Showing posts with label Bonn. Show all posts
Showing posts with label Bonn. Show all posts

Tuesday, June 21, 2011

Governments must work harder to avoid global catastrophe

Governments of developed countries must work harder to secure a climate pact to succeed the Kyoto Protocol, and avoid an approximately 3.2 degrees rise in average global temperatures this century.

Christiana Figueres, head of the U.N. Climate Change Secretariat, made this call last Friday, at the end of two weeks of fraught and only slightly productive climate talks in Bonn.




"There is a growing realisation and acknowledgment that resolving the future of the Kyoto Protocol is essential this year and will require high level political guidance," Figueres said.

Ambassador Jorge Arguello of Argentina, Chairman of the Group of 77 and China (G77) agreed, adding, "The chance to reach a successful outcome in Durban to consolidate and strengthen the climate change framework still depends on the level of political will that Parties can show."

Durban is the location of the next top level meeting in November/December. The EU and others have now conceded that an all-encompassing agreement on binding carbon emissions is unlikely to be achieved there.

What is the scientific position?


According to Climate Action Tracker, based on current commitments by nations, the world is headed for an approximately 3.2 degrees rise in average temperatures this century.

Dr. Sivan Kartha, senior scientist at the Stockholm Environment Institute (SEI), said that while developing countries have made credible commitments to address their part of the emissions gap, developed countries' promises are such that, with the current accounting loopholes on the table, their emissions could actually increase when they should be rapidly declining.

"You can't negotiate with science," he said. "You can't negotiate with the Earth's natural limits. At the moment, emission reduction pledges take us far over those limits."

Some progress made


The Kyoto Protocol remains fundamental and critical to success because it "establishes the key rules to quantify and monitor the mitigation efforts of countries" and "contains the market-based mechanisms which allow countries to reach their mitigation levels at cost effective levels," Figueres said in her concluding remarks to the conference.

"Climate [change talks] are the most important negotiations the world has ever seen, but governments, business and civil society cannot solve it in one meeting," she added, in response to criticism that progress is too slow.

Some progress was made at Bonn, on technical issues such as designing a scheme for sharing clean energy technologies, on a system for the measurement, reporting and verification (MRV) of national emissions, on the financing of a $100bn-a-year Green Climate Fund to support adaptation and emission reduction efforts in developing countries, as well as in forest protection and carbon markets.

Despite this, developing nations are feeling that they must resign themselves to expect a weaker deal from the developed world.

"This process is dead in the water," commented Yvo de Boer, former head of the United Nations Framework Convention on Climate Change (UNFCCC) during the talks. "It's not going anywhere".

Pablo Solon, head of Bolivia's delegation added that "there has been no advance in the substantive issue of pledges for reductions in emissions" by developed nations.

The minimum goal envisaged by developing nations is for a core group, led by the European Union, to extend the Kyoto Protocol.

Canada, Japan and Russia have all said they will not sign up to a second commitment period, and the world's two largest greenhouse gas emitters - China and the United States - are not bound by the Protocol. This leaves the European nations as the keystone nations upholding it.

During negotiations, the EU was challenged to sign up to the second period unilaterally, but the European Commission negotiator, Jurgen Lefevere, said renewal of the Kyoto Protocol alone "is not going to cut it", since it accounts for just eleven percent of world greenhouse gases. "We need a solution for the remaining 89 per cent as well," he observed.

The problem of transport


There is one big issue on which China and the United States, the world痴 two biggest emitters, agree: they both oppose the EU's scheme to regulate and reduce emissions from air and marine transport (known as 澱unker emissions.

These emissions were excluded from the Kyoto Protocol because countries could not agree on what to do about them.

They are the subject of a UNFCCC working group which made little progress at Bonn, as they are stalled pending the result of a legal case.

Earlier this year, the EU has got fed up with waiting for these sectors to take action on reducing their own emissions and proposed that they be included in the revised EU Emissions Trading Scheme (EU-ETS) from 1 January 2012.

China and four US airlines are challenging this in the courts and the European Court of Justice is to hear the case in July. The Court will probably not issue its judgment before the EU-ETS enters into effect. Until it does, the UNFCCC working group feels it cannot move forward.

Meanwhile, a proposed objective to cut the EU's transport emissions by 60% by 2050 was considered "too ambitious" by a majority of the EU's 27 transport ministers, meeting in Luxembourg last week, who want the goal to remain aspirational. They believe it would disadvantage European companies compared with their competitors in Asia or the US.

"In order to maintain the Union's competitiveness, similar commitments should be sought at international level. Today there are no alternative to fossil fuels [that is] competitive in terms of technology and price," ministers admitted in a statement.

It is the newer Eastern European members who are the most opposed to a binding 60% target. Others, such as Austria, believe it is achievable and should even be increased.

Soil carbon


Observers at the talks reported that some countries were introducing new market-based proposals such as 'soil carbon' markets into the negotiations which were unproven and had delayed the talks.

Michele Maynard, Policy and Advocacy Officer of thePan African Climate Justice Alliance (PACJA) said, "These markets are a false solution that will only fuel the land-grab in Africa and seriously undermine the ability of poor Africans to feed themselves."

Kate Horner, senior analyst at Friends of the Earth (US) said the United States continues blocking progress on the most important issues in negotiations, including how they will meet their pledges to the Green Fund.

"Perhaps the biggest contribution the US government could make to these talks would be to cut the carbon of sending people to negotiations who refuse to negotiate," she said.

What happens next


The next major milestone is the 17th Conference of the Parties of the UNFCCC and the 7th Conference of the Parties to the Kyoto Protocol, to be held in Durban, South Africa, in November /December 2011.

Before then, there will be a meeting about the Green Fund in Tokyo in July. A ministerial conference is planned for 2 to 3 July in Berlin, and ministers will also meet approximately a month ahead of the UN Climate Change Conference in South Africa.

South Africa is also considering a third ministerial consultation this year, and the incoming South African presidency and the current Mexican presidency are planning to engage heads of state and governments on the margins of the UN General Assembly in New York in September.

Wednesday, June 08, 2011

Carbon market in a slump as climate talks continue in Bonn

Forest planted and managed for carbon offsetting
As world environment ministers and representatives meet in Bonn for climate talks this week, investors in the carbon market are hoping, probably in vain, for some kind of certainty as to what will happen after 2012.

After five consecutive years of robust growth, the total value of the global carbon market has stalled at $142 billion due to uncertainty as to what will replace the Kyoto Protocol's Clean Development Mechanism (CDM) after next year. The recession has also had an effect on the market.

A report from the World Bank, The State and Trends of the Carbon Market 2011, covering the last five years up to 2010 and issued last week, shows that the value of the primary CDM market fell by double digits for the third year in a row, ending lower than it was in 2005, the first year of the Kyoto Protocol.

The Assigned Amount Unit (AAU) market, which grew in 2009 with strong governmental support, shrank as well in 2010. Finally, the market that had grown most in 2009 allowances under the U.S. Regional Greenhouse Gas Initiative (RGGI) saw that year's gains erased in 2010.

This meant that the European Union's Allowances (EUAs) market became especially important. EUAs accounted for 84% of global carbon market value last year.

If you take into account the value of secondary CDM transactions, their share, driven by the EU Emissions Trading Scheme rose to 97%, dwarfing the remaining sections of the market. If it was not for Europe's commitment, virtually nothing would be happening elsewhere in the world.

Voluntary carbon market


There is good news, however, in another report released last week about the state of the voluntary carbon market, which posted a 34% gain in 2010, trading a record 131 million tons of carbon dioxide equivalent (MtC02e).

This is an annual report by Ecosystem Marketplace and Bloomberg New Energy Finance which gathers data from almost 300 market participants.

While the US accounted for the majority of trading activity, worth $424 million in total, market growth was strongest in developing countries.

Voluntary offsetting is due to businesses' CSR (Corporate Social Responsibility) commitments. These markets are investing particularly in renewable energy and forests.

The need for political commitment


Loss of political momentum on setting up new cap and trade schemes in several developed economies such as the United States and in the Far East, is a further reason for the decline in the non-voluntary sector.

Last week, California's proposed cap and trade scheme was challenged in the courts and is likely to be delayed by a year.

Christiana Figueres, executive secretary for the UN Convention on Climate Change, lambasted the US for inaction on climate change at the Carbon Expo in Barcelona last week.

Andrew Steer, World Bank Special Envoy for Climate Change, summed up the message of the report at the Expo. "The global carbon market is at a crossroads. If we take the wrong turn we risk losing billions of lower cost private investment and new technology solutions in developing countries. This report sends a message of the need to ensure a stronger, more robust carbon market with clear signals.”

The report's authors predict that in the next two years the difference between the gross demand for the cumulative supply of carbon credits generated under the Kyoto mechanisms will be below $140 million, and virtually all of this demand will be from Europe.

Looking beyond 2012, although potentially the demand for emission reductions could reach 3 billion tons or more, so far the only certain demand is from Europe estimated at just 1.7 billion tonnes.

This means there is little incentive for project developers to invest further and create a future supply of emissions reductions.

This is the effect that political uncertainty is having on political and business efforts to combat climate change at a time when its threat is reported to be even greater than previously assumed.

"Carbon market growth halted at a particularly inopportune time: 2010 proved to be the hottest year on record, while global emission levels continued to rise relentlessly,observes Alexandre Kossoy, World Bank Senior Financial Specialist.

“At the same time, other national and local low-carbon initiatives have picked up noticeably in both developed and developing economies. Collectively, they offer the possibility overcome regulatory uncertainty and signal that, one way or another, solutions that address the climate challenge will emerge."

Eight countries receive $2.8m


The World Bank's response is centred around the $100 million Partnership for Market Readiness, launched in Cancun in December 2010, which aims to support mitigation activities.

Last week it dispersed its first funding to eight countries: Chile, China, Columbia, Costa Rica, Indonesia, Mexico, Thailand, and Turkey. Each received an initial grant of $350,000 to help design, pilot, and eventually implement market-based instruments for greenhouse gas mitigation. They will now develop a "Market Readiness Proposal" to detail their plans. Another seven countries will receive grants shortly.

The fund is supported by ten contributors Australia, the European Commission, Germany, Japan, the Netherlands, Norway, Spain, Switzerland, the United Kingdom and the United States which together have pledged nearly US $70 million.

A number of the World Bank's carbon funds and facilities, such as the Carbon Partnership Facility, the second tranche of the Umbrella Carbon Facility, and a new facility for low-income countries currently under development, also respond to future needs by supporting scaled up mitigation and purchasing carbon credits beyond 2012.

Furthermore, the Forest Carbon Partnership Facility is supporting REDD+ initiatives which, to date, have not been included under the CDM. The Bank sees carbon markets as an important and versatile tool to provide incentives for a shift to lower carbon development paths.