Tag Archives: carbon
Africa: ‘Carbon Farming’ Makes Waves At Stalled Bonn Talks
BY STEPHEN LEAHY, 12 JUNE 2013 Uxbridge — U.N. climate talks have largely stalled with the suspension of one of three negotiating tracks at a key mid-year session in Bonn, Germany. Meanwhile, civil society organisations claim the controversial issue of “carbon farming” has been pushed back onto the agenda after African nations objected to the use of their lands to absorb carbon emissions. At the Bonn Climate Change Conference this week, Russia insisted on new procedural rules. That blocked all activity in one track of negotiations called the “Subsidiary Body for Implementation” (SBI). The SBI is a technical body that was supposed to discuss finance to help developing countries cope with climate change, as well as proposals for “loss and damage” to compensate countries for damages. The SBI talks were suspended Wednesday. “This development is unfortunate,” said Christiana Figueres, executive secretary of the U.N. Framework Convention on Climate Change (UNFCCC). Figueres also said the two-week Bonn conference, which ends Friday, had made considerable progress in the two other tracks. A complex new global climate treaty is scheduled to be completed by the end of 2015 with the goal of keeping global warming to less than two degrees C. “Governments need to look up from their legal and procedural tricks and focus on the planetary emergency that is hitting Africa first and hardest,” said Mithika Mwenda of the Pan African Climate Justice Alliance (PACJA), an African-wide climate movement with over 300 organisations in 45 countries. And where there is “progress” at the climate talks it is in the wrong direction, according to civil society. “We’ve seen many governments in Bonn call for a review of the current failed carbon markets to see what went wrong, why they haven’t actually reduced emissions and why they haven’t raised finance on a significant scale,” said Kate Dooley, a consultant on market mechanisms to the Third World Network. “If we don’t learn these lessons we’ll be doomed to repeat these environmentally and financially risky schemes, at the cost of real action to reduce emissions,” Dooley said in a statement. In Bonn, two key African negotiators appear to be pushing the World Bank agenda rather than their national interests, civil society organisations claim. Those negotiators are also working for organisations receiving World Bank funding. One appears to want African nations’ mitigation actions to be based on agriculture, they said. The World Bank and the U.N. Food and Agriculture Organisation and other organisations favour what they call “climate smart” agriculture. This is defined as forms of farming that are sustainable, increase productivity and with a focus on soaking up carbon from the atmosphere. African environment ministers from 54 nations recently stated they were not obligated to use their lands to mitigate carbon emissions since Africa is not responsible for climate change. They also instructed African negotiators at the Bonn climate talks to focus on helping African agriculture adapt to a changing climate. “Are these people serving two masters?” asked Mariam Mayet of the Africa Centre for Biosafety, which works to protect farmers’ rights and biodiversity across the continent. “What is the World Bank’s level of influence over these individuals, and is there a risk that this is impacting on their actions and the outcome here?” Mayet told IPS. In December 2011, more than 100 African and international civil society organisations sent a joint letter to African ministers asking for “no soil carbon markets in Africa”. Globally, agriculture is a major source of global warming gases like carbon and methane – directly accounting for 15 percent to 30 percent of global emissions. Changes in agricultural practices such as reducing or eliminating plowing and fertiliser use can greatly reduce emissions. Agriculture can also be used to absorb or trap carbon in the soil. When a plant grows, it takes CO2 out the atmosphere and releases oxygen. The more of a crop – maize, soy or vegetable – that remains after harvest, the more carbon is returned to the soil. Civil society organisations warn that if agriculture becomes part of a carbon market, it will spur more land grabbing in Africa, with woodlands being used mainly for carbon sequestration instead of food production. “There is a profound danger to agriculture here, with real potential for more land grabbing and expansion of monocultures in order to harvest credits,” Helena Paul of EcoNexus, an environmental NGO, previously told IPS . Soils are extraordinarily variable and different climatic regimes affect how they function, said Ólafur Arnalds, a soil scientist at the Agricultural University of Iceland. While soils are a key part of the planet’s carbon cycle, we don’t know enough about soil carbon, Arnalds told IPS at a recent Soil Carbon Sequestration conference in Iceland. That complexity does not suit carbon markets well and drives up costs of accounting and verification. However, Arnalds does believe that soils and agriculture have an important role in climate change and farmers should be compensated for their efforts. Continue reading
Carbon Trading with Chinese Characteristics
To control greenhouse gases the Chinese government is experimenting with pilot programs in seven cities and regions that use markets By Mark Nicholls NEW CITY: On June 18, companies in Shenzhen will have to meet greenhouse gas emission targets as part of a new cap and trade market experiment. Showcasing more than fifty of the most provocative, original, and significant online essays from 2011, The Best Science Writing Online 2012 will change the way… On June 18 China’s pioneering city of Shenzhen is set to notch up another first. From that day 635 companies in the Shenzhen Special Economic Zone—which in 1979 became the vanguard for China’s capitalist revolution—will start using the markets to help meet greenhouse gas emissions targets . This year, alongside the cities of Beijing, Shanghai, Tianjin and Chongqing as well as the regions of Guangdong and Hubei, Shenzhen is imposing greenhouse gas targets on hundreds of companies, ranging from power plants to airport operators. The goal is to develop a national carbon market over the next decade that could help put the brakes on the world’s largest carbon dioxide emitter. “China has internationally pledged 2020 climate targets,” observes Chai Hongliang, an analyst at Thomson Reuters Point Carbon, an Oslo-based information-provider specializing in carbon markets. He is referring to a commitment first made by China ahead of the 2009 Copenhagen climate talks to reduce its economy’s overall carbon emissions per unit of GDP to 40 to 45 percent below 2005 levels by 2020. “It has two ways to reach the target: shut down factories in the last months of 2020 or use more market-based approaches like emissions trading,” Chai adds. As with emission-trading programs elsewhere, polluters in China’s pilots have two options: First, they can meet their targets by reducing their own emissions—by investing in energy efficiency, say, or curbing production. Alternatively, they can buy carbon allowances or credits from companies that have spare allowances or from projects elsewhere in China. Shenzhen faces the toughest target. The companies in its pilot emitted the equivalent of 31 million metric tons (Mt) of CO2 in 2010. They will be allocated around 100 Mt of allowances for the duration of the three-year trial, although expected economic growth means they will have to reduce their carbon intensity by an estimated 30 percent by 2015 compared with 2010. Balancing the need for economic growth with carbon control is a challenge. Emissions in China are expected to rise for years, given the importance China’s political elite continue to place on economic growth. Some observers question how much pressure China’s planners are prepared to put on its big emitters. The pilots set emission limits from January 2013 through the end of 2015. “I think the emissions caps will be relatively lenient,” Chai says. Certainly the regulators will be eager to avoid any “carbon leakage”—that is, driving industry out of their jurisdictions through imposing too stringent targets ahead of any national program. But at this point Chai can only speculate about their stringency. Limited information is available about participating companies, their historical emissions—and even the rules under which the pilots will operate. And part of the reason is that some of these data do not exist. The problem with data To run effectively markets rely on an unimpeded flow of information, clear rules and rigorous oversight. China could both benefit from the lessons of earlier efforts, such as Europe’s flagship carbon market—the world’s largest, known as the European Union Emissions Trading System, or ETS. It is under fire from some environmentalists because of its relatively lax targets and low carbon prices, along with its vulnerability to fraud and abuse. For the regulators drawing up targets, “there are existing processes and mechanisms on energy consumption which could be drawn on, as well as local exercises in creating GHG [greenhouse gas] inventories,” says Lina Li, a Beijing-based carbon markets expert at Netherlands-based consultancy Ecofys. Her firm has advised local regulators and international donors on creating carbon market regulations and infrastructure in China. “But there are still challenges regarding emissions data at the company level.” This is exactly where the E.U. was in 2005, when it embarked on the pilot phase of its ETS—and the lack of emissions data allowed companies to game the system. E.U. governments asked companies to provide their own, unverified historical emissions data, and many inflated their numbers so as to claim more free allowances from government. This practice created an overhang of surplus permits that led to a price collapse in 2007. Generous allocations of allowances are probably inevitable as the price paid for industry acceptance, however, suggests Karl Upston-Hooper, legal counsel of GreenStream Network, a Finnish carbon asset manager that is active in China. “You will struggle to find an ETS that is not overallocated” in its early phases, he says. Indeed, he argues that the pilots in China are less about creating carbon markets and more about gathering data. “I’ve taken the view that they’re implementing an emissions-monitoring system, not a carbon market—and I’m okay with that as a first step on the road.” Most observers—including from the environmental movement—are prepared to give China’s regulators time to get things right. “It is our view that the first step for Chinese ETS is to get the system right from the beginning—the trading platform; the monitoring, reporting and verification system; [emissions] inventories; getting companies informed and cooperative—and gradually shift toward more stringent caps,” says Li Shuo, a climate and energy campaigner for Greenpeace East Asia. Plenty of studies see China’s emissions peaking by 2030. Some are more optimistic: recent ones predict 2025 to 2030. A further data challenge is whether China’s regulators will be sufficiently transparent and even-handed when it comes to the country’s carbon markets. “In Europe and elsewhere, ETS data are under public scrutiny. That may not be the case in China,” says Point Carbon’s Chai. Another concern is insufficient coordination among the seven pilots, Li says. Indeed, rivalry exists among the various authorities, with Beijing deliberately encouraging a degree of “policy competition” to test differing approaches to see which works best. Last, despite a recent announcement by the powerful National Development and Reform and Commission (NDRC) that it is to propose a national carbon cap for China’s next five-year plan, which runs from 2016 to 2020, a national Chinese carbon market is not assured. Other methods could prove more effective. “In China the ETS is not the only tool,” says Wu Changhua, Beijing-based Greater China director of the nonprofit Climate Group. She notes that the nation’s finance ministry is promoting a carbon tax whereas other government ministries are considering a system for crediting and trading energy-efficiency improvements. Wu also cautions that international media speculation around the introduction of a national carbon cap by 2016 is overblown. She argues that the NDRC is agitating for the inclusion of the concept in the next plan to ensure resources are available for more research and policy development. “One thing is for sure,” she adds. “The political leadership in China is much more serious, stronger and determined to tackle environmental problems. But it will be a journey. We’re not going to get there immediately.” Continue reading
RGGI Carbon Price Rises 15%
The 20 th carbon emissions allowance auction conducted by the Regional Greenhouse Gas Initiative (RGGI) for 9 participating northeastern and mid-Atlantic states was sold out of all 38.7 million allowances at a clearing price of $3.21 per short ton, a 15 percent mark-up from the last auction in March. The RGGI auction was held last Wednesday, and demand continues to be strong from auction to auction, as it has in other regions like California. Bids for the CO 2 allowances ranged from $1.98 to $5.55 per allowance. Winning bidders pay the price of the lowest winning bid, but allowance permits are allotted to the highest bidders first and then in descending order, until allowances are sold out. The auction generated $124.4 million for reinvestment by the RGGI states in a variety of consumer benefit initiatives, including energy efficiency, renewable energy, direct bill assistance, greenhouse gas abatement and climate change adaptation programs. The RGGI is a mandatory cap-and-trade system, established in 2009, covering the power sector in Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont. In February, RGGI states agreed to program reforms that will lower the cap by 45 percent, starting in 2014. Emissions had fallen from 2005 due to lower natural gas prices and the recession. The carbon market had been oversupplied with allowances by about 30 percent, in proportion to emissions from when it began, keeping allowance prices below $2/t for most years, according to energy and environmental analysis firm Thomson Reuters Point Carbon. The high clearing price and strong demand show that market participants are confident in the program reforms and are already planning for a carbon-constrained future, according to analysts at the firm. Last month, California raised more than $280 million selling greenhouse gas emissions permits in its third auction, with businesses paying a record $14 per metric ton for the right to release carbon this year. Continue reading
