Tag Archives: climate
The Real Politics Behind A Floating Price On Carbon
Discussion has been locked in fact-free debate for so long it’s easy to forget reducing emissions is the point of the exercise Follow Lenore Taylor BETA Lenore Taylor guardian.co.uk , Sunday 14 July 2013 A protester holds a placard during a rally in Sydney against Julia Gillard’s ‘carbon tax’. Photograph: Greg Wood/AFP/Getty Starting a “floating” carbon price one year early is not such a big deal, really. The fact that every political party is screaming about it just proves how twisted the politics of this issue has become. For Kevin Rudd , it’s a way to reboot a debate Labor has been comprehensively losing, and provide businesses and households with some very short term cost relief. The $3 billion or more the government now has to find in budget savings is the same amount business won’t have to pay for carbon permits next year. And that gets passed through to households in the form of savings of $210 a year for a sole parent on benefits, $300 to $400 a year for average couples with children and $180 a year for an aged pensioner couple, according to helpfully provided Treasury modelling. But it’s a price reduction that would have happened when the system moved into line with international prices one year later anyway. The real impact Labor is hoping for is political. For the Greens it’s an opportunity for product differentiation ahead of an election that’s looking very difficult for the minor party. But Christine Milne ‘s argument that Australia’s economic transformation will be somehow fundamentally interrupted by allowing the price to drop to international levels just one year earlier than planned doesn’t make sense. And for Tony Abbott it turns back against him his own successful blurring of the difference between a carbon tax (which Julia Gillard promised not to have) and a floating price emissions trading scheme (which has always been Labor’s policy in one way or another, and until Abbott became leader was the Coalition ‘s policy as well). A one year shift in the start of the floating price could never have resulted in front page headlines proclaiming “carbon tax to go” if it hadn’t been for Abbott’s own hard work decrying the fixed price “tax” for the last three years. For their very different political reasons both Abbott and Milne are labelling the decision a “fraud” and a “con”. But, putting the politics aside, we actually don’t yet have the most important pieces of information to make that judgement. What we really need to know is whether the government intends to keep the independent Climate Change Authority and listen to its advice about how hard we should be cutting our greenhouse gas emissions. The domestic discussion has been locked in this senseless, fact-free headbutt of a debate about “axing the tax” for so long, it’s been easy to forget that reducing emissions – probably by more than the minimum 5% by 2020 agreed by both major parties – is the point of the exercise. The “tax”, the trading scheme and even the Coalition’s “Direct Action” are all just different means to get there. If bringing forward a floating price means we can do more, while imposing lower costs on the domestic economy because the international price is lower than we thought it was going to be, surely that’s a good thing. And if Tony Abbott really thinks he has found a cheaper way to make deep, long term cuts to Australia’s emissions than can be achieved by participating in an international market, now would be the time to finally unveil the detail of his Direct Action policy to try to prove it. If Labor is keeping the climate authority and leaving open the possibility of tougher targets – by far the most important change negotiated by Milne in the deal with Julia Gillard compared with Labor’s first emissions trading scheme – are the Greens really going to stand in the way? Properly assessing Australia’s share of the global effort to slow climate change, and then figuring out how we most efficiently do it – that is a really big deal. Continue reading
AfDB Continues To Support Low-Carbon Development Pathways For Africa
By: SEM Contributor on July 13, 2013. AfDB, co-organizer of the 5th Africa Carbon Forum in Abidjan, Côte d’Ivoire TUNIS, Tunisia, July 11, 2013/ – For the fifth time the African Development Bank ( http://www.afdb.org ) was a co-organizer of the Africa Carbon Forum (ACF) along with UN agencies, the World Bank and the International Emissions Trading Association (IETA). This important forum was held from July 3-5, 2013 in Abidjan, Côte d’Ivoire. Given the challenges of the current carbon market, ACF reflected on how the Kyoto Protocol’s Clean Development Mechanism (CDM) and other mitigation and financing mechanisms have performed to date ad discussed how those mechanisms could continue to be successfully applied on the African continent. As the premier financing and development institution for Africa, committed to promoting viable financing solutions for climate-friendly development on the continent, the AfDB strongly supports the continuation and the scaling up of those mechanisms. Over 400 participants took part in the three-day program opened by Daniel Kablan Duncan, Prime Minister of Côte d’Ivoire, who expressed his support for low carbon development as a viable option for his country. “To date Africa has the lowest number of registered CDM projects representing a little more than two percent of the overall registered CDM projects worldwide and is not sufficient,” said Kurt Lonsway, Manager of the Energy, Environment and Climate Change Department at the African Development Bank. He added: “We hope that continuation and strengthening of CDM will facilitate the participation of many more on the continent.” During the first Plenary Session on CDM: Achievements and Lessons Learned; The Future of the Mechanism moderated by Lonsway, he polled the audience twice on whether they felt that the CDM had a future in Africa. Just over half were positive demonstrating that important improvements will be required to reduce transaction costs and simplify requirements for African countries to access the mechanism. The AfDB has embarked on an ambitious program at powering a low-carbon pathway in Africa. Through the Energy, Environment and Climate Change Department, the Bank serves as a platform to deliver advisory services necessary to mobilize transformative environment and climate finance, including helping countries and project gain access to carbon markets. Funds channeled through financing windows such as the Climate Investments Funds (CIF), the Global Environment Facility (GEF), a recently created Sustainable Energy Fund for Africa (SEFA), the first phase of African Carbon Support Programme (ACSP), and the new Africa Hub of the Sustainable Energy for All Initiative (SE4ALL) are directly invested to support the transport, communications, agriculture, water and energy sectors. The goal is to ensure that climate finance effectively reaches the continent and is tailored to Africa’s needs. During the 5th Africa Carbon Forum, the latest developments of the regulatory framework, including possible new market-based mechanisms to enhance the cost-effectiveness of climate mitigation actions, were discussed and debated. Diverse mitigation instruments such as domestic cap-and-trade, low-emission development strategies and nationally appropriate mitigation actions were highlighted. The Forum also stressed the growing interest in low-carbon development finance opportunities and the commitment of the development partners to support them on the continent. Distributed by the African Press Organization on behalf of the African Development Bank (AfDB). Continue reading
Carbon Market Slump Worries Policy Makers
Jul 10, 2013 From wire reports CLEAR SKIES: Emissions prices in the $72 billion cap-and-trade program have fallen more than 70 percent in the past 4 years. VILNIUS – The European Parliament approved a plan intended to reduce a record glut of permits and increase prices in the world’s biggest carbon market after they slumped to an all-time low, reports Bloomberg. European Union carbon allowances rose the most in two months after lawmakers in Strasbourg, France, endorsed a revised version of a plan known as backloading advanced by the European Commission, the region’s regulatory arm. That was the Parliament’s second verdict on the measure, which would delay the sale of some permits to support prices after it blocked the plan in April, triggering a 45 percent slump. “It’s a good signal that Parliament voted this through today,” Oeystein Loeseth, chief executive officer of Vattenfall, Europe’s biggest emitter after RWE, said by telephone. “When you take volumes out of the market, prices will increase.” Emissions prices in the $72 billion cap-and-trade program have lost more than 70 percent in the past four years. The euro area’s record-long recession reduced demand for pollution rights and worsened a glut that swelled to about 2 billion metric tons in 2012, according to the EU. That’s almost equal to the region’s annual limit imposed on 12,000 power plants and factories. The caps were set before the financial crisis. EU allowances for delivery in December gained 9.3 percent, the biggest jump since May 3, to close at 4.69 euros a ton on the ICE Futures Europe exchange, after falling on July 3 by as much as 24 percent before the vote. The contract slumped to a record 2.46 euros on April 17, the day after the Parliament blocked the emergency fix in its first plenary vote. Lawmakers endorsed the plan 344 to 311, with 46 abstentions, according to the voting result. “The backloading plan has passed its largest hurdle so far, but auction curbs are still far from certain and unlikely to start before mid-2014,” Itamar Orlandi, an analyst at Bloomberg New Energy Finance in London, said on July 3 by e-mail. “The focus will now shift from Strasbourg to Berlin, as Germany’s decision on the plan will determine whether it can go ahead.” Traders will now focus on positions of national governments, whose consent is also needed to enact the plan, according to Ingo Ramming, co-head of commodity solutions at Commerzbank in London. “Markets are hoping on a fast-track decision to regain confidence in the EU emissions trading scheme,” he said July 3 by e-mail. “We would expect that prices are capped in the mid-term around 6 euros on the back of uncertainties on the European economy, supply from industrials and auctioning.” Permits may rise to 5.20 euros after the approval, according to the median forecast of nine analysts and traders surveyed by Bloomberg News before the vote. The assembly rejected amendments seeking an earlier return of the delayed permits to the market and earmarking 600 million allowances for a special fund to promote low-emissions technology. It backed a proposal to cap backloading at 900 million permits and limit the planned intervention in the carbon market to an exceptional, one-time move. The delay in sales of permits may be enacted under the condition that it has “no significant impact” on companies prone to relocating production to regions without emission curbs, lawmakers decided. “This is more bullish than the market had anticipated,” Konrad Hanschmidt, an analyst at BNEF, said on July 3 by e-mail. The backloading strategy has divided policy makers and industry. Opponents of the fix, ranging from Poland to steelmaker ArcelorMittal, say it pushes up energy costs during an economic slump. The EU commission and companies including Royal Dutch Shell say intervention is needed to bolster prices that are too low to stimulate investment in clean technology. “Yes!” EU Climate Commissioner Connie Hedegaard said on her Twitter Inc. account. “Despite heavy-handed lobbying, and after very substantial debate, the European Parliament supports the backloading proposal.” The decision in favor of backloading on July 3 authorizes Matthias Groote, the lawmaker overseeing the measure in the Parliament, to start talks with representatives of national governments on the final wording of the legislation in a fast-track procedure. The outcome of the talks will need official approval by the Parliament and EU ministers. Lithuania, which holds the EU rotating presidency and will represent member states in the negotiations, is ready for a “constructive dialog” on the carbon fix, the Baltic country’s Environment Minister Valentinas Mazuronis said in an e-mailed statement. He said he was confident the measure can be dealt with “effectively and expeditiously.” The Parliament’s decision to block the faster return of permits to the market and the creation of the innovation fund will make talks with member states easier, Peter Liese, a German Christian Democrat member of the Parliament, said after the vote. “It’ll go very fast after the German elections,” he said in an interview. Member states may decide about their position by “early fall,” according to Arunas Vinciunas, Lithuania’s Deputy Permanent Representative to the EU. While most EU countries favor backloading, they are short of the qualified majority needed to approve the proposal because several nations, including Germany, remain undecided. Chancellor Angela Merkel said in May she hoped that Europe’s biggest economy would be able to tackle the plan soon after elections on Sept. 22. “It is crucial to get structural reforms quickly off the ground to ensure the emissions trading system will be sustainable and predictable,” Bernhard Guenther, chief financial officer of RWE, said on July 3 in an interview. “We need to know what the political framework for investments in 2020 and ahead will look like and which climate and reduction targets have to be achieved.” Continue reading
