Showing posts with label market mechanism. Show all posts
Showing posts with label market mechanism. Show all posts

COP 18: Bridging the Gulf Between Science and Reality

In theory the slew of recent climate studies should inspire the delegates that have assembled for the 18th Conference of the Parties (COP 18). In practice the 194 nations that are meeting in Doha, Qatar, are getting bogged down by the same old arguments.

The consensus once again this year appears to be that nothing will be accomplished. The United Nations Framework Convention on Climate Change (UNFCCC) convened these negotiations almost two decades ago and in all that time, we have seen very little meaningful action on the primary issue of curtailing greenhouse gases (GHGs). Since 2000, the concentration of carbon dioxide has increased almost 20 percent and there is an ever widening gap between what governments are doing to curb emissions and what needs to be done.

Recent reports on GHGs and global warming

The climate data from numerous sources conclusively makes the point that we are heading towards calamity. More than a dozen studies made this point just ahead of the climate talks in Doha.
A number of scientist have warned that time is running out to avert a climate catastrophe. While they acknowledge that it is still possible to stave off the worst effects of climate change, they note that the window of opportunity is rapidly getting smaller.
In November, the World Meteorological Association’s (WMO) annual Greenhouse Gas Bulletin indicated that global atmospheric carbon levels are at 391 parts per million, the highest they have ever been in human history. Scientists warn that 350 parts per million is the upper limit for a stable planet. Levels of CO2 have been steadily rising at about 2 parts per million every year for the past decade. Current measurements of atmospheric carbon are 40 percent higher than at the start of the Industrial Revolution. Since the dawn of industrialization in 1750 humans have emitted 375 billion tonnes of carbon dioxide into the atmosphere. The WMO Bulletin indicates that future emissions will make the situation far worse.
The US National Oceanographic and Atmospheric Administration (NOAA) contributed to the WMO report by providing data published in their Annual Greenhouse Gas Index (AGGI). Their report stated: “Increases in the abundance of atmospheric GHGs since the industrial revolution are largely the result of human activity and are largely responsible for the observed increases in global temperature.”
On November 12, the Paris-based International Energy Agency (IEA) warned that ongoing reliance on fossil fuels will make it impossible to curtail climate change. They further state that renewable energy is being neglected in favor of coal, oil, and natural gas.
In a November 13 press release, Renewable Energy Industry (IWR) indicated that last year’s GHGs reached a record high. In total, there were 34 billion tons of GHG emissions in 2011, which is 800 million more tons than in 2010.
On November 18, the World Bank issued a report suggesting that the climate could warm a full 4 degrees by the end of the century. The study further suggests that we will not be able to avert this temperature increase even in the unlikely event that countries fulfill their current emissions-reduction pledges.
On November 21, UNEP issued a warning saying that we are on the brink of a climate catastrophe. The UN Environment Program’s Emissions Gap Report 2012 indicates that there is a massive gulf between what governments have pledged in terms of GHG emissions and what they are actually doing. To stave off a temperature increase of more than 2 degrees Celsius (3.6 degrees Fahrenheit), nations have pledged to reduce their emissions a total of 44 gigatonnes (Gt) by 2020. However, the UNEP report indicates that if we stay on our current trajectory of increasing emissions, we are likely to see temperature increases of 3-5 °C. According to UNEP, the gap between GHG emission reduction pledges and what is actually being done is 8 Gt of CO2 by 2020, which is 2 Gt higher than last year’s assessment.
Also in November, Price Waterhouse Coopers offered its own climate change warning in a report titled Too Late for Two Degrees? According to this study, it may already be too late to keep global temperatures within the scientifically agreed upon upper threshold of 2°C.
In November, the World Resources Institute (WRI) put forth its own warning in a report titled Global Coal Risk Assessment. As reviewed in this study, proposed coal projects around the world will quadruple the current capacity of all coal-fired plants in the US. The report found that there are 1,199 new coal power plants in the works, totaling more than 1.4 million megawatts of capacity worldwide.
On December 2, researchers affiliated with the Global Carbon Project released a report titled, The Challenge to Keep Global Warming Below 2 degrees C. The study concludes that it is becoming increasingly unlikely that we will be able to keep temperatures within acceptable upper limits. Emissions continue to grow so quickly that without immediate action, we will not be able to stay within the upper temperature limit established by scientists.

Reports on sea level rise

According to a November 27th study, the ocean is rising much faster than predicted by the Intergovernmental Panel on Climate Change (IPCC). A number of scientists are warning that we must act now to address rising sea levels. They indicate that rising sea levels will be disastrous, but they also say that it is still within our power to not only defend against rising tides, but also to reduce the rate at which they rise.
Rising sea levels not only imperil people, the cost to property and infrastructure amounts to trillions of dollars a year. However, if governments act now, they can significantly reduce these costs. Failure to act soon will cause the costs to increase exponentially.
The threat from rising ocean levels will impact millions of Americans, including people in Florida, Louisiana, California, New York and New Jersey. In total, more than half of the US population in more than 285 cities may be at risk.
A 2011 study by the International Arctic Monitoring and Assessment Program (AMAP) indicates that driven by warming in the Arctic and the resulting melt of snow and ice, sea levels could rise up to 5 feet by the end of this century. This is more than two and a half times higher than the 2007 projection by the IPCC.

Agenda for COP 18

As these studies reveal, the need for science driven governmental policy has never been more urgent. Despite the alarming state of affairs, the agenda for COP 18 is modest at best, with no new emissions targets and little progress expected on a new binding climate deal.
The meeting in Doha is scheduled to address a second round of commitments under the Kyoto Protocol, wrap up the Long-term Cooperative Action (LCA) negotiating track and deal with the Durban Platform for Enhanced Action (ADP).

Kyoto Protocol and a Second Commitment Period

The Kyoto Protocol (KP) is a historic agreement that legally binds developed (or Annex I) countries to emission reduction targets.  Out of the 195 signatories to the UNFCCC, 192 have ratified the Kyoto Protocol; the U.S. is a notable exception.
One of the advantages to KP is that it includes carbon pricing in the form of cap-and-trade based policy frameworks. The KP is currently the only legally binding mechanism we have to limit international greenhouse gas emissions, but it comes to an end on December 31, 2012.
There are efforts underway to secure a second commitment period (KP2), which will start on January 1, 2013.  While KP2 has some support including counties in the EU and Australia, there is strenuous resistance from the U.S., Canada, Russia, Japan and New Zealand.

Long-term Cooperative Action (LCA)

The discussion on LCA includes a broad range of issues including the Green Climate Fund (GCF), the Nationally Appropriate Mitigation Action (NAMA), the New Market Mechanism (NMM) and more recently, the Framework for Various Approaches (FVA).
We may see some progress here.

Durban Platform for Enhanced Action (ADP)

The ultimate goal of the ADP track is a new global climate deal by 2015 which will take effect in 2020. To develop a comprehensive agreement, the ADP needs to define specific targets, goals and actions. One of the primary goals is the establishment of a carbon market infrastructure. It should also address a funding mechanism for developing economies that leverages private sector finance as well as technology transfer and best practices for implementation.
Few believe that Doha will succeed in setting the course for the ADP. However, we may see some modest progress on Reducing Emissions from Deforestation and Forest Degradation (REDD).

Reducing carbon emissions from deforestation

The REDD+ framework is one of the subjects being discussed at COP 18. Clearing forests to make way for agriculture and other uses is responsible for about 20 percent of the world’s greenhouse gas emissions.
Despite some initial optimism, the WWF reports that developing and developed countries were at odds after Saturday’s meeting about how to verify carbon emissions from forests.
This may prove to be less problematic once the financing issue is addressed as many of the verification issues can be solved with appropriate funding.

The “Equity” problem

Throughout the course of their industrial development, wealthy countries have emitted vast quantities of GHGs, as a consequence, they have a historical responsibility for climate change. Countries that have undergone fossil fuel dependent development are also in a better economic position to contribute to climate solutions.
Current positions from many wealthy countries including the U.S. make little or no allowance for their historical responsibilities.
The question yet to be answered in Doha is: What responsibilities do different countries hold, and how can we implement climate solutions fairly?

How do we measure success?

We need to move beyond the obstacles and do more than make vague statements. We need to get serious about tangible commitments and concrete deadlines. With this is mind, success at COP 18 should be measured by what countries accomplish in the following three areas:
  1. A robust second commitment period KP2
  2. Successful closure of negotiations on LCA involving mitigation, adaptation, finance, technology transfer and capacity-building.
  3. A way forward for the 2015 agreement involving all countries.

Conclusion

Success at COP 18 seems very unlikely, but we are sometimes surprised. In 2011, we saw the EU, the Alliance of Small Island States and the Least Developed Countries come together to get things done. Perhaps similar alliances could help us to move forward this year.
As demonstrated by the most recent studies, we cannot afford to be patient. We must strive to achieve the explicit goal of the UNFCCC which is to reduce GHG emissions so that we can limit global temperature increases.
The current inhabitants of the Earth, along with all the generations to come are counting on us to find a way to realize these lofty aspirations. While it may seem impossible from where we are today, the facts compel us to try, or die trying.

Source: Global Warming is Real

A Short History of the UNFCCC Conference of the Parties (COP)

The United Nations Framework Convention on Climate Change (UNFCCC or FCCC) is an international environmental treaty negotiated at the United Nations Conference on Environment and Development (UNCED). The UNFCCC was opened for signature on May 9, 1992, after an Intergovernmental Negotiating Committee produced the text of the Framework Convention as a report following its meeting in New York from April 30 to May 9, 1992. It entered into force on March 21, 1994. As of December 2012, UNFCCC has 194 parties.

The parties to the convention have met annually from 1995 in Conferences of the Parties (COP) to assess progress in dealing with climate change. To date their have been 18 annual COP meetings from 1994 to 2012. The primary goal of these meetings is to reduce greenhouse gas (GHG) emissions so that we can limit global temperature increases.

Informally known as the Earth Summit, the first COP was held in Rio de Janeiro from June 3 to 14, 1992. The stated objective of these meetings is to "stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system."

The treaty itself set no binding limits on greenhouse gas emissions for individual countries and contains no enforcement mechanisms. In that sense, the treaty is considered legally non-binding. Instead, the treaty provides a framework for negotiating specific international treaties (called "protocols") that may set binding limits on greenhouse gases.

In 1997, the Kyoto Protocol was concluded and established legally binding obligations for developed countries to reduce their GHG emissions. The 2010 Cancún agreements state that future global warming should be limited to below 2.0 °C (3.6 °F) relative to the pre-industrial level.

One of the first tasks set by the UNFCCC was for signatory nations to establish national GHG inventories of emissions and removals, which were used to create the 1990 benchmark levels for accession of Annex I countries to the Kyoto Protocol and for the commitment of those countries to GHG reductions. Updated inventories must be regularly submitted by Annex I countries.

Since the UNFCCC convened these negotiations almost two decades ago we have seen very little meaningful action on the primary issue of curtailing GHGs. Since 2000, the concentration of carbon dioxide has increased almost 20 percent and there is an ever widening gap between what governments are doing to curb emissions and what needs to be done. Nonetheless, the COP process remains our best hope of creating an international binding agreement to limit GHGs.

Here is a summary of links covering the last five COPs:

COP 18

COP 18: Bridging the Gulf Between Science and Reality
Plea for Action at COP 18 by the Delegate from the Philippines (Video)
COP 18 Update: Developing Nations Blame Wealthy Nations (Video)
COP 18: The History of Carbon and Respective Responsibilities
COP 18: WBCSD on Establishing a Global Carbon Market
Figueres on COP 18: We Need Domestic Legislation
COP 18 Drivers of Deforestation (Video)
Doha progress update by Christiana Figueres on 30 November 2012 (Video)
Christiana Figueres on the Objectives of COP 18 (Video)
COP 18: Major Issues, What We Have Achieved on Climate Change and the US Position (Video)
Yvo de Boer's Comments and Predictions Post COP 17

COP 17

Will the Agreement Reached at COP 17/CMP 7 Contain Climate Change?
Details of the Deal Reached at COP 17
Extended COP 17 Negotiations Yield Agreement
Who is to Blame for Difficulties at COP 17?
Hope Remains Despite Expectations of a Dissapointing Outcome at COP 17
China an Unlikely Hero at Cop 17
The Costs of Global Warming
A Binding Agreement on Climate Change is a Matter of Life and Death
Canada is a Pariah at COP 17
The Costs of Canada's Failure to Act on Climate Change
COP 17 a Premeditated Failure?
Protests Around the World Call for Climate Justice at COP 17
UN Chief Warns that the Future of the Planet is at Stake at COP 17
India is Leading Resistance to a Binding Treaty at COP 17US Demands Emissions Reductions from China and India
Polluters Dominate the Agenda at COP 17 in Durban
Video: Special Envoy Stern Discusses COP 17
Video: One South African Asks Why Canada is Silent on Climate Change
Video: COP 17 & CMOP 7 Opening Remarks

COP 16

The Cancun Agreements at COP16
Steven Chu at COP16: Building a Sustainable Energy Future (Video)
Canada's Conservative Government Opposes Kyoto and Hampers Progress at COP16
COP16 Market Based Finance Mechanisms
Reduction of Non-CO2 Emissions at COP16
What Can Be Achieved At COP16
Yvo de Boer on the Future of the UNFCCC
UNFCCC Tells Governments to Get Real for COP16
World Mayors Summit on Climate
Sustainable Practices are a Strategic Priority for Business
Climate Change is an Economic and a Security Issue
The Business Community's Silence on Climate Change Negotiations
UN Climate Change Meeting Commences in Tianjin China
Lowering Expectations for UN Climate Negotiations
The Montreal Protocol Celebrates 23rd Birthday
UN Climate Change Initiatives Post Toronto
The Resignation of Head UN Climate Change Negotiator

COP 15

Cop Out for COP15
Why We Did Not Get A Binding Agreement At COP15
Obama Salvages 'Meaningful' Agreement at COP15
Reaction to COP15
COP15: Groups and Subgroups
COP15: New Beginnings or Ignoring the Apocalypse?
Post COP15
Danish Optimism Ahead of COP15
Obama Needs the Senate to Succeed on Climate Change
Obama Buoys Hopes for a Climate Change Deal
Obama's Achievements Ahead of COP15
Cop Out for COP15
The Cost of a Global Deal on Climate Change
The State of Climate Change Negotiations
Action on Climate Change
COP 15 Implications for Business
COP 15 Timetable
Global Cooperation Ahead of COP 15
Copenhagen Accord: Global Emissions Cuts
UN Climate Change Initiatives Post Toronto
Post COP15
The US is Bound by Law to Honor Climate Change Treaty
The Road to Copenhagen (COP 15): Implications for Business

COP 14

United Nations Climate Change Conference (COP14)
UN COP Sessions and Implications for Business
UN COP Sessions Positioning Your Business

Yvo de Boer's Comments and Predictions Post COP 17

Ex U.N. climate chief Yvo de Boer had some very positive things to say about last year's climate talks. As we are getting into the final stretch of COP 18 it is interesting to look back on COP 17 in Durban. On January 6, 2012, Environmental Leader published an article detailing de Boer's views.

The former executive secretary of the U.N. Framework Convention on Climate Change said that Durban sent a strong message to business that the world’s governments are serious about tackling climate change. He said that the Durban climate talks indicate that it is time for businesses to start preparing for a low-carbon economy. He also said that market-based mechanisms such as carbon trading will continue and he further expected that there will be clear reporting guidelines on GHG emissions.

At the 2009 Copenhagen climate summit (COP 15) de Boer was one of the driving forces behind the voluntary commitments made by member states to cut emissions by 2020. At COP 17 in Durban negotiators agreed a second commitment period under the Kyoto Protocol, to run from 2013 through 2017, and bound themselves to agree in 2015 to a deal to force them to cut emissions by 2020. Durban also saw agreement on the broad strokes of a green climate fund, which is set to channel $100bn a year from rich to poor countries by 2020.

De Boer indicated that Durban resulted in an agreement to develop a common system for measuring, reporting and verifying emissions cuts, which was a key to progress on GHG reduction, and also key to private sector investment.

De Boer applauded voluntary commitments and suggested that a legally binding agreement may be forthcoming.

© 2012, Richard Matthews. All rights reserved.

Related Articles
COP 18: The History of Carbon and Respective Responsibilities
COP 18: WBCSD on Establishing a Global Carbon Market
Figueres on COP 18: We Need Domestic Legislation
COP 18 Drivers of Deforestation (Video)
Doha progress update by Christiana Figueres on 30 November 2012 (Video)
Christiana Figueres on the Objectives of COP 18 (Video)
COP 18: Major Issues, Flooding in the UK, What We Have Achieved on Climate Change and the US Position (Video)

COP 18: WBCSD on Establishing a Global Carbon Market

Recently the World Business Council for Sustainable Development (WBCSD) resurfaced work that it undertook back at the start of the Long-term Cooperative Action (LCA). The discussion on LCA includes a broad range of issues including the Green Climate Fund (GCF), the Nationally Appropriate Mitigation Action (NAMA), the New Market Mechanism (NMM) and more recently, the Framework for Various Approaches (FVA).

The WBCSD has published a paper entitled “Establishing a Global Carbon Market,” it looks at how the substance of the Kyoto Protocol carbon market can be applied much more broadly to an evolving world of various approaches.

As reviewed in the paper, a refined single track approach will bring much needed focus back to the discussions which then paves the way for at least some hope that the 2015 goal for a new agreement can be met.

According to the paper, the big asks for COP 18 are:

1. Agreeing to a continuation of the Kyoto Protocol through to 2020 and then politely ushering this Grand Dame of the UNFCCC off the stage with some reverence and applause.

2. Bringing closure to the LCA work programme and shifting some key components (e.g. GCF, TEC) into the formulation of the ADP.

3. Establishing a clear work programme for the Durban Platform for Enhanced Action (ADP). The ultimate goal of the ADP track is a new global climate deal by 2015 which will take effect in 2020. One of the primary efforts involves the establishment of a carbon market infrastructure.

© 2012, Richard Matthews. All rights reserved.

Related Articles
Yvo de Boer's Comments and Predictions Post COP 17
COP 18: The History of Carbon and Respective Responsibilities
Figueres on COP 18: We Need Domestic Legislation
COP 18 Drivers of Deforestation (Video)
Doha progress update by Christiana Figueres on 30 November 2012 (Video)
Christiana Figueres on the Objectives of COP 18 (Video)
COP 18: Major Issues, Flooding in the UK, What We Have Achieved on Climate Change and the US Position (Video)
US Climate Change Policy: Hurricane Sandy, Drought and Rising Sea Levels (Video)

California's Cap-and-Trade Leadership

On Wednesday November 14, California held its first auction to sell carbon credits. For six years that state has been working on its cap-and-trade system, more than six years in the making. Finally California has imposed a limit on the amount of carbon emissions and this limit will be reduced over time so that by 2020 the state can cut emissions by 15 percent as compared to 1990 levels. Companies that exceed their limit are forced to buy credits from projects that cut greenhouse gas emissions. Almost all of the 23.1 million credits California has distributed to utilities and big industry for 2013 compliance have been free

Cap-and-trade puts market mechanisms to work on behalf of the environment. This approach to emissions reductions is a model for the rest of the nation. It was market driven forces that caused the build-up of climate change causing greenhouse gases. It therefore stands to reason that similar market mechanism can be brought to bear to reduce emissions and curtail warming.

There are valid concerns that energy intensive industries like refiners, cement makers and other large emitters will simply leave the state. However, these economic concerns pale in comparison to the extraordinary costs of continuing with business as ususal.

California's carbon trading scheme is being met with political opposition, and legal threats from the state's Chamber of Commerce, the petroleum industry and other energy intensive businesses. Bloomberg reports that futures contracts based on California carbon permits for 2013 dropped 40 cents to a record $12.25 a metric ton.

Although these issues are impacting carbon trading prices, they can be understood as the birth pains of a new system that will revolutionize the way we do business. Despite these obstacles, California is once again showing the rest of the nation the way forward.

© 2012, Richard Matthews. All rights reserved.

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