Tag Archives: economy
California Calling: Australia Isn’t Alone On Carbon Action
Tony Wood 2 Aug, 9:32 AM The Conversation Australia will not be linking its emissions trading scheme to California any time soon. But Australia will have to increase its emissions reduction targets to between 15-25 per cent below 2000 levels by 2020, following climate action by the European Union, US, Canada, and China. At a public seminar hosted by Grattan Institute earlier this week, the chairman of the California Air Resources Board destroyed two myths. Mary Nichols, one of Time Magazine’s 100 most influential people, demonstrated that the world is moving on climate change and that cap-and-trade emissions trading schemes are well and truly alive. However, political uncertainty regarding the future of Australia’s emissions trading scheme means that, for California, linking the Australian and Californian schemes, and by extension the EU scheme, are not an immediate priority. So, what can we learn from California and from climate action around the world? California dreaming This year President Obama resorted to regulation to ensure that the USA meets its target to reduce greenhouse gas emissions by 17 per cent below 2005 levels by 2020. Professor Ross Garnaut joined Mary Nichols at last night’s seminar and noted that, before its election, the Obama administration had been looking to cap-and-trade as the most efficient and lowest cost way to reduce emissions. Having failed to get that legislation through Congress, they accepted that regulation would be necessary , albeit inefficient and higher cost. However, individual states have flexibility in how they proceed, and California has adopted an ETS . Its target is to scale back emissions to 1990 levels by 2020. The scheme became operational from January 1 2013, and there have been three auctions of carbon allowances to date. The scheme now covers electricity, cement, refineries and other large industries, with natural gas and transport to be included from 2015. The scheme also covers emissions produced in other states to generate electricity consumed in California. Permits are currently trading above US$13 per tonne, and the scheme includes mechanisms to support companies so they don’t move operations elsewhere to avoid the carbon price. Linking to Quebec From January, 2014 the Californian scheme will be linked with Quebec’s cap-and-trade scheme . Mary Nichols made it very clear that this linkage had been carefully planned, and that there is close alignment between both schemes on the important design elements. While Quebec will auction its permits, in contrast to California’s decision to allocate most of its permits for free, this does not affect the value of the permits in the carbon market place. It will be interesting to see if and when other US states follow the Californian example, rather than go down the higher cost, regulatory route. While in Australia, Mary Nichols signed a Memorandum of Understanding with the chair of Australian Climate Change Regulator, Chloe Munro, to guide collaboration between the agencies in addressing the global issue of climate change. Both agencies intend to learn much from each other’s experiences in implementing an ETS. What about China? Discussion regarding international action on climate change and policies doesn’t make sense without considering China, now the world’s biggest emitter. Both Mary Nichols and Ross Garnaut highlighted progress being made in China to reduce the emissions intensity of its economy. Measures include shutting down old, dirty coal-fired power plants, constraining coal consumption, supporting renewable energy and introducing pilot ETS programs . At a conference on Tuesday, Xie Zhenhua, the vice chairman of the National Development and Reform Commission, said China could spend nearly $US300 billion on renewable energy in the current five-year plan. He also confirmed that, in 2015, the government will gradually expand the carbon trading pilot program towards the creation of a national market. Australia doing its part In Australia, both the government and the Coalition support Australia’s international commitment to reduce emission by 15-25 per cent below 2000 levels by 2020, conditional on international action. The actions being taken by the European Union and countries such as the US, Canada and China demonstrate that this commitment will need to be formally triggered. It may not be as neat as many environmental activists might wish, but global action on climate change is well beyond the claims of sceptics and those opposed to Australia’s playing its part in this action. In April, 2011 Grattan Institute’s report, Learning the hard way: Australia’s policies to reduce emissions , concluded that only an economy-wide carbon price can achieve the scale and speed of reductions required for Australia to meet its 2020 commitments without excessive cost to the economy or taxpayer. Adoption of this approach by an increasing range of governments suggests that this conclusion is the right one. Tony Wood is Program Director, Energy at Grattan Institute. He owns shares in a number of companies, both directly and via his superannuation fund. Some of these could be impacted positively or negatively by the policies associated with this article. This article was originally published at The Conversation . Read more: http://www.businesss…n#ixzz2atkOUETC Continue reading
Carbon Capture and Storage: Is There a Future?
And is it all about the money? M.J. Huijbers LLM EHS Consultant Enhesa Carbon dioxide emission reduction is moving to the forefront of priorities in many jurisdictions to combat climate change and maintain environmental stability. In the European Union, the major goal is to reduce greenhouse gas emissions by 80-95% compared to the 1990 levels in all 28 Member States by 2050. In the European Commission’s view, it is not enough that industries reduce their greenhouse gas (including carbon) emissions to achieve this aim. The Commission is stressing that carbon dioxide capture and storage (CCS) should also be used as a mechanism. What is CCS? CCS is a process that allows carbon dioxide from large point source installations to be captured, compressed and injected into and stored underground in geological formations to prevent it from being released into the atmosphere. Currently, CCS is not actively taking place in the European Union. Many reasons like social acceptability, cost and infrastructural needs that are not yet in place cause overall scepticism. Therefore, there is a concern for the future for carbon capture and storage in Europe. The following will discuss the issues around CCS and whether it is an appropriate way to reduce greenhouse gas emissions within Europe. Problems that CCS is facing Finance Cost is the initial problem. Currently, it is more profitable for companies to buy emission allowances under the EU Emission Trading Scheme (EU ETS), which cost approximately €3 per tonne of CO2, while for CCS the price is approximately €30-100 per tonne of CO2. In addition, the funding provided under the New Entrance Reserve 300 (NER300) and the European Energy Programme (EEPR) needs the co-funding of public authorities in order to launch CCS demonstration projects. No such projects have started yet. Further, as CCS has not yet started in the European Union, no infrastructure is yet in place. Social Another problem is public opposition against carbon dioxide storage onshore. A good example is the Dutch Barendrecht case, where storage of CO2 under land would take place, was not carried out, as it was not socially accepted. The reason the project did not take place, was that civilians felt uncomfortable about having carbon stored under their land and the dangers linked to this storage. Still the decision was taken to store carbon under the land of these civilians and they felt that the decision was taken without them. In addition, scientists did not agree on whether carbon storage under land was considered to be safe and the local government opposed against the project while the national government was in favour of the project. Policies and legislation The final problem relates to current policies and legislation already in place. Under Directive 2009/31/EC on CCS, the storage company is, at least for 20 years, responsible for this storage. After those 20 years, once the CO2 storage is stable, the Member State government will take over this responsibility. However, storage companies do not want to be responsible for 20 years, because of the extensive period with which they will be liable. It should be noted that companies that capture and transport the carbon dioxide are exempted from this responsibility. Also, under the London Protocol, carbon dioxide cannot be stored underwater, because it is classified as waste. This further limits the availability of storage facilities and hinders the CCS movement. . Incentives for CCS When looking at these problems it would appear that CCS does not have a future, but this is not necessarily true. CCS also has some advantages and is an essential part of reaching the 2050 low-carbon economy goal. Some examples of CCS incentives are: – a reduction of greenhouse gas emissions. Modelling undertaken by the International Energy Agency (IEA) forecasts that CCS could contribute to a reduction of 19% of total global greenhouse gas emission reductions by 2050. This includes reductions from coal and natural gas-fired power plants, as well as all other sources. The overall goal is a reduction of 50% of global greenhouse gas emissions compared to the 1990 levels; – the oil and gas industry will get more oil and gas by injecting carbon dioxide. This is achieved by the technique of enhanced oil/gas recovery. For example, carbon dioxide is injected and this leads to an extraction of 30 to 60% or more of the reservoir’s original oil can be extracted, compared with 20 to 40% using primary and secondary recovery. (In the primary recovery phase natural pressure within the oil drives the oil towards the production wells and, with the help of pumps or other mechanisms, to the surface. In the secondary recovery phase water is injected into an oil reservoir to increase the pressure and again drive the oil towards the production wells.); – the creation of many more jobs, which is a very desirable development in times of a high EU unemployment rate. For example, the Carbon Capture and Storage Association (CCSA) states that CCS could create 100,000 jobs across the United Kingdom by 2030. This would contribute to £6.5 billion to the economy of the United Kingdom. Future of CCS? When looking at the problems and incentives of CCS it is difficult to say whether CCS has a future. Despite the financial problems, another major problem is that CCS is not yet socially accepted. Within the European Union, people do not yet fully understand why carbon dioxide should be stored under the ground and they want to see proof that health will not be negatively affected. The European Union public believes that carbon dioxide emissions have negative health effects, but this is something that will always be there to a certain amount. This is the complete opposite of Norway, where the public also finds that carbon dioxide emissions have negative health effects, but carbon dioxide emissions should be completely avoided. More specifically, in 2000, the Norwegian government resigned over the proposed construction of two gas power plants, which would lead to an increase of carbon dioxide emissions. Therefore, applying CCS is seen as a very positive development as carbon dioxide emissions are reduced and as mentioned above the good thing is more oil and gas is retrieved. However, it should be noted that storage of carbon dioxide is within the EU a major issue as the EU does not have as much storage place under the sea as Norway. Therefore, storage under land will be a necessity. In conclusion, the European Commission, together with the governments of the 28 Member States and CCS scientists should cooperate to bring the same message across, namely CCS is a bridging technology that is necessary to obtain a low-carbon economy by 2050. (See also statement of the European Commission in the Consultative Communication on The Future of Carbon Capture and Storage in Europe, COM (2013), 180 final of 27 March 2013, page 22: “CCS is at present one of the key available technologies that can help to reduce carbon dioxide emissions in the power generation sector”.) In addition, having more projects in place which show that CCS works, and is not dangerous (living on a natural gas well is more dangerous) and brings people something (such as jobs), then CCS has a bright future. M.J. Huijbers LLM is EHS Consultant for NL and partially EU for Enhesa. Continue reading
