Headline news
Bush proposes international clean energy technology fund
September 28, 2007
UK's Stern calls on 'rich' nations for 75% cut in greenhouse gases
September 27, 2007
RGGI states shoot for quarterly allowance auctions starting in 2008
September 18, 2007
Western states set target that will drive regional carbon trading
August 27, 2007
US house panel passes bill requiring federal carbon offsets
June 19, 2007
New Bush climate plan receives mixed reaction
June 5, 2007
Global energy firms partner on offset standards
May 25, 2007
Bush proposes international clean energy technology fund
September 28, 2007 (Emissions Daily) -- The US wants to lead the creation of an international clean energy technology fund that can be used to finance greenhouse gas reduction projects, President Bush said September 28 in a speech at a US-led climate change summit.
Bush has asked Treasury Secretary Henry Paulson to head up the effort and Paulson "will have initial discussions with countries [that may participate] in a few weeks," Bush said.
Bush's remarks, on the second and last day of the summit, were intended to motivate the 18 countries in attendance to set a long-term global GHG target that can be the basis of an international agreement to replace the Kyoto Protocol, which expires after 2012.
He hopes the summit will lay the groundwork for United Nations talks on a post-Kyoto Framework in Bali, Indonesia, in December. Bush added that to date, the US and Japan have funded the bulk of international research on clean energy technology.
Bush also touted the role of US nuclear power in avoiding GHG emissions. He said that more than 100 nuclear power plants have helped prevent 2 billion metric tons of CO2 equivalent per year.
Bush praised the world's major economies for agreeing to discuss a long-term goal. "By setting a goal, we acknowledge there is a problem and by setting a goal, we acknowledge there needs to be a solution," he said.
The challenge for countries on the intertwined issues of climate change and energy security is to produce "fewer [GHGs] without undermining our economies or preventing developing countries from providing for their people," Bush said.
White House Council on Environmental Quality Chairman James Connaughton told Platts that summit delegates did not begin talks on specific targets until Friday afternoon. Those discussions were continuing at press time.
Bush drew applause from delegates when he said that the proper venue for crafting the next international climate change accord was the UN Framework Convention on Climate Change.
International reaction to the president's speech was limited initially as EU delegates are set to hold a press briefing late Friday. But John Ashton, UK climate envoy, called the pace of the summit slow. "We need to finish the talking about talking," he said.
The president also reiterated the US mantra that a new international agreement on climate change would allow countries to design separate strategies reflecting their individual energy usage, economic needs and state of development.
"Each nation must decide for itself the right mix of tool and technologies," he said.
Bush's remarks echo longstanding US policy on climate change and its objections to the Kyoto Protocol, which require industrial nations to reduce their GHG emissions by a certain percentage below 1990 levels by 2012. The administration has been critical of what it calls Kyoto's "top-down" and "one-size-fits-all" approach.
The US administration's goal at the meeting is to begin discussions to develop proposals to "pave the way for a new international agreement" to succeed the Kyoto Protocol, which expires in 2012, Bush said.
The countries at the meeting account for the majority of the world's greenhouse gas emissions. Also in attendance were representatives from the UN and the European Union. Bush cited a number of clean energy technologies his administration supports including clean coal, hybrid vehicles, cellulosic ethanol and hydrogen-powered vehicles. He also stressed the need to build "safe" nuclear power plants; eliminate tariff and non-tariff barriers on clean energy goods and services and reduce deforestation.
Domestic players blast Bush approach
US reaction to Bush's speech was largely negative.
"The president talked movingly about what technology can do to stop global warming someday, but he still offered nothing the United States would be willing to do today, and that's what everybody is waiting for," said National Environmental Trust President Philip Clapp in a statement.
"None of the technology investments he listed as US accomplishments has done anything to cut global warming pollution. US emissions are rising one-and-a-half times faster than they were 10 years ago," he added.
Senate Environment and Public Works Committee Chairwoman Barbara Boxer, Democrat-California, said the speech fell short of what's needed from the executive branch. "The president claims he is committed to action on global warming, but he has failed employ the two most effective tools we have -- mandatory cuts in carbon pollution and a cap-and-trade system," she said in a statement.
The summit "laid bare key differences between the approaches favored by the Bush administration and by most other governments," said Eileen Claussen, president of the Pew Center on Global Climate Change, in a statement. The Bush team had "hoped to sway other governments to its vision of a voluntary international framework. Under this approach, as President Bush described it in his address this morning, countries would agree on a long-term global goal but each would decide independently what its contribution to meeting it would be. Thankfully, other countries rejected the idea that the climate challenge can be met through voluntary measures alone, and emphasized the need for new international commitments," she said.
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UK's Stern calls on 'rich' nations for 75% cut in greenhouse gases
September 27, 2007 (Emissions Daily) -- Sir Nicholas Stern, the UK economist that prepared a landmark 2006 study on the economics of cutting greenhouse gases, told US congressional staff on September 21 that the United States, EU countries and other industrialized nations should agree this year to cut emissions 75% below 1990 levels by 2050.
Stern gave limited attention to the details of carbon markets.
But he said a global price on carbon was needed to correct "the biggest market failure we've ever seen," but he was reluctant to endorse a cap-and-trade regime over a carbon tax. He said both approaches have "strengths and weaknesses."
Noting that Congress appears to be leaning toward a cap-and-trade approach, Stern rebutted critics of allowance price volatility by saying that a direct tax on carbon could result in volatility of emissions. He said cap-and-trade programs with auctioning of allowances would guarantee GHG cuts and move the approach closer to a direct tax.
Speaking at a briefing held by the Energy and Environmental Studies Institute, said "the rich [countries] should take the bulk of the responsibility for financing the change" to a low-carbon economy for the world. Globally, nations should commit to a 50% reduction by 2050, he said.
Stern's talk was intended to inform congressional staff and their bosses in advance of the UN-sponsored climate change negotiations that will take place December 3-14 in Bali, Indonesia. US experts expect a large contingent from Congress to attend the meeting, known as the Conference of the Parties to the Kyoto Protocol. Part of what will be discussed there is what climate change framework should replace the Kyoto Protocol, which expires with the December 31, 2012 compliance deadline.
Stern said that a 50% cut in emissions from all countries should help stabilize GHG concentrations at around 500 parts per million. His view is consistent with the position that EU negotiators are bringing to a US climate change summit next week on GHG reduction goals. A European position paper circulated this week said delegates welcome the US summit and they hope to use " this initiative to build an agreement on a global goal for emissions reductions, which the EU considers should be at least 50% below 1990 levels by 2050."
Many scientists have said stabilizing GHG concentrations in the atmosphere between 450 and 550 ppm is needed to avoid "dangerous human interference" with the earth's climate. Current concentrations are at about 430 ppm and increasing 2 ppm each year, Stern said.
The "Stern Review," as his report was called, concluded that cutting emissions to the levels he is advocating would cost the world about 1% GDP per year. Stern noted that the International Energy Agency and the Intergovernmental Panel on Climate Change later concluded that the costs would likely be less than he forecast.
"I'm not pretending it's easy, but it is equally a small cost compared to the damages" from climate change.
He said the "global deal" is in the interests of all nations because many low-lying, valuable areas including Miami and Calcutta are at risk for sea level rise. Cities such as New Orleans and Bombay are vulnerable to more frequent and intense hurricanes linked to climate change.
"All we need to do to drive policy is to recognize the magnitude to those risks," Stern said.
And he rejected the ideas that major economies with the fastest growing emissions are not doing anything to deal with carbon.
"China is reforesting, not deforesting," he said. Deforestation accounts for about one-fourth of global GHGs annually. "It has placed export taxes on energy-intensive industries. You can't sell a car in China that doesn't meet the country's emissions standards," which are more stringent than US ones, Stern said.
Still more must be done soon because the "ratchet effect" of emitting GHGs that will stay in the atmosphere and affect the climate for 100 years will make "it impossible to back off" from dramatically rising seas, storms and droughts.
"We don't have a massive vacuum cleaner to suck CO2 out of the atmosphere although I hope we find one," Stern said. "The point is, the actions we take now will determine whether we're able to stabilize at or below 550 [ppm]."
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RGGI states shoot for quarterly allowance auctions starting in 2008
September 18, 2007 (Emissions Daily) -- The states that comprise the Regional Greenhouse Gas Initiative are likely to hold their first carbon dioxide allowance auction in 2008 and hold one auction a quarter thereafter for allowances for the years through 2011, a New York power regulator said on Sep. 11.
Speaking at an Infocast conference in Washington, Mark Reeder, the head of regulatory economics for the New York Public Service Commission, said that because GHG emissions have no internal costs for power companies or other businesses, "the near-term market signal stinks."
But programs such as RGGI "can fix the market," he said. Under RGGI, 10 states stretching from Maine to Maryland will require roughly 300 power plants to cut their CO2 emissions by 10% between 2009 and 2019 through a cap-and-trade program.
RGGI states are moving toward quarterly CO2 allowance auctions starting in 2008 based on preliminary recommendations from the University of Virgina and economics think tank Resources for the Future.
RFF and the university received money to study how best to auction off 100% of allowances from the New York Energy Resources Development Authority, which is working closely with the PSC and the state's Department of Environmental Conservation on RGGI implementation.
Reeder said that allowances for each three-year compliance period under the program will be fungible and power companies can borrow allowances for forward years in the distinct compliance periods.
The top priority for RGGI states is finalizing an auction design and getting that process set up, Reeder said. New York would prefer that RGGI states have auctions together rather than holding them individually, he added.
"States should auction off the allowances in a coordinated fashion so you have the broadest possible marketplace," Reeder said.
RGGI states are grappling with a few related issues as they contemplate auction design, Reeder said, such as an excess supply of allowances for the first six years of RGGI.
Linked to that, allowance prices below $1 are a concern because it could result in "gamesmanship," Reeder said, adding: "Having a minimum CO2 allowance price could work if all the states could agree" to address the concern.
He suggested that a nuclear generator, which doesn't need allowances because it has no GHGs, could buy 40% of the available allowances to drive up the price of allowances and power it sells. The price of allowances is expected to be embedded into wholesale and retail power rates in RGGI states.
Among the other issues RGGI states are considering is how to adjust allowance prices if CO2 permits under a federal cap-and-trade program are different than they are under RGGI, Reeder said.
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Western states set target that will drive regional carbon trading
August 27, 2007 (Emissions Daily) -- Six western US states and two Canadian provinces on August 22 proposed to use a carbon cap-and-trade program to cut greenhouse gas emissions from virtually all man-made sources 15% below 2005 levels by 2020. They plan to unveil the western regional trading program within a year.
Arizona, California, New Mexico, Oregon, Utah and Washington along with British Columbia and Manitoba agreed to the economy-wide target for reducing greenhouse gases as part of the Western Climate Initiative. Their next goal is to develop by next August a regional market-driven system, such as an emission allowance cap and trade program, to achieve these emission cuts.
The states of Kansas, Colorado, Wyoming and Nevada, the Canadian provinces of Ontario, Quebec and Saskatchewan and one Mexican state, Sonora, plan to participate as observers in the process. Those seeking to join WCI must install greenhouse gas emission goals consistent with the regional initiative's goal, according to the group. The WCI regional goal would not replace climate change goals set by the individual members.
Unlike the Regional Greenhouse Gas Initiative, a GHG reduction effort undertaken by northeastern US states that is aimed solely at power plant emissions, the western initiative would seek to limit emissions that contribute to global warming from all sources -- including energy supplies, transportation, and the commercial, residential, and industrial sectors.
RGGI, formed by 10 states stretching from Maryland to Maine, has set a target of reducing these emissions to 10% below 2000 levels come 2019 from fossil fuel-fired generation. RGGI plans to employ a cap-and-trade system starting in 2009.
The governors who launched the WCI in February expect the Western effort to be ready in time to be allied to those in other parts of the country and the world to reduce the threat of global warming.
"Our collective commitment will build a successful regional system to be linked with other regional efforts across the nation and eventually the world," California Governor Arnold Schwarzenegger, one of the WCI's founders, said in a statement.
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US house panel passes bill requiring federal carbon offsets
June 19, 2007 (Emissions Daily) -- A US House committee on June 12 approved by a voice vote legislation that would require all federal government agencies to offset their greenhouse gas emissions.
Offsets are a key component of a comprehensive GHG markets program.
The Oversight and Government Reform Committee passed the "Carbon Neutral Government Act of 2007" (H.R. 2635) after delaying a public markup on it and other less-controversial bills to conduct closed-door talks on changes to the measure.
Committee Chairman Henry Waxman, a California Democrat, agreed to two amendments offered by Republicans.
The first, authored by Representative Darrell Issa, Republican-California, would allow non-governmental organizations to sue the federal government in the US Court of Appeals in Washington DC for failing to comply with the GHG offset requirements. Waxman said the committee may make further changes to the new provision after the Congressional Research Service studies the issue of "legal standing" in the legislation.
The Issa amendment also limits damages that can be sought by groups suing the government for noncompliance at $1.5 million (€1.1 million) per year. "Rather than sending fees to lawyers, we want money spent mitigating GHGs and getting full compliance from our federal agencies," Issa said.
The committee also accepted an amendment by Representative Patrick McHenry, Republican-North Carolina, that requires federal agencies to disclose any cost savings resulting from the legislation's energy efficiency requirements.
McHenry withdrew a separate amendment aimed at ensuring that agencies don't spend money to comply with the legislation if that funding should be used for their core missions, such as defending the country in the case of the Department of Defense or Department of Homeland Security.
A committee spokeswoman said a date for a floor vote by the full House on the legislation has yet to be set.
The legislation requiring the offsets would take effect only if Congress has not enacted a federal GHG cap-and-trade program by 2010.
H.R. 2635, which notes that the government is the largest US energy consumer and emits 100 million metric tons of CO2 equivalent annually, also would require the Environmental Protection Agency and other federal agencies to measure and report their GHGs each year.
In addition, the bill would would subject US government agencies to energy efficiency standards and impose on the federal vehicle fleet California's GHG emissions standards for cars and trucks.
The California standards, which would require automakers to start manufacturing cars and trucks that emit 30% less GHGs than existing vehicles starting with the 2009 model year, are the subject of an industry lawsuit pending in a federal court.
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New Bush climate plan receives mixed reaction
June 5, 2007 (Emissions Daily) -- World leaders and industry figures gave a mixed reaction on June 1 to US President George Bush's new international plan to tackle global warming, unveiled on May 31 ahead of the G8 summit in Germany.
EU Commission President Jose Manuel Barroso said Bush's plan to boost international energy efficiency and renewables standards -- while rejecting emissions caps -- lacked ambition, while some G8 leaders interpreted the plan as a sign of progress in Washington.
In a briefing on May 31, White House senior environmental official James Connaughton said America will this year host the first meeting of an 18-month US-led effort aimed at developing an international greenhouse gas reduction framework, speaking ahead of a meeting of the Group of Eight industrialized nations in Heiligendamm set for June 6-8.
In a speech on May 31, Bush proposed that "by the end of next year, America and other nations will set a long-term global goal for reducing greenhouse gases" in consultation with major GHG-producing nations, including fast-growing China and India.
Although he gave no indication of the size of emission cuts that Washington might commit to, the fact that the president was reversing long-standing US opposition to joining a global deal was hailed by other G8 leaders as a major development.
Bush plan 'lacks ambition' says EU President
Barroso on June 1 called on President Bush to show more ambition on climate change despite his pledge to work with his G8 counterparts on the issue at the upcoming summit.
Barroso said he did not believe that Bush's promise to work with his fellow G8 leaders to create a new framework to cap GHG emissions made it more likely that a commitment on the issue would be struck at the G8 summit.
"I hope that the United States intends to use the meeting as an opportunity to make the G8 summit contribute towards the UN's multilateral climate protection system," Barroso said.
Barroso said: "In the US Congress there is very visible support for more ambitious proposals. It is all just a question of time. I hope we will make a genuine breakthrough in 2009 for the post-Kyoto era."
Meanwhile, EU energy commissioner Andris Piebalgs on June 1 welcomed President Bush's proposal for cutting GHG emissions as "groundbreaking."
But EU environment commissioner Stavros Dimas was quoted by one agency as saying Bush's proposal "basically restates the US classic line on climate change -- no mandatory reductions, no carbon trading and vaguely expressed objectives."
"The US approach has proven to be ineffective in reducing emissions," Dimas was quoted as saying. "Mandatory reductions, carbon trading and specific commitment and timetables have allowed the EU to reduce its emissions by 1.5% in 2005 under the 1990 levels, while the US has increased them by more than 16% in the same period."
G8 leaders welcome Bush plan
In contrast to the criticism from EU President Barroso and other EU officials, some G8 leaders welcomed the US proposal for capping GHG emissions as an important, if largely symbolic, step forward in the global fight against climate change.
Britain, Germany and Japan applauded, with varying degrees of enthusiasm, the initiative unveiled by Bush on May 31, as questions remained about the substantive details.
"This is what we have been working for," said British Prime Minister Tony Blair. "Obviously it's a big step forward and it sets the right framework for next week's meeting," he said, adding that any new agreement for when the Kyoto Protocol expires in 2012 needed to involve China, India and the United States.
German Chancellor Merkel called the initiative "an important statement" but gave no sign of backing away from efforts to secure a binding G8 agreement on limiting carbon emissions.
Japan welcomed what it described as a sign of Washington's "strong will" to address climate change.
Australian Prime Minister John Howard on June 1 welcomed Bush's plan. Australia and the US are the only two industrialized countries not to have ratified the Kyoto Protocol and both have come under fire for failing to respond fast enough to climate change.
Bush plan 'an attempt to derail Kyoto': FoE
Some environmental groups saw Bush's initiative as a cynical ploy to excuse the United States from tougher emission reduction agreements currently under discussion.
Bush's proposal "can only be seen as a transparent attempt to derail negotiations that are already going on in the G8 and the United Nations," Friends of the Earth's director Tony Juniper said in a statement.
"If the president wishes to be taken seriously on the subject of climate change he needs to arrive in Germany next week with a willingness to negotiate rather than a determination to wreck talks which are already going on," Juniper said.
Meanwhile, Greenpeace wasted no time in panning the latest announcement from Washington. A spokesman for the group said Bush had attempted a "late night mugging" of the Kyoto Protocol.
"When it comes to environmental destruction, George Bush is in a presidential league of his own. To now claim that he is a leading steward of the environment shows how deeply unserious this man is. It is unbelievable that Tony Blair could possibly take this new announcement seriously," he said.
Andrei Marcu, president of the International Emissions Trading Association, said the Bush plan is a step in the right direction.
"There is a lot to be fleshed out -- this is just an announcement -- but it is very encouraging to see the US rejoining the international discussions. However, this effort cannot be allowed in any way to interfere with the negotiations under the [UN] Framework Convention on Climate Change, which were accepted under the Gleneagles framework as being central to addressing the issue of climate change."
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Global energy firms partner on offset standards
May 25, 2007 (Emissions Daily) -- Global power firm AES and General Electric are developing their own standards for greenhouse gas offset projects the two companies are developing amid increased press scrutiny of these types of projects.
GE's announcement follows concern in Europe that media scrutiny aimed primarily at non-regulated offsets could taint projects funded under the Kyoto Protocol's mandatory emissions caps. The Kyoto offsets market has two types of offset projects reviewed and approved by national governments and the United Nations. One is offset projects in developing countries through the Clean Development Mechanism. The other is for projects in industrialized countries under the Joint Implementation program. The UN issues independently verified Certified Emissions Reductions for CDM projects and Emissions Reduction Units for JI projects.
GE and AES are developing offset projects in the voluntary carbon offset market, which is used by companies and individuals seeking to offset their emissions without necessarily cutting GHGs at their facilities or in their personal activities.
Kevin Walsh, the director of GE's renewable energy unit, discussed the companies' preliminary work on developing their offset standards, during the first day of the Environmental Markets Association May 6-8 conference. Walsh came to accept the EMA's first-ever environmental markets leadership award, on behalf of GE, named after Canadian economist John H. Dales. Dales published a book in 1968 calling the creation of tradable pollution rights, which later became allowances in emissions, to cut releases of chemical in the environment.
Walsh said the AES-GE offsets will be "independently-verified" and "high quality" and "strict" in outlining some of the initial principles on which the companies' offset standards will be based. The companies plan to first develop standards for landfill-gas projects, coal bed methane projects and some agricultural waste projects. Without emissions capture technology, each of these projects release Gags. Landfill and coal-bed methane projects have been a major source of GHG offsets under the CDM.
The offset standards effort by GE and AES is a serious effort to address any misperceptions about offsets. "We have no intent to put our brand at risk," Walsh said. The companies intend "to set the bar high here as we go forward" with the offset standards.
Asked during the question and answer session whether the AES-GE effort could muddy perceptions of offsets by issuing standards that are not guaranteed to be the sole offset standard, Walsh said "we think there is some chance that our standard will become the industry standard."
Walsh also announced that GE received $12 billion worth of low-carbon products including energy efficient light bulbs, hybrid locomotives and other products created under the company's "ecomagination" initiative.
He also noted that the company avoided some GHGs through its own energy efficiency projects that saved the company $70 million in energy costs during 2006.
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Full versions of these articles were originally published in Platts
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