Tag Archives: climate-change
Free Market Is Best Way to Combat Climate Change, Study Suggests
July 15, 2013 — The best way to reduce carbon emissions and combat climate change is through the use of market forces, according to a new study. Researchers who monitored the effectiveness of the European Climate Exchange (ECX) — the world’s biggest carbon trading platform — found it to be as efficient as Europe’s two biggest exchanges, the London Stock Exchange and the Euronext Paris. Using free market platforms like the ECX to combat climate change could provide the basis for the introduction of a mandatory emissions cap and trade scheme worldwide. The report found that the value of the trades on the ECX were higher after the market closed, a sign of growing sophistication within platforms. It means that trades were made with greater confidence based upon increasingly detailed information. Researchers said there are also signs of maturity based on increased liquidity — the immediate availability of a party to trade with — and price efficiency, which means all available information is incorporated into prices so they are traded in a relatively transparent manner. The ECX was created by the EU Emissions Trading Scheme (EU-ETS) in 2005 to help the European Union (EU) achieve its obligations under the Kyoto Protocol to reduce carbon emissions. The EU set limits and issued permits for how much carbon firms could emit into the atmosphere. If companies exceed their limit, they incur regulatory penalties. To avoid this, the EU-ETS allows firms with high emissions to buy the permits of other companies on platforms such as the ECX. By creating a market, it gave firms a financial incentive to reduce their carbon emissions. Researchers said that changes are needed to ensure the EU-ETS survives Europe’s economic downturn. Since the study appears to confirm the ECX’s effectiveness, researchers say the EU-ETS should be allowed to self-adjust emission caps in reaction to changes in the Eurozone’s fortunes and industrial production. Gbenga Ibikunle, from the University of Edinburgh Business School, said: “While individual responsibility for combating climate change is important, much needs to be done to incentivise companies — especially those who emit most of the world’s carbon — to cut back too. This study shows that free market mechanisms such as the EU-ETS can be effective in doing that. Several other schemes around the world are already learning from this and adopting it as a model.” The paper is published in the International Journal of the Economics of Business . Continue reading
California Again Leads The Way, This Time With Forest Carbon Offsets
FORBES ENTREPRENEURS | 7/22/2013 Editor’s Note: David Rothschild (left) serves as a Principal of the Portfolio Team at the Skoll Foundation and manages a variety of key relationships with funded social entrepreneurs, domain experts, policy makers, corporate partners and co-funders. Karin Burns (right) serves as Executive Director of Code REDD and advocates for corporate leaders to address climate change by catalyzing the market for REDD verified emissions reductions through both voluntary and compliance carbon markets. Often misunderstood, REDD+ forest carbon offsets are a “must have” for any realistic climate-change mitigation strategy Californians are known as innovation leaders, and once again, we are on the verge of demonstrating critical leadership. Only this time it isn’t about the Internet, social networking, reality television, venture capital or electric cars. It is about stopping tropical deforestation and supporting local communities. ‘ What!? ’ you say? How is the great state of California, home of bankrupt and massive, thirsty desert cities and Silicon Valley, a place that elected such juggernauts of history as Ronald Reagan and Arnold Schwarzenegger, about to lead in avoiding tropical deforestation? Thanks to the people of California, and Arnold, in 2006 we passed the California Global Warming Solutions Act (AB32). As a result, this January the state launched its own cap-and-trade carbon market , demonstrating global leadership on climate change as well as opening doors to further innovation in green technologies and job creation. California now has an opportunity to again be an early adopter, offering polluting companies the chance to offset a small percentage of their carbon emissions by supporting reductions in tropical deforestation through a mechanism called jurisdictional REDD+ – Reducing Emissions from Deforestation and Forest Degradation. Since deforestation accounts for some 15% of global carbon emissions, reducing deforestation plays an essential role in addressing climate change. Trees perform vital functions for our climate such as absorbing and storing carbon. But they are currently not valued for these services – and it is this shortcoming that REDD+ forest carbon offsets aim to address. Entities regulated under AB32 would be able to contribute to this solution by reducing a small portion of their emissions by purchasing forest carbon offsets as part of their strategies to reduce their carbon emissions. Companies and other institutions can contribute to this effort by signing Code REDD’s Letter of Support for inclusion of REDD+ in CA’s climate policy . Carbon offsets are often misunderstood. Some claim they amount to “permits to pollute,” but this is not accurate. Offsets are necessary to achieving emission reduction goals as we transition to a low-carbon economy since they are one of the only ways to address unavoidable emissions. They are part of, and do not replace, companies’ emissions reductions efforts. To be clear, we aren’t talking a huge amount. If approved, California polluters would be allowed to offset just 2% to 4% of their compliance obligations with REDD+ offsets (only 8% can be offset in total). This means that 92% of a regulated entity’s carbon emissions must still be addressed at source. Yet this 2% to 4% would play a hugely important role—demonstrating to the world that REDD+ is a viable climate solution, and empowering local communities, protecting wildlife and slowing deforestation. And since the planet does not differentiate between CO 2 molecules – no matter where they originate – reducing carbon emission from tropical deforestation is still reducing carbon emissions – even here in California. Furthermore, California’s leadership in REDD+ is already catalyzing innovation, growth in California’s green jobs, technology development, and public-private partnerships – right here in California. It is not enough anymore for businesses to simply change light bulbs and make their buildings more energy efficient. We need corporate leaders to understand that sustainability and addressing climate change means taking that extra step needed to meet our 2020 emissions goals. It is time for more companies to recognize and adopt offset policies as an integral part of carbon emission reduction plans. REDD+ allows responsible companies to go beyond the reductions achievable in their direct operations and offset their unavoidable emissions by reducing deforestation. In addition to jurisdictional REDD offsets under AB32, through the voluntary market companies and philanthropists today can directly support high-quality, high impact REDD+ project s. REDD+ projects “done right” are transforming the economic incentives that lead to deforestation, protecting endangered wildlife and improving the lives of local communities. These projects demonstrate that REDD+ can bring greater value to forests while supporting the rights of forest peoples. To help stop climate change, we must greatly reduce tropical deforestation. And there has been significant progress . But to succeed, we need to find ways to bring greater value to living forests. REDD+ forest carbon offsets are one step in the right direction. Let’s voice our support and help the great state of California make an important and vital contribution. Continue reading
E2 Report: Biofuel Industry Will Produce up to 2.6bn Gallons by 2015
September 10, 2012 E2 Report: Biofuel Industry Will Produce up to 2.6bn Gallons by 2015 click to enlarge Biofuel production capacity has increased from 437 million gallons in 2011 to more than 685 million gallons in 2012, according to a new report from Environmental Entrepreneurs (E2). By 2015, the industry has the potential to produce 1.6 billion to 2.6 billion gallons of renewable fuel, the report forecasts. According to E2, standards like California’s Low Carbon Fuel Standard (LCFS) and the federal Renewable Fuel Standard (RFS2) create an incentive for investors and biofuel companies to continue to innovate and increase biofuel production, which in turn will drive down costs and carbon emissions. The EPA’s RFS2 requires US fuel companies to ensure that about 9 percent of their gasoline is made up of ethanol this year. The California LCFS, part of the state’s AB 32 climate change legislation, requires a reduction of 10 percent in the carbon intensity of California’s transportation fuels by 2020. It provides an incentive to produce advanced biofuels, which come from non-food based sources. E2 reports that California uses about 18 billion gallons of transportation fuel each year, and transportation fuels produce about 40 percent of the state’s annual greenhouse gas emissions. At least 27 new or retrofitted biofuel refineries are expected to come online by 2015 to meet potential demand from the LCFS and the RFS2, according to the E2 report. Three of these will be located in California, with an additional two demonstration facilities in the state. California is already home to eight advanced biodiesel facilities. Nationally, between 18,407 and 47,700 new jobs could be created by the growth in the biofuels industry if the federal Renewable Fuel Standard, along with standards in California and other states, are implemented as planned, the report says. Advanced biofuel production costs will continue to decrease as well, the organization says. According to the report, at capacity companies will produce at $0.60 to $3.50 per gallon, depending on the feedstock and technology. E2 says it’s difficult to compare advanced biofuel production costs directly to petroleum production costs, but says it expects this price range to be competitive. In August, eight biofuels groups formed the Biofuels Producers Coordinating Council , in reaction to calls to limit the RFS2 because of this year’s drought . The coalition aims to defend the renewable fuel standard. Continue reading
