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Business leaders look to U.N. for deal toward carbon pricing

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October 26, 2021

By Ross Kerber and Simon Jessop

BOSTON/LONDON (Reuters) -World business leaders want the upcoming United Nations climate summit https://www.reuters.com/subjects/focus-climate-change to resolve issues that have so far hindered the use of carbon pricing to cut worldwide emissions, looking to boost the role that companies play in slowing global warming.

Executives, trade groups and policy experts say hopes for a deal are growing after negotiators at the 2019 summit in Madrid failed to settle how countries can account for international carbon trading as called for under Article 6 of the Paris climate agreement.

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A lack of international agreement has held back the development of systems for putting a price on carbon. Having some way to measure the economic cost of emissions https://www.reuters.com/business/cop/climate-change-what-are-economic-stakes-2021-10-25 is a top priority of companies across many industries whose leaders want to cut greenhouse gasses, said Rich Lesser, global chair of Boston Consulting Group.

For executives, “if you had a global price on carbon, then it would be economically rational to pursue solutions and alternatives”, Lesser said.

Dan Byers, who will represent major trade group the U.S. Chamber of Commerce at the summit in Glasgow https://www.reuters.com/business/environment/cop26-glasgow-who-is-going-who-is-not-2021-10-15, called the final resolution of Article 6 “long overdue” to resolve technical issues such as how countries can monitor and verify carbon emissions.

He added that a factor favoring a deal is the climate focus of U.S. President Joe Biden, who returned to the terms of the 2015 Paris climate agreement https://www.reuters.com/article/us-climate-change-usa/its-official-u-s-back-in-the-paris-climate-club-idUSKBN2AJ16T after predecessor Donald Trump pulled out of the accord.

“Having the Biden administration backing Paris, and at the table, is hugely important over the long run,” Byers said.

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Other issues that business leaders will track at the meeting starting Oct. 31 include what new pledges national leaders might make to cut emissions, and how much money will be set aside to finance sustainable development in emerging markets.

Carbon pricing plans can range widely including carbon taxes that charge companies for emissions, or emissions trading markets that cap how much companies or countries can emit but allow them to trade permits to exceed those levels.

Many corporations expect carbon pricing plans will help them fulfill the now widespread “Net Zero” pledges, said Kelley Kizzier, a vice-president at the Environmental Defense Fund, a Washington advocacy group, and a onetime co-chair of the negotiating group over Article 6 at previous climate summits.

Specific issues to resolve in Glasgow for Article 6 include how to prevent two countries counting the same emissions cut, and how new carbon markets might help fund developing countries’ efforts to adapt to climate change, she said. Even if a deal is reached, companies will still be left with the work of cutting their emissions, she added.

Just because a goal is set, “It’s not rainbows and butterflies,” Kizzier said.

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DIVISIONS REMAIN

Beyond carbon pricing, leaders are more divided on other topics that will be center stage in Glasgow such as the future role of fossil fuels in the world economy.

For instance, an investor group including PIMCO, State Street Corp and French asset manager Amundi has called on countries to take steps including raising their emissions-reduction commitments and ending fossil subsidies, and there have been separate calls for international banks to stop funding fossil fuel projects.

But energy executives say fossil fuels still have a role to play in the energy transition. New natural gas facilities in emerging markets would produce fewer emissions compared with existing coal-fired generation, said Aaron Padilla, a policy director for the American Petroleum Institute, whose members include big energy companies ExxonMobil Corp, Royal Dutch Shell and Norway’s Equinor.

“There’s still significant room for natural gas especially to displace coal as a source of production,” Padilla said.

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Financial companies face their own pressures. Companies with a combined $90 trillion in assets known as the Glasgow Financial Alliance for Net Zero have called for governments to set broad net-zero targets, for instance, and to price emissions.

But the group includes banks that still back fossil fuel projects, drawing criticism that they and the alliance’s chair, U.N. special envoy Mark Carney, are missing a chance to force harder action. Richard Brooks, climate finance director for the activist group Stand.earth https://www.stand.earth, said more should follow the example of France’s Banque Postale, which said it would stop serving the oil and gas sectors outright by 2030.

“Many of the banks who are part of the alliance are getting kudos and green cover but not changing their day-to-day financial practices,” Brooks said.

Asked about the criticism, Carney said in an emailed statement that member banks must set interim 2030 carbon reduction targets and decarbonization plans. “GFANZ has launched an ambitious body of work to accelerate implementation and action, which will be outlined at COP26,” he said.

(Reporting by Ross Kerber in Boston and by Simon Jessop in LondonEditing by Matthew Lewis)

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Alibaba overhauls e-commerce businesses, appoints new CFO

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December 6, 2021

(Reuters) -Alibaba Group Holding Ltd said on Monday it was reorganising its international and domestic e-commerce businesses and would appoint a new chief financial officer.

The changes come as Alibaba faces headwinds on multiple fronts, including increased competition, a slowing economy and a regulatory crackdown.

The e-commerce giant’s Hong Kong-listed shares slid 8% in early morning trade.

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Alibaba said it would form two new units to house its main e-commerce businesses – international digital commerce and China digital commerce, in a bid to become more agile and accelerate growth.

The international digital commerce unit will house Alibaba’s overseas consumer-facing and wholesale businesses, and include AliExpress, Alibaba.com and Lazada. The unit will be headed by Jiang Fan, whose past roles include president of the Taobao and Tmall marketplaces.

Alibaba will house its domestic commerce businesses in the China digital commerce unit which be led by Trudy Dai, a founding member of Alibaba, it said.

The company’s deputy chief financial officer, Toby Xu, will succeed Maggie Wu as the company’s chief financial officer from April, it said, describing his appointment as part of the company’s leadership succession plan.

Xu joined Alibaba from PWC three years ago and was appointed deputy CFO in July 2019.

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Wu, who helped lead three Alibaba-related company public listings as CFO, will continue to serve as an executive director on Alibaba’s board.

Last month the company slashed its forecast for annual revenue growth to its slowest pace since its 2014 stock market debut and saw sales at its banner event, online shopping festival Singles Day, grow at their slowest rate ever.

(Reporting by Akriti Sharma in Bengaluru and Brenda Goh in Shanghai; Editing by Edwina Gibbs)

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China Evergrande shares hit 11-year low after firm says no guarantee it can meet repayments

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December 6, 2021

By Clare Jim

HONG KONG (Reuters) – Shares of China Evergrande Group tumbled 12% to an 11-year low on Monday after the firm said there was no guarantee it would have enough funds to meet debt repayments, prompting Chinese authorities to summon its chairman.

The shares fell as a 30-day grace period on a coupon payment of $82.5 million due on Nov. 6 comes to an end on Monday.

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Evergrande, once China’s top-selling developer, is grappling with more than $300 billion in liabilities. A collapse could send shockwaves through the country’s property sector and beyond.

In a filing late on Friday, Evergrande, the world’s most indebted developer, also said it had received a demand from creditors to pay about $260 million.

That prompted the government of Guangdong province, where the company is based, to summon Evergrande Chairman Hui Ka Yan, and it later said in a statement it would send a working group to the developer at Evergrande’s request to oversee risk management, strengthen internal controls and maintain normal operations.

In a series of apparently coordinated statements late in the evening, China’s central bank, banking and insurance regulator and its securities regulator sought to reassure the market that any risks to the broader property sector could be contained.

Short-term risks caused by a single real estate firm will not undermine market fundraising in the medium and long term, the People’s Bank of China said, adding that housing sales, land purchases and financing “have already returned to normal in China”.

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Evergraned’s stock fell more than 12% to HK$1.98, its lowest since May 2010.

(Reporting by Clare Jim; Editing by Anne Marie Roantree and Christopher Cushing)

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Oil gains more than $1/bbl after Saudi price hike

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December 6, 2021

By Florence Tan

SINGAPORE (Reuters) – Oil prices rose by more than $1 a barrel on Monday after top exporter Saudi Arabia raised prices for its crude sold to Asia and the United States, and as indirect U.S.-Iran talks on reviving a nuclear deal appeared to hit an impasse.

Brent crude futures for February gained $1.69, or 2.4%, to $71.57 a barrel by 0033 GMT while U.S. West Texas Intermediate crude for January were at $67.92 a barrel, up $1.66, or 2.5%.

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On Sunday, Saudi Arabia raised January official selling prices for all crude grades sold to Asia and the United States by up to 80 cents from the previous month.

The price hikes were implemented despite a decision last week by the Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, to continue increasing supplies by 400,000 barrels per day in January.

Prices were also buoyed by diminishing prospects of a rise in Iranian oil exports after indirect U.S.-Iranian talks on saving the 2015 Iran nuclear deal broke off last week. European officials voiced dismay on Friday at sweeping demands by Iran’s new, hardline government. The talks are expected to resume middle of this week.

Both benchmarks rebounded after falling last week for their sixth week in a row for the first time since November 2018 on concerns that the new coronavirus variant Omicron could impact global economic growth and fuel demand.

In another sign of the turmoil unleashed by the ever-changing pandemic, the head of International Monetary Fund said the global lender is likely to lower its global economic growth estimates because of the new variant.

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Omicron has spread to about one-third of U.S. states as of Sunday.

(Reporting by Florence Tan; Editing by Stephen Coates)

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