by 2050 next week, the FT says, adding: “They are expected to include an overhaul of the EU’s carbon pricing market, a border tax on polluting imports and stricter rules for car emissions. However, the industrialists have warned that more needs to be done to develop an EU-wide approach to energy – on everything from granting permits for new renewable developments to coherence in energy investment across the bloc.” Bloomberg also has the story.

In other reporting around the EU’s forthcoming proposals, Politico says that the solar industry has warned that “a potential boom in new solar photovoltaic (PV) power plants…could be undermined by red tape at a national level”. And a Reuters analysis piece says that plans to “extend carbon pricing to the fuel used in cars and to heat homes is facing a wall of early resistance from countries and lawmakers fearing a public pushback unless backers find ways to compensate those worst hit”.

Finally in Europe, Reuters reports that the European Central Bank said yesterday that it would further incorporate climate change considerations into its monetary policy, including on disclosure, risk assessment, and decisions on collateral and corporate sector asset purchases. Politico also has the story.

Former Bank of England governor Mark Carney has defended plans for a new market for carbon offsets – which has been accused of greenwashing by environmental groups – with a proposal for a governance committee, the Financial Times reports. The paper continues: “The market initiative backed by more than 250 companies and organisations, known as the Taskforce on Scaling Voluntary Carbon Markets, released its proposals for a new governance board and new standards for trading carbon offsets.” These offsets are generated by projects that reduce or remove emissions, such as afforestation, the paper explains, and the task force aims to “expand and improve the global carbon offset market, by creating standardised commodity-like contracts that allow companies to buy and sell carbon offsets at a large scale”. Carney said that “addressing greenwashing is precisely why this task force has been set up, and precisely why the governance recommendations it is unveiling today are so important”. However, Charlie Kronick, senior climate adviser at Greenpeace UK, told the Times that the plan “fails to get to grips with the real challenges of carbon credits. It’s a trader’s charter, written by and for the companies that want to buy and sell pollution, not cut it”. And the Thomson Reuters Foundation reports that Jennifer Morgan, executive director of Greenpeace International, this week called offsetting “one of the most sophisticated, cynical and pervasive forms of greenwashing”, saying it was not effectively reducing emissions. Bloomberg warns that the task force “is getting left behind as exchanges start trading contracts before the rules are finalised”. The outlet explains that “commodity exchanges in Chicago and Singapore are rushing to start trading contracts this year, before the standards are decided, raising concerns the task force will fail to provide any kind of structure to a market that already has no government oversight”. The Guardian and BusinessGreen also have the story.

US climate envoy John Kerry will visit Moscow next week to speak to officials “to discuss various means of enhancing global climate ambition”, the Hill reports. In a short announcement, the US State Department said the trip will take place over 12-15 July, the outlet says, adding: “Russia participated in a White House climate summit in April. President Biden said at the time that he was ‘heartened’ that Russian President Vladimir Putin called for collaborating with other countries to advance carbon dioxide removal.”

At the same time, the Hill also reports that “dozens of progressive organisations warned in a letter [yesterday] that escalating US-China tensions could undermine cooperation on international climate goals and continue what they called a tradition of scapegoating China for the climate crisis”. In the letter to President Biden and the US Congress, the organisations – which include the Sunrise Movement, the Union of Concerned Scientists and Friends of the Earth US – call for an end to the “dominant antagonistic approach” to relations between Washington and Beijing, the outlet explains. The letter says that “China and the US should not only work together to support international best practice environmental, human rights, social, and governance standards, but also to ensure that producer countries and communities have access to affordable and clean energy – and the resources needed to mitigate the impacts of climate change”.

In other US news, the Guardian reports that the state of North Dakota has sued the Biden administration over its suspension of new oil and gas leases on federal land and water. The lawsuit “seeks to force the US Bureau of Land Management to reschedule two lease sales that were cancelled in the state and block the agency from revoking others in the future”, the paper explains, adding that “the lawsuit said the two cancelled sales this year have cost the state more than $82m”. Reuters also has the story.

The delay in the launch of China’s national emissions trading scheme (ETS) could be partially caused by the government’s cautiousness about “its impacts on economic inequality between provinces”, reports S&P Global Platts, citing “academics and researchers”. “Higher prices for products from carbon-intensive industries and pressure to comply with an unproven global carbon regime” might also have led to the postponement, the outlet says. [China’s national ETS will start trading this month, according to China’s State Council, after it had missed its original, end-of-June deadline. The government has not given reasons for the delay.] China News Services says that the national ETS, the “world’s largest carbon market”, is “ready to be rolled out”. The state-run newswire states that the national ETS had completed “all kinds of preparatory work” for its trading. It cites the Ministry of Ecology and Environment.

Separately, Caroline Wilson, the British ambassador to China, has said that Chinese investment would be an “important driving force” in the UK’s net-zero emissions strategy. In an “exclusive” interview with the 21st Century Business Herald, Wilson highlights the “increasing importance” of UK-China cooperation to help the two countries achieve their respective climate goals. She expects the UK and China to work together on a series of “key areas”, including renewable energy and emissions trading schemes, the article says.

Meanwhile, Caixin reports that the State Council plans to set up new “monetary policy instruments” to support the nation’s carbon emissions reduction. The outlet says that “the new tool will take the form of re-lending quotas with preferential rates issued to qualified financial institutions to encourage their funding for clean energy and carbon reduction-related projects”. In other news, PV Magazine reports that the demand for solar photovoltaics (PV) in China could “effortlessly” exceed 100 gigawatts (GW) next year following a year of “flat” demand in 2021. The trade publication cites Asia Europe Clean Energy (Solar) Advisory.

Writing for Thomson Reuters Foundation, Conservative MP and COP26 president-designate Alok Sharma says that “developing countries need clarity and confidence now that the $100bn a year pledged to help them tackle climate change will be delivered”. This finance is “just a fraction of the investment needed to tackle the climate crisis”, Sharma says, but delivering it “is also a matter of trust”. He adds: “I’ve heard first-hand from leaders and ministers in developing countries how frustrated they are that the promised funds have not been mobilised fast enough.” While there has been “commendable” progress from G7 countries, “there is further to go before COP26”, writes Sharma: “Developed countries need to publish a clear plan for how, together, we are going to deliver the $100bn a year between now and 2025.” He concludes: “I hope that developed countries will pledge new funds over the coming months. There are opportunities for donors to step up at the meetings of G20 ministers in Italy in July, as well as at the United Nations General Assembly in September, but time is short and the stakes are sky high. We need a big push, to get us over the line, to show that promises made are promises kept, and to create the best possible conditions for those crucial negotiations in Glasgow.”

Also in COP26-related comment, Joss Garman – UK director of the European Climate Foundation [which funds Carbon Brief] – writes in his newsletter that it is “a major understatement to say the UK government faces strong headwinds ahead of COP26”, but “the next few days could reveal our chances of a change in the weather”. Garman picks up on the progress towards the $100bn climate finance pledge: “It’s conceivable this climate finance target will finally be hit this year after fresh money from Germany and Canada at the recent G7, although most experts think this will largely depend on President Joe Biden increasing America’s contribution at the UN General Assembly in September.” Garman also comments on the G20 meetings kicking off in Venice today, noting that “if nothing materially new emerges from leaders…it raises the prospect that China could once again face the blame for derailing the international climate effort just as it had picked up new momentum from the election of Joe Biden”. (See more G20 comment in the Financial Times below.) In Europe, Garman notes that “another major development expected next Wednesday is the substance of the EU’s plan for meeting its target to more than halve the continent’s emissions by 2030 – the so-called ‘Fit for 55 package’”. One of “the most eye-catching items will be a carbon border adjustment mechanism”, Garman says. (Again, see more on this from the FT below.) And, finally, further details of the UK’s net-zero strategy are expected before Parliamentary recess, Garman notes: “Key tests are whether the end to new combustion engine sales by 2030 goes into law, and a clear and robust plan to deliver clean heating in 600,000 households each year by 2028.”

A “carbon border tax a necessity”, says a Financial Times editorial: “A functioning emissions trading scheme needs some means of adjustment at the border to make sure imports and domestic production are treated the same. This is vital to create a level playing field for competition and prevent ‘carbon leakage’ where measures to reduce emissions in one country lead producers to relocate to another with looser standards.” However, despite the “environmental imperative”, carbon border taxes will “be difficult to implement”, the editorial says. The paper suggests the “EU’s leaked proposal for a carbon border adjustment mechanism looks to be a good first step”. For example, “under the proposals companies would have to make up the difference between their carbon price at home and the EU’s own emissions trading scheme, ensuring fair competition”, the paper says. In addition, “the scheme would be phased in gradually and only apply to a handful of sectors. That would give businesses time to adjust but also provide an ironclad commitment that would reduce the incentive for production to gradually relocate elsewhere”. However, “there are also flaws”, the editorial notes, including “no allowance for the least developed countries”. Nonetheless, the paper concludes, “compared with all the other challenges involved in ending global warming, designing a carbon border tax should not be insurmountable”.

Also in the Financial Times, Gillian Tett – chair of the editorial board and editor-at-large, US – has a list “five things the G20 must do to tackle climate change”. These tasks include: “collectively embrace a steadily rising carbon price and tax”; “demand China backs away from coal”; “get serious about helping poorer nations make the transition to green energy”; “foster collaborative research into technologies such as carbon capture, hydrogen-based fuels and battery storage” (a “blindingly obvious step”); and mobilise consumers “in the climate change fight”.

A Guardian editorial comments on last month’s “very frightening” heatwave in the Pacific north-west and the attribution study that shows human-caused climate change made the event at least 150-time more likely. (See Carbon Brief‘s coverage for more details.) The scientists behind the study “did not hide their alarm that a usually cool part of the Pacific northwest had been turned into a furnace”, the paper says, yet the “disturbing signs of climate disruption are not limited to North America”. The paper continues: “If there is anything positive to be taken from this new information, and reports of the suffering and destruction caused by the heat, it can only be that it intensifies the pressure on policymakers to act.” However, the paper says, “so far, binding commitments to make the cuts in carbon emissions that are needed to avoid temperature rises above 2C are notable by their absence. With every worrying piece of climate news, the stakes ahead of November’s COP26 conference keep growing”.

The Guardian also republishes an open letter written by the mayor of Lytton – the Canadian village that recorded a new all-time high temperature for Canada during the heatwave and was subsequently largely destroyed by a wildfire. Jan Polderman writes: “A few buildings survived in town, but nearly every home in the centre of the village is gone. Where many buildings stood is now simply charred earth.” Tzeporah Berman – chair of the Fossil Fuel Nonproliferation Treaty Initiative and international program director of Stand.Earth. – writes a piece for the Guardian entitled, “Justin Trudeau’s love of fossil fuel will only make Canada’s extreme weather worse”. She argues that, “in Canada, almost every policy proposed to help us shift away from fossil fuel production and use has been watered down, delayed or shelved because of the lobbying and influence of the oil and gas companies. Just this month, while the government announced better goals for achieving zero emission cars and trucks, no laws or tailpipe regulations have been proposed. And in climate policy the devil is definitely in the details”.

Also on the heatwave, the Guardian reports that the death toll in the US has risen to nearly 200, with health authorities reporting 116 deaths in Oregon and 78 in Washington state. The paper also reports on estimates that suggest more than one billion marine animals along Canada’s Pacific coast are likely to have died in the heatwave. (See Carbon Brief’s media summary for more on the heatwave, its causes and impacts.) The Washington Post reports that the western US is “preparing for another round of scorching heat expected to hit this weekend”. The New York Times also has the story.

According to a new study, climate change will cause “profound shifts” in the length of the shipping season in the Arctic Ocean – in some places, extending the season by several months. Using climate models and ice-risk assessments for maritime travel, researchers determined the impact of climate-change-induced sea-ice melt on the extent of navigable waters in the Canadian Arctic. Above 2C of warming, the authors find, projections “indicate 100% navigation probability for part of the year” through all major shipping routes. However, they also note that coarse climate models do not accurately represent local sea-ice advection processes, and these may continue to create “hazardous conditions” to ships in the far north.

Climate change will reduce labour productivity “in most parts of the world” over the remainder of this century, a new study finds. Researchers used projections of future temperatures and a new model that accounts for changes in labour supply and productivity to calculate where and when productivity would fall. While the authors recognise that “current climate conditions already negatively affect labour effectiveness, particularly in tropical countries”, they note that under 2C warming, productivity losses are going to increase across much of the globe. However, they add, these losses will not occur uniformly everywhere, and future work should “move away from one-size-fits-all” approaches.