Friday, June 3, 2011

Isra-Mart srl : Record-breaking Greenhouse Gas Emissions, but Carbon Market Failing

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Greenhouse gas emissions dropped in 2009 in the wake of the Great Recession. Research now shows emissions rebounded quickly in 2010, setting a new all-time record.

In a press release, the International Energy Agency (IEA) said the prospect of limiting the global increase in temperature to no more than 2 ºC is getting bleaker. Commenting on the new data, economist Nicholas Stern said emissions are “now close to being back on a ‘business as usual’ path.”

Nonetheless, Christiana Figueres, executive secretary of the United Nations Framework Convention on Climate Change, called for an even stricter goal in a speech at an emissions trading conference. “Two degrees is not enough – we should be thinking of 1.5 ºC,” she said.

Canada’s emissions likewise fell in 2009, as described in the government’s emissions report to the United Nations. However, they deliberately omitted details on tar sands operations’ emissions, which showed a 20 percent rise in pollution in 2009.

Despite record emissions, international carbon trading shrank for the first time since the program began in 2005, from $143.7 billion to $141.9 billion. The portion for the Clean Development Mechanism, aimed at helping developing countries put low-emission options in place, fell by nearly half, in large part because of uncertainties about the successor to the Kyoto Protocol. Because of this drop, Andrew Steer, the World Bank’s Special Envoy for Climate Change, told the Guardian, “The [carbon] market is failing us.”

Germany, Others Flee Nuclear

Germany had planned to expand its nuclear program, until Japan’s Fukushima disaster led to fresh debates over nuclear power. Now the government has announced it will close all the country’s nuclear power plants by 2022. The country had already shut down seven of its oldest nuclear plants in March, and those will remain off.

Germany’s largest utility, E.ON, is upset about the policy reversal and plans to sue the government for damages. E.ON and other big operators are facing big losses, not just because of the policy change but also because “customers are fleeing in droves” to companies that offer nuclear- and coal-free electricity.

Grid operators had already warned that Germany may suffer blackouts this summer if these nuclear plants were to remain off, and other European countries may likewise faceblackouts due to a spring drought that has left river and reservoir levels low.

To make up for lost electricity from nuclear plants, Germany may turn to higher-emission sources like coal in the short run, boosting its carbon dioxide emissions by about 40 million metric tons, or around 5 percent. The move is a “shot in Russia’s arm,” said Steve LeVine of Foreign Policy, since it will make Germany even more reliant on natural gas from Russia, holder of the world’s largest proven reserves. Already Germany has become more reliant on heavily-nuclear France, becoming a net importer of electricity from them.

In the longer term, the government is raising its targets for renewable energy, aiming to double its share, from 17 percent today to 35 percent by 2020. In 1997, Germany set a target of achieving 14 percent renewables by 2010, but met the target early, in 2007. Integrating a large share of renewables is easier than thought before, according to a new analysis by the IEA.

Switzerland also decided to phase out nuclear power, albeit on a slower schedule—by 2034. Nuclear power supplies 40 percent of the country’s electricity, making it one of the world’s most nuclear-reliant countries.

Plea for Oil

Meanwhile, oil prices have remained high, with Brent crude remaining above $110 a barrel, leading the International Energy Agency in mid-May to make a rare formal plea to the world’s oil producers to raise their production, because continued high prices could hurt economic growth.

Saudi Prince Al-Waleed bin Talal agreed oil prices are too high, saying he would like them to be around $70 to $80 a barrel. “We don’t want the West to go and find alternatives, because, clearly, the higher the price of oil goes, the more they have incentives to go and find alternatives,” Talal told CNN.

But more than a dozen experts surveyed by Reuters said members of the Organization of the Petroleum Exporting Countries (OPEC) are unlikely to raise production quotas at their upcoming meeting.

In part this is because there’s disarray over who will even attend the meeting. Iran’s president Mahmoud Ahmadinejad sacked the country’s oil minister and announced he would take on the job himself, and planned to represent Iran at the OPEC meeting. But a few days later this was reversed, after the country’s Guardian Council said Ahmadinejad wasn’t allowed to take on the oil minister job.

Who might represent Libya has also been up in the air, after Shokri Ghanem, head of the national oil company, was reported to have defected from Muammar Gaddafi’s government. He showed up recently in Italy, announcing at a press conference that he had in fact defected, but is undecided about working with the rebels.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Isra-Mart srl : Turkey receives World Bank grant to help greenhouse gas mitigation

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Eight countries (Chile, China, Columbia, Costa Rica, Indonesia, Mexico, Thailand, and Turkey) have each received an initial grant of $US350,000 to help think through and plan how they will design, pilot, and eventually implement market-based instruments for greenhouse gas mitigation. The grants are the first made under the Partnership for Market Readiness (PMR), a World Bank initiative launched at the UN climate change conference in December 2010. The idea of the Partnership is to build capacity in countries so that they can develop new market-based instruments to fight climate change. Each of the eight recipient countries will now develop a "Market Readiness Proposal" that will detail their plans.
The PMR is a multi-million dollar partnership among governments, experts and organizations which aims to provide support to about 15 countries as they build technical and institutional capacities for the use of market instruments, such as domestic emissions trading schemes or new international crediting mechanisms, to scale up mitigation efforts. The fund is supported by ten contributors – Australia, the European Commission, Germany, Japan, the Netherlands, Norway, Spain, Switzerland, the United Kingdom and the United States – which together have pledged nearly US $70 million. More countries have expressed an interest to join. "Over the past two days here in Barcelona, more than 30 countries have been meeting to talk about new initiatives in emerging economies with regard to market-based instruments”, said Andrew Steer, Special Envoy for Climate Change. “We've heard remarkable plans from China, Chile, Costa Rica, Colombia, Indonesia, Mexico, Thailand, Turkey and others. These countries are taking a lead in building the capacity and foundation for a future global carbon market with the support of the Partnership for Market Readiness." PMR funding and technical assistance will place particular focus on "readiness" aspects, including shoring up data collection and management, the establishment of baselines, and the creation and strengthening of domestic measurement, reporting and verification systems, as well as support for policy analysis and the development of a regulatory framework. Mexico, for instance, is interested in developing a registry that would incorporate different carbon offset markets in one centralized system. “This will help add quality and transparency to the carbon offsets being sold, independent of the market being utilized,” said Mr. Jose Antonio Urteaga of Mexico’s Ministry of Environment and Climate Change. China, also a PMR Implementing Country Participant, plans to use the support of the PMR to pursue its ambitions for an emissions trading scheme. "The Government of China will, according to the requirements of the Outline of the 12th Five-Year Plan, gradually establish a market system for carbon emissions trading to promote the achievement of its carbon intensity reduction objective," said Mr. Wang Shu of the National Development Reform Commission of China. “The initial plan is to establish carbon emissions trading schemes in some pilot regions, and try to establish a unified national system in 2015.” In addition to the approval of preparation funding proposals, the PMR Partnership Assembly also confirmed Morocco as an implementing country participant, bringing the total number of Implementing Country Participants to ten. The PMR, launched at the Conference of the Parties in Cancun on December 8, 2010, is targeting a total capitalization of $100 million before end of this year and aims to provide grant support to 15 Implementing Country Participants in total. The preparation grants approved at the Partnership Assembly meeting in Barcelona will be used to prepare full-fledged proposals that will, when approved, also be funded by the PMR. Source; World Bank

Isra-Mart srl : Voluntary carbon market climbs on trees

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The voluntary carbon market climbed to record volumes of emissions reductions last year, bouncing back from worldwide recession on the back of corporate social responsibility demand and the rise of forest-based offset supply. This picture emerges from the State and Trends of the Voluntary Carbon Markets 2010, published this week by Ecosystem Marketplace and Bloomberg New Energy Finance.

Organisations voluntarily choosing to offset their carbon emissions drove trading higher with the departure during the year of North American pre-compliance buyers, exiting the market after the failure of US legislative attempts to implement a national emissions cap and trade scheme. Volumes reached 131 million tonnes, up 34 per cent on the previous recession-hit year and surpassed pre-recession levels.

The rise in the voluntary market is set against a decline in the overall global carbon market, dominated by mandatory emissions trading schemes, in particular the EU-ETS. According to the World Bank, global carbon trading volumes shrank 10 per cent in 2010 whilst market value slipped $2 billion to $142 billion.

The rosy picture of rising voluntary-market volumes is tempered by the contribution of a large, one-off, 59-million-tonne transaction of low-priced Chicago Climate Exchange credits as that market ground to a halt during 2010. This accounted for almost half the volumes in the market and won’t be repeated, raising questions as whether overall market growth can maintained in 2011.

The average price paid for voluntary offset credits slipped from $US6.50 to $6 which meant that the value of voluntary market trades last year rose only marginally despite the increased volumes. Estimated value of the market was $424 million. The vast bulk of transactions were over the counter rather than exchange-traded, reflecting the demise of the CCX and occurred despite the emergence of new exchanges offerings.

On the supply side, forest-based credits jumped to capture 45 per cent of transactions, up from 21 per cent the previous year, courtesy of the rise of avoided deforestation activity as the emerging REDD+ effort builds up steam. REDD projects alone almost tripled in market share of project activity to 29 per cent. Much of this activity was underpinned by new REDD methodologies approved by the Verified Carbon Standard (VCS), leaders in this field, and provider of third party verification to one in every three of all voluntary carbon credits generated in 2010.

The report authors say the surge of REDD activity led to unprecedented market activity in the developing world. This included a doubling of credits from Latin America, as well as more than doubling of the number of project developers and buyers headquartered in Asia, Latin America and Africa, thus laying the foundation for long-term growth in the Global South.

Isra-Mart srl : Uncertainty puts paid to global carbon market growth

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The World Bank’s annual global carbon market review reveals that 2010 saw the end of five years robust growth, with the market falling slightly compared to 2009 to $142 billion.
The report puts the decline down to uncertainty over market conditions beyond 2012 and a lack of momentum behind efforts to set up cap-and-trade schemes around the world.
“The global carbon market is at a crossroads. If we take the wrong turn we risk losing billions of lower cost private investment and new technology solutions in developing countries,” says Andrew Steer, World Bank special envoy for climate change. “This report sends a message of the need to ensure a stronger, more robust carbon market with clear signals.”
The EU emissions trading system (ETS) remains the largest sector, with 84% of the market, and the report authors predict the virtually all future demand will be from European governments.
The report warns that the supply of carbon credits between 2013 and 2020 through existing projects will be sufficient to meet demand, leaving little incentive for developers to invest in additional projects.
“Carbon market growth halted at a particularly inopportune time: 2010 proved to be the hottest year on record, while global emission levels continued to rise relentlessly,” says Alexandre Kossoy, World Bank financial specialist.
He goes on, though, that national and local low-carbon initiatives are picking up in both developed and developing nations, offering the potential to overcome future uncertainties.

Thursday, June 2, 2011

Isra-Mart srl: Australia govt warns climate change threatens Kakadu park

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Australia warned on Thursday that its World Heritage-listed outback Kakadu wetland, made famous in the "Crocodile Dundee" films, was at severe risk from climate change, as the government faced a growing battle to introduce a carbon tax.

Prime Minister Julia Gillard's one-seat majority government is embroiled in an increasingly acrimonious climate policy debate, pitching mining magnates against environment activists including Oscar winning Australian actress Cate Blanchett.

Gillard, struggling to sell her plan to cut greenhouse emissions through a carbon tax and emissions trading, said without global action one of Australia's major tourist areas, Kakadu, would eventually be devastated by rising seas.

"Salt water will get into the fresh water in Kakadu, changing the ecology, being a real risk for the native animals that live there, being a real risk for the indigenous communities that still rely on this ecosystem for their bush tucker," Gillard said, referring to native foods.

Gillard's Labor plans to introduce a carbon tax on 1,000 of the country's biggest polluters in 2012, transitioning to emissions trading three to five years after that.

Isra-Mart srl: Electric struggle for bigger payment

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POWER supply from Victoria's Yallourn Station would become less reliable and the plant would close sooner if the Gillard government offers electricity generators less than the $3.3 billion in compensation included under the Rudd government's emissions trading scheme, says its chief executive, Richard McIndoe.

The electricity industry is intensifying its lobbying campaign as the multi-party committee finalises the carbon tax deal. The Greens and a climate advisor, Ross Garnaut, are arguing electricity generators should get no direct compensation.

The government and industry have been negotiating over three compensation options: loan guarantees, direct payments and payments to brown-coal generators to close. Their capacity would be replaced with cleaner gas generation. If direct payments remain part of the compensation offer, they will almost certainly be lower than under the Rudd government scheme.

But in an interview Mr McIndoe - who heads Truenergy - said the Rudd government scheme had been inadequate.

While Truenergy's Yallourn Station would be a candidate for a federal government buyout, Mr McIndoe said the overall effect of the ''pay to close'' option would be that black coal-generated power from NSW would replace the mothballed brown-coal power stations in Victoria, leaving Victorian households and businesses vulnerable if the interstate interconnection broke down.

And a carbon tax of about $25, without significant transitional assistance, would have a big impact on Yallourn, which supplies 22 per cent of Victoria's power. ''Yallourn has a life through to 2032. We continue to invest in Yallourn to date … but the carbon price mooted at the moment would cause a significant impairment to our equity and we would probably reduce the ongoing investment on the basis that it wouldn't be making significant cash earnings … That would change its life expectancy and … affect its reliability.''

The company would have to advise shareholders of the financial impairment and its consequences when the carbon tax became law.
In his final report, Professor Garnaut said he believed the threat to energy security from the financial impact of a carbon price were ''low, if not negligible''.

Mr McIndoe said Professor Garnaut ''has his views like any other guy in the street has his views'' but was not as informed as people in the industry or the market regulators who had warned of potential problems.

Informal meetings of the multi-party committee continue as the government tries to finalise a deal by the end of the month.

One of the most divisive issues has been how the 2011 legislation should pave the way for the switch from a carbon tax to a carbon market by 2015, because of the long-standing and intractable differences between the Greens and Labor about what 2020 emissions target a trading scheme should meet.

Isra-Mart srl: Australia warns climate change threatens Kakadu park

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Australia warned on Thursday that its World Heritage-listed outback Kakadu wetland, made famous in the "Crocodile Dundee" films, was at severe risk from climate change, as the government faced a growing battle to introduce a carbon tax.

Prime Minister Julia Gillard's one-seat majority government is embroiled in an increasingly acrimonious climate policy debate, pitching mining magnates against environment activists including Oscar winning Australian actress Cate Blanchett.

Gillard, struggling to sell her plan to cut greenhouse emissions through a carbon tax and emissions trading, said without global action one of Australia's major tourist areas, Kakadu, would eventually be devastated by rising seas.

"Salt water will get into the fresh water in Kakadu, changing the ecology, being a real risk for the native animals that live there, being a real risk for the indigenous communities that still rely on this ecosystem for their bush tucker," Gillard said, referring to native foods.

Gillard's Labor plans to introduce a carbon tax on 1,000 of the country's biggest polluters in 2012, transitioning to emissions trading three to five years after that.

But Gillard needs to convince a handful of Green and independent MPs, who hold the balance of power, to back the scheme, and has yet to convinced voters to support the policy.

Opinion polls say some 60 percent of voters oppose a carbon tax, with only 30 percent in favor. Gillard's failure to deliver her climate policy would be seriously damaging to her and her Labor party, with elections due until 2013.

Mining firms warned this week that the planned carbon pollution cutting scheme would slash investment, output and jobs, demanding the minority government enter talks to recast its ideas.

In a TV campaign this week, Blanchett called on Australians to finally act against climate change, while opposition leader Tony Abbott has ratcheted up his attacks on the policy, visiting factories and warning of grocery price rises and job losses.

Without strong world climate action Australia, the driest inhabited continent, would suffer some of the worst consequences from rising global temperatures, Gillard said.

The Kakadu Park, a crocodile-infested area near the Alligator Rivers Region of the Northern Territory, covers an area half the size of Switzerland and is one of very few places World Heritage listed for both cultural and natural values.

A government-commissioned report modeled the impacts of sea level rise on Kakadu's South Alligator River system for 2030 and 2070, and found rising sea and storm tide levels would carry the sea into fragile freshwater habitats.

Climate scientists have previously warned the country's Great Barrier Reef won't be spared either, its coral a victim of rising ocean acidity from higher carbon dioxide levels from burning fossil fuels and felling forests [ID:nL3E7GN09J]

"The landscapes and native wildlife we know and love will inevitably change. Our challenge is to minimize the dangers, the impacts and the risks," Gillard said.

The report was released as a key committee of lawmakers, including Greens and independents backing Gillard's Labor against a conservative opposition hoping to force fresh elections, try to agree on carbon price details.

The committee was looking at a price of between A$18 and A$23 ($19.10-$24.40) per tonne, the Australian newspaper said on Thursday, without naming sources.

A carbon price of A$18 to A$23 a tonne would collect between A$8 billion and A$10bn a year and would be between the A$26 recommendation by the government's main climate policy adviser and calls by the mining industry for a price of A$10 per tonne.

The government, wary of its precarious support and recent polls putting conservatives ahead, has promised compensation for households, as well as trade-exposed industries, and said it would unveil full details of its plans in July.

The conservatives opposition says it would repeal a carbon tax if elected, as well as any income tax cuts linked to the scheme.