Tag Archives: energy
China Launches World’s No.2 Carbon Trading Market
June 18, 2013 China’s cities won’t get early pollution relief from carbon trading. Photo: Getty China’s plan to set up markets to trade emissions will make it second only to Europe in efforts to put a price on pumping carbon into the atmosphere. For cities choking on the nation’s smog, expect little relief. Seven pilot carbon-trading programs are scheduled to start this year, with the first opening today in Shenzhen, followed by Beijing, Shanghai, Guangdong, Tianjin, Chongqing and Hubei. They are set to regulate 800 million to 1 billion tons of emissions by 2015 in the world’s biggest cap-and-trade program after Europe’s, according to Bloomberg New Energy Finance. China’s National Development and Reform Commission will oversee emission exchanges in a country that the World Bank says has 16 of the world’s most-polluted 20 cities. The commission is better known for setting prices than creating open markets, said Stuart Cerne, managing director at Hong Kong-based environmental business consultant Enecore Carbon. “The NDRC’s measure of success of the pilots is primarily focused on technical aspects of setting up the system, whilst the importance of an active trading environment has not been given as much importance,” Cerne said by telephone. “Because of unresolved design and regulatory issues, I don’t expect that there will be real trading in the pilots other than annual compliance and government influenced transactions.” The seven pilots agreed to regulate emissions using a cap and trade system, with companies that produce more than their allocation buying permits from companies that emit less. Shenzhen’s trading will take place on a purpose-built exchange. Forward step WWF-Australia welcomed the start of the Shenzhen trading as proof that China is stepping up efforts to tackle global warming. “China is already leading the way globally in the deployment of renewable energy and today took the first steps towards a national price and limit on carbon pollution,” Will McGoldrick, Climate Change National Manager at WWF-Australia, said. “China’s Shenzhen region will be joining 35 countries and 13 states, provinces and cities in putting a price on carbon,” Mr McGoldrick said. “If Australia scraps the carbon price it would be the first country to go backwards a move clearly at odds with where the rest of the world is moving.” Shanghai clearinghouse Shanghai’s carbon exchange plans to reduce the supply of carbon permits when prices are low and sell more when they are high “to maintain relatively stable levels,” NDRC Vice Chairman Xie Zhenhua, said in an April speech on climate legislation. Xie is China’s lead climate negotiator. Regulations governing transactions in Shenzhen are still being worked on and aren’t expected to be released by the start of trading, according to a presentation by the city. Shenzhen, one of China’s Special Economic Zones designed to promote market policies, will initially include 635 companies in its cap-and-trade program, Mayor Qin Xu said in April. Those companies discharged 31.7 million tons of greenhouse gases in 2010, 38 percent of the city’s total, according to Bloomberg New Energy Finance. A separate program to complement cap-and-trade in China was a proposed carbon tax that would be paid by consumers at the pump and on utility bills. With economic growth slowing to 7.7 percent in the first quarter, the carbon tax was put on hold after opposition from businesses and local governments. Taxing issue The tax won’t be introduced this year amid “obvious opposition,” Jia Kang, head of research at the Ministry of Finance, said at parliament’s annual session in March. Kang quoted an initial levy of 5 yuan to 10 yuan (86 cents to $1.72). Starting at that level is too low to make an impact or even meet official targets, according to research from Tsinghua University and China’s Central Compilation & Translation Bureau. The effect may be further muted since the government already sets prices for gasoline and electricity that are below market rates. The goal of the trial markets is to provide know-how to establish a national trading platform, so getting the pilot programs right is important for the political will to tackle pollution in the future, said Cerne at Enecore Carbon, which has offices in Beijing. EU assistance The European Commission, the EU regulator, signed a 25 million euro ($35 million) financing agreement in September 2012 to help set up China’s pilot emissions program. “This is an important step for an ever-closer cooperation towards a robust international carbon market and low-carbon development,” Isaac Valero-Ladron, climate spokesman for the European Commission, said in an e-mail. “This is a huge opportunity to modernize our economies, stimulate growth and create jobs in new dynamic industries with innovative technologies and clean energy.” While China’s western provinces lag behind the east in terms of wealth and development, emission trading has the potential to stifle growth, said Ge Xing’an, vice president at the Shenzhen Emissions Exchange. Trading may find less political support in poorer areas looking to attract investment. “While Shenzhen and Shanghai will meet deadlines, a place like Chongqing might lag behind,” Ge said. “While that’s not a major problem in the pilot phase, it may become a concern for the national plan.” Non-compliance The penalties for non-compliance with the new emissions program may be too low to pose a real threat, according to the Center for Clean Air Policy Europe Director Tomas Wyns, who consulted on Hubei’s carbon market design. If profits outweigh the cost of flouting the law, companies have no incentive to reduce pollution. Concern of official corruption is also on the minds of regulators. “We set up electronic systems to assign quotas to the industries,” Wu Delin, vice secretary general for the Shenzhen Municipal Government, said at a press conference in March. “This can help prevent illegal behavior of officials during the assigning of quotas.” Beijing’s worst-recorded air pollution earlier this year renewed pressure on the government, which aims to cut carbon emissions by as much as 45 percent before 2020. China’s emissions from energy use rose 6 percent last year to 27 percent of the world’s total, according to statistics published June 12 by BP Plc. That pace is less than 9 percent last year and is the lowest increase since 2008. Establishing carbon trading in China will be a herculean task given that the country’s markets are still immature, Jeff Huang, co-chair of the China working group at the International Emissions Trading Association, said in a telephone interview. China faces “a unique challenge internationalizing and upgrading their commodity markets overall, while at the same time launching a new market for carbon, something you can’t see or touch,” Huang said. Bloomberg , with Fairfax Media . Read more: http://www.theage.co…l#ixzz2WZpx2sjN Continue reading
China Carbon Permits Trade 22% Below Europe’s on Market Debut
By Benjamin Haas & Mathew Carr – Jun 18, 2013 China traded its first carbon dioxide permits for 22% less than today’s price in Europe as the nation inaugurated the Shenzhen Emissions Exchange as part of its plan to limit heat-trapping gases linked to climate change . The permits were priced from 28 yuan to 30 yuan ($4.90) a metric ton, according to Chen Hai’ou, chief executive officer and president of the exchange. That’s compares with 4.71 euros a ton ($6.30) today for European Union permits on London ’s ICE Futures Europe exchange, the world’s biggest carbon market by traded volume. Shenzhen, the first of seven test markets to start in the world’s most populous nation, is one of China’s Special Economic Zones designed to promote market policies. Its new cap and trade program will initially include 635 companies. The Shenzhen exchange traded 21,112 tons of carbon in eight transactions valued at 613,236 yuan, according to a video presentation at today’s opening ceremony. “The meager volume and pre-approved price level of today’s trades is likely to characterize the initial stages of all of China’s seven ETS pilots,” said Richard Chatterton, a London-based analyst for New Energy Finance. China had planned to start all seven pilot programs this year, with Shenzhen’s market followed by Beijing, Shanghai , Guangdong, Tianjin, Chongqing and Hubei. Some of the markets may start in 2014, Xie Zhenhua , vice president of the National Development and Reform Commission, said at today’s ceremony in Shenzhen. He didn’t disclose which exchanges are behind their original schedule. Buying Permits The new markets are set to regulate 800 million to 1 billion tons of emissions by 2015 in the world’s biggest cap-and-trade program after Europe’s, according to Bloomberg New Energy Finance. PetroChina Co., China’s biggest oil producer, and Hanergy Holding Group Ltd., a renewable-energy company, each bought 10,000 allowances today from Shenzhen Energy Group, according to the video presentation. PetroChina paid 28 yuan for its permits, while Hanergy paid 30 yuan, according to the presentation. Shenzhen City Bao’an Water Services Co. and five individuals also bought permits. The names of individuals were not disclosed. For Related News and Information: To contact the reporter on this story: Benjamin Haas in Hong Kong at bhaas7@bloomberg.net Continue reading
Soil Carbon Makes Biomass Calculations Even More Complicated
12 Jun 2013, 15:20 Robin Webster Managing forests so that wood can be burnt for energy could release large amount of carbon from the soil and increase greenhouse gas emissions, according to a new study. The government plans to ramp up the amount of power the country gets from bioenergy . In theory, generating electricity from plants, trees and crops can be carbon negative . But there’s a complicated argument going on about whether using wood to generate electricity might lead to more, or less, greenhouse gas emissions. Now, a new study from Dartmouth College has added to the controversy. It shows that harvesting forests more intensively disturbs the carbon in the soil – releasing more carbon dioxide into the atmosphere. What is soil carbon? Forests are carbon stores. About a third of the world’s global soil carbon is stored in forest soil, and around half of that is in soil derived from minerals or rocks . Disturbing the soil could mean that the carbon is released into the air as carbon dioxide. But collecting measurements on mineral soil carbon is a labour-intensive process – which means there isn’t much data out there. As a result, many carbon monitoring systems assume that mineral soil carbon is not affected by the way a forest is managed. Assessing what happens to mineral soil carbon According to the new paper, published in the journal ofGlobal Change Biology-Bioenergy, this isn’t right. Reviewing a number of recent studies in North America, it says that harvesting and then replanting forests may lead to “significant and long-term carbon losses in the mineral soil”. In one case, a forest that was clear-cut and then replanted in Nova Scotia still showed a 50 per cent loss in mineral soil carbon 30 years later. Another study recorded a “significant” decline in mineral soil carbon eight years after a hardwood forest in the United States was cut down. Co-author Professor Andrew Friedland tells Eurekalert : “Our paper suggests the carbon in the mineral soil may change more rapidly, and result in increases in atmospheric carbon dioxide, as a result of disturbances such as logging … [it] suggests that increased reliance on wood may have the unintended effect of increasing the transfer of carbon from the mineral soil to the atmosphere. So the intended goal of reducing carbon in the atmosphere may not be met.” Some caveats There are some caveats. First, this is a complicated area. The studies reviewed don’t all agree about how much soil carbon is lost when a forest is cut down. The paper also concentrates on what happens when forests are chopped down and regrown – it doesn’t look in detail at what different sorts of forest management could mean. The biomass industry argues whole trees won’t be used as a source of bioenergy anyway. Instead, it says it will use by-products from forestry like sawdust, bark and smaller trees known as thinnings. The study doesn’t address what extracting these other products from the forest could mean for mineral soil carbon. But Friedland tells Carbon Brief: “…we can say that there are suggestions that each of these different forest removal approaches will have different implications for the amount of carbon that gets mineralised, or released, from the soil to the atmosphere”. What does it mean? The authors conclude: “This debate [on how to manage forests, and the use of wood for bioenergy] must include mineral soil carbon.” Including even a “moderate forest soil carbon loss” can have a significant impact on calculating whether burning wood to make bioenergy will lead to a reduction in greenhouse gas emissions, they conclude. The paper is clearly not the last word on the bioenergy debate – but it brings a new issue into what is already a pretty involved argument. In the future, a significant amount of wood burnt in UK power stations could come from North America – so how those forests are managed will matter. Continue reading
