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We’re Putting A Price On Carbon, But Is It Making A Difference?
More than 20% of global emissions are now either taxed or traded. But the question remains: will adding economic incentives to cleaner energy actually work? Putting a price on carbon emissions is seen as crucial to curbing climate change. And the good news is that much of the world is doing just that (though not the U.S.). A new report from the World Bank identifies 40 national, and 20 sub-national, mechanisms globally. The European Union, South Korea, Australia, and New Zealand all now have emissions trading systems, or are implementing them. Other countries, like Denmark, Finland, Ireland, Japan, Norway, and South Africa have (or are implementing) carbon taxes. And then there are regional trading initiatives, such are those in California and Quebec. The fact that so many carbon pricing schemes have emerged shows a political will to mitigate greenhouse gases. Altogether, current schemes cover more than 20% of global emissions. And with China, Brazil and Chile all considering carbon trading, the prospect is for far more to be covered–perhaps up to 50%. “The fact that so many carbon pricing schemes have emerged shows a political will to mitigate greenhouse gases as countries increasingly use carbon pricing to deliver benefits both to our climate and to a sustainable economy,” says Joëlle Chassard, of the World Bank’s Carbon Finance Unit. “A transition towards a new generation of carbon markets is in the making.” What is more, the World Bank sees hopeful signs in links between schemes: for example, between E.U. and Australian systems, and California’s and Quebec’s. In time, such relationships could be a “step towards establishing a global carbon market,” it says. And, newer entrants are learning from earlier mistakes. The price of carbon in the EU’s system has collapsed several times, notably during the recession. So, the new schemes are putting in “price floors,” or stopping participants from hoarding allowances (a major problem in Europe). Still, the Bank isn’t exactly confident about averting dangerous global warming–which is the question that matters. “The international community has agreed to limit the increase in average global temperature to 2 degrees Celsius (°C) above pre-industrial levels,” it says. “The current level of action puts us on a pathway towards a 3.5–4°C warmer world by the end of this century.” And, the effectiveness of mechanisms like carbon trading remains in doubt. Emissions in Europe–our best test case–have fallen. But this was in a faltering economy, when businesses and individuals use less energy. A price in itself is meaningless; what matters is the number. So, it’s good news that more of the world is pricing carbon. But we should be wary about banking the outcome. http://www.fastcoexist.com/ Continue reading
Turning Plant Matter into Fuel
Posted on June 18, 2013 by Joanna Schroeder Charles Wyman, a University of California Riverside professor in the Chemical and Environmental Engineering Department, recently edited a book, “ Aqueous Pretreatment of Plant Biomass for Biological and Chemical Conversion to Fuels, ” that provides in-depth information on aqueous processing of cellulosic biomass into fuel. The just-published book focuses on aqueous pretreatment of cellulosic biomass to promote sugar release for biological, catalytic, or thermochemical conversion into fuels and chemicals. Introductory chapters provide the rationale for converting biomass to fuels; its importance to national security, balance of trade, and the environment; and insights into biological and catalytic processing to fuels. Also included are in-depth information on the chemistry and biology of cellulosic biomass, leading pretreatments to facilitate its biological and chemical conversion to sugars, and methods important to assess the effectiveness of biomass conversion technologies. In recent decades, interest in converting cellulosic biomass to fuels has closely tracked the price of petroleum: support jumps when petroleum prices are high and wanes when prices drop. “That creates a big challenge,” Wyman said. “The volatility of oil prices and associated enthusiasm for alternatives results in a very unstable environment in which to build a business.” Yet, cellulosic biomass conversion has unique and powerful benefits. It has the potential to substantially reduce greenhouse gas emissions and imported petroleum dependence and is widely available and inexpensive. For example, cellulosic biomass costing $60 per dry ton has about the same cost per energy content as petroleum at about $20 per barrel. “The challenge is, and has always been, reducing the cost of breaking down cellulosic biomass into sugars and other fuel precursors that can be converted into products, and aqueous pretreatment plays a pivotal role for leading biological, catalytic, and thermochemical routes” Wyman added. Wyman’s passion for renewable energy was first expressed through a junior high school science fair project focused on solar energy storage. It grew as he earned a Ph.D. in chemical engineering at Princeton, became a leader in biomass conversion at the Solar Energy Research Institute, now known as the National Renewable Energy Laboratory, and as an endowed professor at Dartmouth College. Today, he is also holds the Ford Motor Company Chair in Environmental Engineering in the Center for Environmental Research and Technology (CE-CERT) of the UC Riverside Bourns College of Engineering . In 1996, during his tenure at National Renewable Energy Laboratory, he edited the book Handbook on Bioethanol: Production and Utilization. He also co-founded Mascoma Corporation , a startup company focused on advanced technology for biomass conversion to ethanol, in 2005. Continue reading
Explainer: China Carbon Trading Schemes Kick Off
By Erwin Jackson on 18 June 2013 The first of the seven planned Chinese pilot emission trading schemes, in Shenzhen, is to be launched today. While China has been indirectly pricing carbon for years, this scheme will be its first mandatory carbon market. Second largest emissions trading scheme in the world Pilot emission trading schemes are planned to start this year in Beijing, Chongqing, Guangdong, Hubei, Shanghai, Shenzhen and Tianjin. These pilots are expected to cover around 700 million tonnes of CO2-e by 2014, which is a fraction of China’s total emissions, yet are still very significant. By comparison, Australia’s carbon price covers around 380 million tonnes, California’s 165 million tonnes and Europe’s 2.1 billion tonnes. (See Table 2 for comparison with Australia.) China plans to implement a national scheme around 2016 based on the lessons learned from the pilot schemes. China is implementing a range of policies to address climate change, energy security and air pollution. If projections are accurate, these policies (see list of efforts on page 2) since 2005 will deliver a reduction in emissions of 4.5 billion tonnes of CO2 in 2020. This would be the largest single absolute reduction for any country in the history of action on climate change, and would equivalent of closing 1,000 500MW coal-fired power stations for a year. Note also that China’s unabated appetite for coal is overstated. China has been the world’s largest investor in coal over the last decade but the nation’s energy use is undergoing significant change. In 2011 coal plant investment was less than half of what it was in 2005. Inefficient coal generation have been progressive closed and last year coal consumption grew only 2.5 per cent compared to nearly 12 per cent in 2011. Renewable energy accounted for over 19 per cent of generation in 2012 and combined with nuclear, accounted for over 90 per cent of all electricity generation growth last year. Spotlight on Shenzhen Shenzhen is one of the China’s Special Economic Zones, located next to Hong Kong. It is home to around 11 million permanent residents. The region is seeking too to build an advanced carbon finance centre. In 2011, its GDP was around $178 billion and per capita incomes were around $17,000. Total emissions are estimated to be around 83 million tonnes in 2010 (compared to around 570 million in Australia). Rules will differ between the pilot schemes to allow China to experiment with different emission trading scheme designs (see table 1). Shenzhen has committed to reduce the emissions intensity of its economy by 21 per cent below 2010 levels by 2015. Like the schemes in other major economics, Shenzhen’s market has an absolute emission limit. This is around 32 million tonnes. This distinguishes it and other schemes from New Zealand’s emission market or the Coalition’s Emission Reduction Fund, which do not have a regulated cap on emissions. The scheme will cover all companies with emissions over 20,000 tonnes of CO2-e and around 40 per cent of total emissions. It covers 26 sectors, including electricity and natural gas, water supply and industrial manufacturing. Initially emission permits will be allocated to companies for free but this will be progressively reduced through time and income from the carbon price to be used to support the development of new carbon reduction technologies and projects. Companies that pollute more than they are allowed will have to buy credits from those that reduce emissions below their targets. Companies will be charged three times the market price for each tonne of CO2 they emit over their cap if they fail to deliver enough credits. It is unclear at this point whether carbon prices for traded units will be public in the short-term. Reasons for action Chinese officials have cited numerous reasons for their climate action, including an effort to build energy security, reduce air pollution, foster new industries and contribute to global emission reductions. China’s significant investment in clean energy, for instance, has helped the emerging economy leapt ahead of countries like the United States in its ranking among the G20 nations in its ability to compete in a global low carbon economy. This year China ranked 3rd, up from 7th last year. If China had not increased its clean energy investments, it would be in 8th place. Renewable energy in particular has had exponential growth. From having virtually no industry in 2005, China now has the largest installed capacity of wind power in the world and is the world’s largest producer of solar modules. China is now the world’s largest investor in renewable energy with around $65 billion invested in 2012. Between 2009 and 2011, China invested more money in renewable energy than it did in coal fired generation. Is it enough? Despite China’s recent efforts under current energy projections, emissions and coal use will keep growing until at least 2020. This is not inconsistent with a world seeking to avoid a 2°C increase in global temperature as long as an emissions peak by around this time. Erwin Jackson is Deputy CEO of The Climate Institute Continue reading
