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California's Cap-and-Trade Program is Alive and Well

July 18, 2017 Add Comment Edit

This is the eighth installment in a series of posts on California's climate leadership. These posts address a wide range of related topics including economic benefits and renewable energy.

With unprecedented bipartisan support, California lawmakers have voted to extend the state's cap-and-trade program. This carbon pricing program is key to meeting California's ambitious carbon reduction targets. The plan puts a statewide cap on greenhouse gas emissions and allows companies to buy and sell pollution credits.

The Golden State has been a cap-and-trade leader for years and it has a current market value of $8 billion. Negotiations are ongoing to include Mexico in the joint market. Two Canadian provinces are part of California's carbon pricing scheme. Quebec is already part of the deal and Ontario is linking with the market this year. B.C. already has a successful carbon pricing plan and even the oil producing province of Alberta has signed on to a carbon pricing initiative. The Regional Greenhouse Gas Initiative, (RGGI) is composed of nine north east states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont). The agreement caps and reduce CO2 emissions from fossil-fuel power plants that generate 25MW of power or more.

Using markets to combat pollution has proven effective. The argument for pricing carbon is compelling indeed some have argued that it may be the best way to reduce emissions. The president of the World Bank advocates putting a price on carbon and such pricing schemes are already widespread in countries around the world including Europe, China, Japan, South Korea, and Canada

California has passed a raft of increasingly stringent emissions reduction legislation. Although detractors have tried to suggest the state's cap-and-trade program is in serious trouble, the evidence shows that California's carbon trading scheme is a success story. As reported by Greenbiz, the most recent data (July 2017) indicates that California is only 3 percent away from its 2020 goal of reducing emissions to 1990 levels as required by AB 32. The article also makes the point that these reductions have been, "easier and cheaper than expected."

What is even more striking is that these emissions reductions have occurred alongside laudable economic growth. This is further evidence of the decoupling emissions and growth.

At the 13 previous California Air Resources Board’s (CARB) auctions, allowances have sold out at or above the floor price. However, at the last two auctions, demand was not strong enough for CARB to sell allowances at the price floor ($12.73 per ton).

This is because companies are not buying permits. Companies are not buying permits because they do not have to. As explained in the Greenbiz article, "they already held enough to account for their current emissions, or they expect to be able to make emission reduction for less than the cost of an additional permit."

Contrary to the assertion of detractors this does not prove that the scheme is failing, it may however suggest that California's climate and energy policies (ie performance standards) are working.

Despite some legal risks associated with court challenges the future of carbon trading looks bright in California. Gov. Brown has vowed to extend the program beyond 2020 and CARB has released a proposal extending the program to 2050. CARB’s new proposed regulation offers a stronger mechanism to correct for situations where supply exceeds demand. It does this by diverting unsold allowances to a reserve which provides downward pressure on allowances prices should cost pressures begin to emerge.

As reviewed in the Greenbiz article, "CARB’s cap-and-trade design has been fundamentally sound from the start, and only continues improving." For more information on California's cap-and-trade plan click here.

Related
US States Show Carbon Pricing Works
Low Oil Prices and Climate Action (carbon pricing and subsidies)
Why a Carbon Tax May be the Best Way to Reduce CO2 (Video)
Put a Price on Carbon
RGGI States' Third Consecutive Year of GHG Declines
Carbon Pricing and Emissions Trading a Global Review
US Cap-and-Trade: What and Why
US Cap-and-Trade: Positioning Your Business

Sustainability Comparisons Between Rio 2016, the Sochi Winter Olympics and the Brazilian World Cup in 2014

August 06, 2016 Add Comment Edit

The Rio Summer Olympics do not compare favorably to the Sochi Winter Olympics and the Brazilian World Cup in 2014. This is a damning indictment given that Russia's Sochi games were colossally corrupt. Sochi clearly illustrated that Putin's promise of green games was little more than a farce and an Olympic sized example of greenwashing.

There have been protests against the Rio games across Brazil but they are much smaller than the protests against the World Cup in 2014. At that time there was a popular outcry against an expensive sporting event while the country struggled with widespread poverty and inequality. The same criticisms are warranted in the case of the Rio games.

In 2014 the FIFA World Cup was held in Brazil. Critics asked how the country can stage such events when the people of Brazil see none of the multi-million dollar benefits. FIFA alone netted as much as $5 billion from the World Cup in 2014. The city of Porto Alegre saw tax exemptions connected to World Cup construction amounting to more than $12 million US. Many companies also profited handsomely from the even but the average citizen, particularly the poor got nothing.

Despite these criticisms the 2014 World Cup was arguably a greener event than the Rio Olympics. Environmental problems associated with the 2014 World Cup included things like massive energy use and unsustainable road transportation. However, the event also included a raft of sustainability focused efforts including carbon credits, green stadiums, and sustainability training for stadium staff.

More recent protests in Brazil have focused on what is being called a right wing coup. For years Brazilians have been protesting corruption and calling for workers rights. Rio 2016 proves that the government is not listening to its people. It may be more accurate to say that the economic crisis, corruption and political dysfunction preclude sustainability in Brazil.

In an attempt to draw attention to an increase in Rio's fatal police shoots, the Brazil chapter of rights group Amnesty International displayed 40 body bags in front of the office of the local Olympic Organizing Committee.

In the lead up to the games Amnesty International raised concerns around the increased risk of human rights violations in the context of Rio 2016 Olympics. Amnesty points to the death toll before the 2014 World Cup and the 2007 PanAmerican games, saying that 2,600 people have been killed by police in Rio since the bid to host the games in 2009. In the month of May alone, the policed killed 40 people, more than double the number for the same period in 2015.

Defending the environment or drawing attention to health issues is especially dangerous in Brazil. In 2012 two environmentalists were murdered for defending the Amazon. These are but two of dozens of environmentalists who have been killed in the country. According to a Global Witness report titled, On Dangerous Ground, Brazil is the most lethal country in the world for environmental champions. The country has the highest murder rate for environmental activists in the world with 50 confirmed murders last year and more than 200 between 2010 and 2015.

In this context Rio's Olympics are even worse than the Sochi. Ahead of the Sochi games, Russia imprisoned environmental activists, in Brazil activists get two bullets in the chest and one in the head.

The Sochi Olympics were steeped in corruption and mired in greenwash. However this is to be expected from one of the most corrupt demagogues in one of the most unsustainable countries in the world. What makes the games in Brazil so disappointing is that the country appeared to be moving forward on environmental and social issues.

Related
Glory Eclipsed by Shame at the Rio Summer Games: A Social and Environmental Review of Brazil
Sustainability at the Rio Olympic Games: More Green Promises More Green Lies
Brazil's Corruption, Socioeconomic Woes, Political Intrigue have overshadow the Rio Olympics
Olympic Sized Greenwashing at the Sochi Olympics
The Farce of Putin's "Green" Olympics
Russia Imprisons Environmental Activists Ahead of the Sochi Olympics
The Future of the Winter Olympics is Being Threatened by Climate Change
Video - Greenwash at the Vancouver Winter Olympics of 2010
Declining Levels of Snow and the End of Winter
London 2012: The Greenest Olympics in Modern History

Sustainability at the Rio Olympics: More Green Promises More Green Lies

August 05, 2016 Add Comment Edit

Olympic games are becoming increasingly environmentally sustainable, at least on paper. Once again this year's Olympic games are touted as being the greenest games ever. In fairness, making such a massive event environmentally sustainable is a truly herculean undertaking.

Over the last twenty years there have been a number of efforts designed to make the games more green. In 1996, the Olympic Charter was amended to recognize the environment as the third pillar of Olympism. This was followed by clearly defined policies associated in the IOC's Olympic Movement's Agenda 21.

The Rio 2016 sustainability plan aspires to deliver on these lofty aspirations. The Sustainability Management Plan was released in August 2013 and it applies to both the Rio 2016 Olympic and Paralympic Games. The plan is premised on the pillars of planet, people and prosperity. It seeks to integrate the principles, actions and projects related to sustainability when hosting major global events. It was developed with input from federal, state and municipal governments.

The plan includes a technical cooperation agreement with the United Nations Environment Programme (UNEP). Denise Hamú, the UNEP’s representative in Brazil explained the plan this way:

“Our goal is to integrate sustainability in all organisational processes, reducing the impact of the Games and setting an example of good practice for society as a whole. Together, sports and environment are powerful tools for sustainable development. For this reason, the UNEP has worked in partnership with the Olympic Movement over the last two decades.”

In November 2015 the Organizing Committee released a document called Focus: Rio 2016 Sustainability

"The sustainability planning of the Games was built on three strategic pillars – people, planet and prosperity - whose actions unfold along nine specific themes. In the PEOPLE pillar, initiatives focus on the themes of (1) engagement and awareness-raising, (2) universal accessibility and (3) diversity and inclusion. In the PLANET pillar, focus lies on (4) transport and logistics, (5) sustainable building, (6) conservation and environmental recovery and (7) waste management. Finally, the PROSPERITY pillar, which guides the whole Rio 2016 operation regarding (8) the sustainable supply chain and (9) management and reporting."

The Rio 2016 are supposed to green, but like the Sochi Winter Olympics these promises fall far short.

The Olympics are a truly remarkable opportunity to communicate and embed sustainability in our world. This point was made by Rio 2016 President Carlos Nuzman. He said that sports plan an important role in promoting a more sustainable world. The Olympic Organizing Committee said:

"we have taken up the commitment to use the force of sports and sustainability in order to leverage transformations in people as well as the city."

After Volkswagen's epic greenwash, another round of promises that prove to be false will do more harm to sustainability. Such events not only hurt sports they cast aspirations on sustainability as a whole.
If the deeds don't live up to the words the Rio Games may end up being a lot like the Olympics in Vancouver and Sochi

Related
Glory Eclipsed by Shame at the Rio Summer Games: A Social and Environmental Review of Brazil
Brazil's Corruption, Socioeconomic Woes, Political Intrigue have overshadow the Rio Olympics Sustainability Comparisons Between Rio 2016, the Sochi Winter Olympics and the Brazilian World Cup
Olympic Sized Greenwashing at the Sochi Olympics
The Farce of Putin's "Green" Olympics
Russia Imprisons Environmental Activists Ahead of the Sochi Olympics
The Future of the Winter Olympics is Being Threatened by Climate Change
Video - Greenwash at the Vancouver Winter Olympics of 2010
Declining Levels of Snow and the End of Winter
London 2012: The Greenest Olympics in Modern History

Brazil's Corruption, Socioeconomic Woes and Political Intrigue Overshadow the Olympics

August 03, 2016 Add Comment Edit

The scourge of corruption has embroiled Brazil in a morass of complex political intrigue. Brazil's economy has contracted by 3 percent this year and although the country is in a deep recession, it is still the world's fifth largest economy. Brazil's difficulties extend far beyond serious fiscal hardships, the nation is also rife with sexism, racism and human rights abuses.

In May of this year Brazil's President was suspended after holding office for less than six years. Despite pulling millions of people out of poverty, a majority of Brazilian senators voted to launch an impeachment trial against President Dilma Rousseff. She is the country's first female President and her government swore in 15 female ministers. Rousseff is a 68-year-old economist and she was removed amid allegations that she broke budget rules and manipulated economic data.

Michel Temer the former "decorative" vice president assumed the role of interim president. Although he is facing charges of his own, he appointed an all male cabinet marking the first time that women have been excluded from the Brazilian cabinet since the 1970s. He also shut down the Ministry of Culture and the Ministry of Women, Racial Equality and Human Rights.

Many tens of thousands of women have protested what is being called the traitorous Terner coup in major cities across Brazil. They decried what they see as a war against women, minorities and social programs.

It is believed that a probe into kickbacks from state-run oil company Petrobras led to Rousseff's impeachment. Petrobras is one of several fossil fuel companies that has been linked to corruption. As a consequence Petrobras has recently been removed from the Nasdaq Sustainability Index. Petrobras has contributed R$3,500,000.00 towards the Rio Olympic games.

New national elections are scheduled for 2018. In the interim the acting president has the support of only 1 percent of the electorate and more than half of Brazilians have indicated that they want him impeached too.

A 440 page Senate report was released on August 2 and it finds Roussef guilty of violating the constitution by manipulating government accounts. The final phase of the impeachment will unfold at the end of August or Early September.

With the world's eyes on Brazil for the Olympic games this crisis could not be unfolding at a worse time.

Related
Glory Eclipsed by Shame at the Rio Summer Games: A Social and Environmental Review of Brazil
Sustainability at the Rio Olympic Games: More Green Promises More Green Lies
Sustainability Comparisons Between Rio 2016, the Sochi Winter Olympics and the Brazilian World Cup
Olympic Sized Greenwashing at the Sochi Olympics
The Farce of Putin's "Green" Olympics
Russia Imprisons Environmental Activists Ahead of the Sochi Olympics
The Future of the Winter Olympics is Being Threatened by Climate Change
Video - Greenwash at the Vancouver Winter Olympics of 2010
Declining Levels of Snow and the End of Winter
London 2012: The Greenest Olympics in Modern History

Agreement on a Pan-Canadian Carbon Pricing Scheme

March 04, 2016 Add Comment Edit

It looks as though Prime Minister Justin Trudeau's Liberals are moving forward with a national carbon pricing scheme albeit adapted to regional circumstances. On Thursday March 3, 2016, Trudeau announced that the federal government along with all ten provinces have agreed to a "comprehensive and ambitious plan" to put a price on carbon.

Carbon pricing (which includes both cap and trade and a carbon tax) leverages the market to disincentivize emissions intensive activities by making them more expensive while incentivizing low carbon technologies. In effect carbon pricing integrates the true cost of carbon which is currently not reflected in the market. Carbon pricing is the best way to help governments reduce emissions while minimizing economic impacts.

There are some compelling arguments that have been made in support of carbon pricing. In April 2015, 65 researchers in Canada published a report that indicated putting a price on carbon is key to reducing emissions in the country. With oil prices so low this may be the best time to put a price on carbon. Although carbon pricing was rejected by the previous Conservative government under Stephen Harper, it was part of the Liberal's raft of campaign promises.

Canada's new Prime Minister has said that he will respect the unique circumstances of each province and this appears to be the caveat that secured the support of detractors like Saskatchewan's Brad Wall. "There will be different approaches but pricing carbon is part of the solution that this country and all of its premiers will put forward," Trudeau told a news conference.

There are predictable detractors like David McLaughlin former President and CEO of the National Round Table on the Environment and the Economy and a Conservative Chief of Staff. In a Globe and Mail article McLauglin indicated that carbon pricing, particularly as it is being proposed in Canada, "is the least effective way to reduce emissions."

Canadians support climate action and carbon pricing. A poll published in January 2015, when Harper's Conservatives where still in power, found that the majority of Canadians said that Canada "should do more" to combat climate change. A total of 69 percent of those surveyed said that they favored a carbon reduction incentive and 59 percent said that they supported "increasing taxes on those activities and products that generate more emissions." While 78 percent supported, "lowering taxes on those activities and products that produce lower emissions," only 44 percent supported “introducing a national carbon tax that would be phased in over time.”

As reported by the CBC an Angus Reid Institute poll at the end of 2015, a solid majority of Canadians see climate change as a serious threat and want to see emissions reductions even if it increases their annual energy costs. The poll indicates that Canadians prefer a cap-and-trade system over a carbon tax.

Although the previous Conservative government claimed that carbon pricing would kill jobs in October last year Desmog reported on a Clean Energy Canada study that indicated action on carbon pricing could create a million jobs in the province of BC alone.

To further refute the claims of the Harper Conservatives, all around the world countries are adopting carbon pricing and the economic hit promised by detractors has not materialized. Carbon pricing has the support of the president of the World Bank and the World Economic Forum, it is already being implemented in Europe, China, South Korea and Mexico

In the US California and other states are showing the carbon pricing works, this includes the RGGI and there are already working carbon pricing schemes in Canada, BC has a carbon tax, Ontario and Quebec have a cap and trade system. Most recently the new provincial government in Alberta has come onside with a carbon levy.

Although the introduction of carbon pricing in Canada may appear to be a major step forward for climate action, there are concerns that the greening of Canada will be financed through the construction of new crude oil pipelines. This would be an oxymoron.

Trudeau and the provinces will meet again in six months to deal with the specifics of the plan.

Related
A Compelling Argument for Carbon Pricing
Video - How does carbon pricing work?
Why we Should Put a Price on Carbon
Why a Carbon Tax May be the Best Way to Reduce CO2 (Video)
Video - The Cost of Carbon
US Cap-and-Trade: What and Why
Green Capitalism

Obama Proposes Oil Tax and Clean Energy Infrastructure Investments

February 11, 2016 Add Comment Edit

President Obama has recently proposed an oil tax and a clean energy infrastructure investment plan that would create a “more integrated, sophisticated and sustainable transportation sector." The proposal is part of a budget request that calls for annual spending of $32 billion and it will be paid for with a $10 a barrel oil tax. The ten year 320 billion is designed to finance a 21st century clean energy infrastructure in the US. This includes annual spending of $20 billion for national transportation initiatives, $10 billion in for cities and states and $2.4 billion for green vehicle research.

The President's proposal is in addition to his successful push to raise fuel-efficiency standards for cars and trucks, green energy subsidies and the clean power plan that will reign in carbon pollution from power plants. He has also succeeded in pushing through a global climate deal in Paris.

This proposal would reduce emissions from the transportation sector which is responsible for almost a third of US carbon emissions. Transportation sector investments include among other things, high speed rail. There are also investments in what is known as the Transportation Income Generating Economic Recovery (TIGER) stimulus program. TIGER awards grants for transportation projects with "measurable economic and environmental benefits.” Another $10 billion a year would go to local, regional and state governments to invest in green infrastructure and more livable cities. The Climate Smart Fund would reward states that make greener choices with existing federal dollars, as well as competitive grant programs to promote region-wide planning, more livable cities, and infrastructure projects with greater resilience to climate impacts.

In addition to the tax on oil and clean infrastructure investments, the Obama administration is also creating private sector incentives for low carbon technologies. Together these cleantech investments will not only enable the US to transition away from fossil fuels they will create jobs and grow the economy.

Despite the fact that Obama's plan would supply jobs, drive the economy and advance climate action, Republicans can be counted on to kill the proposal. While environmental groups lauded the fact that Obama is standing up to big oil and putting a price on carbon pollution. Conservatives,well known for their opposition to climate action, say that they are concerned that gas prices could increase by as much as 25 cents a gallon.

"President Obama's proposed $10 per barrel tax on oil is dead on arrival in the House," Majority Whip Steve Scales (R-La.) said in a statement. "The House will kill this absurd proposal."

The oil industry, which has seen declining profits is also pushing back against the plan spinning the proposal as a jobs killing tax grab that will hurt consumers.

"The White House thinks Americans are not paying enough for gasoline, so they have proposed a new tax that could raise the cost of gasoline by 25 cents a gallon, harm consumers that are enjoying low energy prices, destroy American jobs and reverse America’s emergence as a global energy leader," American Petroleum Institute President Jack Gerard said in a statement.

The White House does not deny that the President's clean transportation proposal would increase fossil-fuel prices, however they said that this would create "a clear incentive for private-sector innovation to reduce our reliance on oil and invest in clean-energy technologies that will power our future."

There is little chance that Republicans will turn on their petrochemical puppet master. However, a future administration and legislators with more common sense will eventually get behind the initiative.

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A Compelling Argument for Carbon Pricing
We Can Reduce Emissions and Tackle Climate Change
Curbing Fossil Fuels - Carbon Pricing and an End to Subsidies (WEF Summaries)
The Prospects for Putting a Price on Carbon
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US Cap-and-Trade: What and Why
US Cap-and-Trade: Obstacles and Solutions