The Climate Change Act 2008 has committed the UK to reach a target of 20% renewables by 2050, whilst at the same time the UK has pledged to achieve 15% of this by 2020 as part of the European climate deal.

However, whilst such plans to catalyse the renewables industry are generating further interest from private sector investors, there remain a number of limiting factors which must be ironed out for timely project development and completion.

The wind power sector presents a key example of this, as 262 projects representing seven giggawatts are held up due to lengthy planning delays. Government officials from the Department of Energy and Climate Change (DECC) recognize the major barriers presented by the Planning Act for wind projects, and plan to launch a renewable energy strategy to understand methods of overcoming existing challenges in the system. But should we have seen this coming? Wind power represents the strongest renewable power source across Europe, and was the fastest growing renewable energy sector last year.

The British Wind Energy Association (BWEA) highlights that in order to meet the 15% renewable target, Britain must generate 30GW of wind capacity – 20GW of which could be generated offshore. The remaining 10GW must be generated onshore, building upon the existing 2.5GW we currently generate, but ongoing planning delays have made investments in the UK less attractive. The average timescales of gaining planning permission in England range from 15-20 months. This along with mounting construction costs which threaten the economics of many wind projects have already forced Shell and BP over to the United States, and Centrica (which owns British Gas) is becoming increasingly concerned over the fate of their 250-megawatt scheme off the Lincolnshire coast.

Europe’s biggest onshore wind farm became operational in early December, providing enough energy for up to a million people in northern Portugal – putting them well on the way to developing an oil-free energy infrastructure. Whilst the project represents only 1% of national consumption, it is a great step forward and has highlighted Portugal’s government enthusiasm, subsidies and special tariffs to make it happen. Something for the UK government to carefully consider in such difficult times.

The economics of reducing greenhouse gas emissions are a complicated business. And this is especially true when you want to set up a domestic cap and trade system in a carbon-dependent economy, a process both the USA and Australia are in the process of beginning to work through.

At the outset there are the problems of setting a floor and ceiling price for carbon; this ensures that it remains scarce enough to be expensive but in supply enough to prevent a domestic economic squeeze from soaring prices.

Another issue is how the permits will be given out to emitters. This is the problem that the new EU climate deal has being grappling with. On one hand, auctioning permits increases the initial price of carbon and so further reduces willingness to pay; at the same time an a

uction also generates funds for other climate change policies, such as grants for clean technology. However, on the other hand, as the EU has found, auctions are politically rather unpalatable–so much so that the EU has agreed to only auction 30% of the second round of ETS permits. As well as economic prices, then, there are political prices to take into account.

Once the price and distribution has been set, there is still the question of coordinating the system. This is emerging as a particularly important variable in the Australian carbon trading scheme. While at the federal level the purchase price of carbon is capped at AUS$40 per tonne, a report released today shows that in New South Wales the state government has been buying permits up from companies at AUS$240 per tonne.

In effect the NSW government has been paying companies a vastly inflated price to force them to reduce emissions. These kind of actions heavily distort national markets, especially those still in their infancy; in this case, they give a competitive advantage to companies in NSW in a low-carbon economy compared to those who have not been injected with capital in this way.

Pricing, Politics, Coordination: three issues that the architects of domestic carbon markets need to tackle in order to get these systems working effectively. As yet the details of soon-to-be President Obama’s domestic cap-and-trade system have not been finalised or released. However, in a country that is traditionally market-driven, with powerful industrial political lobbies, and that is highly geographically diverse and decentralised, the Pricing, Politics, and Coordination questions are big ones to answer.

India’s strong position on climate change was reaffirmed this year at COP-14. It remains staunchly focused on a ‘common but differentiated’ principle, whereby those who are historic emitters of GHGs should be the mitigators under an international climate policy regime. As a result, India refuses to take on emissions caps or cuts. So what is India doing to combat climate change within this position? Is it feasible for it to do nothing?

Well, no, not really. Both politically and environmentally it is still required to slow its growth of emissions so that it doesn’t become the net historical emitter in years to come. Like many of the rapidly industrialising countries, India launched a National Climate Change Action Plan in 2008. Much of it focuses on low-carbon and clean growth, especially the use of renewables in energy.

By 2030 India wants to have 49% of energy from renewable sources, including 15% from hydro. In addition, to promote its focus on energy, India is hosting a Green Energy Summit in March 2009, where it hopes to showcase its leadership on clean energy growth.

The context for this focus on energy growth is India’s soaring demand for energy; it is expected that by 2030 India will require 400,000 MW of power, up from 130,000 MW today. Such demand is putting considerable pressure on existing energy sources and so is making the use of renewables more attractive.

India’s climate plan also allows India to continue growing and filling its energy needs, while at the same time reducing future emissions from future ‘dirty’ growth.

However, while having an energy-dominated climate package suits India politically and economically, it is unlikely to be so simple in practice. There are two main reasons for this.

Firstly, within India. These energy projects, which are extremely large, need to be funded. India wants a significant portion (we don’t know the exact number) of this to some of this to be through the CDM. However, if renewables are part of government programmes and targets then CDM projects are not necessarily additional–that is, they may not actually be reducing emissions more than if the project had not been financed by CDM. All CDM projects must be additional, a rule that is designed to prevent countries simply using the climate change framework to fund growth that they need and would have paid for themselves. Is India simply using climate change finance to fund an energy plan it was going to implement anyway?

Secondly, outside India. There is concern from parties, such as the USA, that focusing climate efforts on energy policy in the fails to deal with other key areas. At his press conference in Poznan, John Kerry outlined that the new US Government will want to see comprehensive plans from major developing countries. India’s focus on changing energy supply rather than tackling energy efficiency and use might not be what one would call ‘comprehensive’.

At the domestic and international scales India will need to show that its action on climate change is more than an energy plan dressed with climate change politic. At present it is China, Mexico, and Brazil that are seen as at the forefront of developing country action precisely because of the more comprehensive nature of their plans–including reducing existing emissions. India risks being separated from this group further if ‘climate’ doesn’t become more than ‘energy’.

Irrigation in Africa (source: fao.org)

Last week, ministers from 53 African countries gathered at a FAO summit in Libya, entitled “Water for Energy and Agriculture in Africa: the Challenges of Climate Change”. It was timely. Irrigated land forms 38% of all land in Asia, but only 7% in Africa, and Africa’s food needs will triple by 2050 if population growth continues at current levels.

Many parts of Africa are already seeing diminishing water resources (as a result of both over-abstraction and climate change), and IPCC predictions suggest this will worsen in many areas, particularly the Sahel.

As is the case with many summits, a main outcome was the call for another summit, this time a bigger one, with all world heads of State and government. FAO suggested this could help find the $30 billion a year that is needed for investment in Africa’s water and rural infrastructure.

More investment is indeed urgent. Agriculture and water have fallen down the development agenda in recent years, as health and education have risen to the fore. This has been reflected in aid levels.

However, the issue of water, particularly as climate change starts to bite harder, must always be tackled holistically. There are numerous users competing for scarce resources: farmers, industry, and most importantly, people drinking the stuff. Only 58% of Sub-Saharan Africans have access to a safe drinking water supply.

Whilst it is crucial to increase water access for agricultural purposes, the poor must not be cut off for the benefit of agribusiness. Mechanisms must be developed for water resource management at a local level which take into account the voice of all users. Without this, the rich and powerful will prevail.

As Africa adapts to climate change, the mantra “some for all, not all for some” must be followed with regard to water, if resources are to be shared equitably and sustainably.

IIED matrix (source: iied.org)

The International Institute for Environment and Development (IIED) produced a policy brief earlier this month concerning the integration adaptation into development planning.

This is an issue which has formed much of the adaptation discourse of late. Should we make adaptation a separate box to be ticked in every initiative? The pro argument is “Yes, because it will ensure that adaptation is not forgotten or ignored”. The anti argument however follows these lines: “No, because it will do precisely the opposite – adaptation will become everything and nothing. We need initiatives that focus specifically on adaptation.”

This is not a new argument. The issue of “mainstreaming” in development discourse has been focused on issues like gender and HIV/AIDS in recent years. The evidence is not conclusive, but it can generally be seen to have had a positive effect. These issues have become more than buzzwords. The “mainstreaming agenda” does at least force the project designer to take such issues into account.

The IIED report falls on the pro side of the argument, and I am inclined to agree with it. The World Bank has estimated nearly half of all donor-funded development projects are sensitive to climate risk. It therefore seems ludicrous not to force planners to take adaptation into account at every step. Furthermore, this is of course about more than just donor-funded projects – this is about all development efforts.

The IIED tries to get behind the rhetoric on mainstreaming, and proposes a 4-step agenda for making it a reality – awareness raising, targeted information, pilot activities, and only then, full mainstreaming. This ensures that adequate information and understanding are present at all levels, so “adaptation” becomes more than just another box to tick.

For those not acquainted with the Bush Administration’s latest pastime I should probably introduce the concept of the ‘midnight ruling’.  Late in a presidency, an administration will often issue rulings that are unpopular but uphold the President’s worldview.  President Bush’s recent midnight rulings have predominantly been concerned with environmental deregulation.  The latest of these concerns the carbon dioxide emissions produced by coal-fired power plants.

As I reported earlier, a decision to disregard a Utah coal power plant’s carbon emissions when considering its environmental impact was overturned last Novermber.  However, on Thursday Stephen L. Johnson, the head of the Environmental Protection Agency (EPA), went on the record to reject November’s overturning, “the current concerns over global climate change should not drive [the] EPA into adopting an unworkable policy of requiring emission controls.”

California Senator Boxer soon issued a statement responding,

This illegal document issued by Stephen Johnson makes it clear that he has become a renegade administrator…  Mr. Johnson’s latest action is intended to make the job of combating global warming more difficult and will add to the millions of taxpayer dollars he has wasted in defending his illegal decisions.

Boxer also wrote a letter (available here) to the Attorney General asking him to “intervene immediately” with Johnson’s “blatantly illegal memo.” Senator James Inhofe, who frequently clashes with Boxer, responded with a statement siding with the EPA.

So what does all of this mean?  Well, first that the regulation of CO2 (or lack of) has been one of the defining features of the President Bush’s time in office, and that he is keen to ensure that greenhouse gases are not controlled during his presidency. Obama has pledged to use his “executive authority without waiting for congressional action” to reverse Bush’s midnight rulings. The Natural Resources Defense Council (NDRC) issued a statement saying,

The ultimate consolation, however, is that today’s EPA offense is so ham-handed, so divorced from the law, that it can and should be reversed by the Obama administration with the stroke of a pen.

If the Attorney General does not intervene (which is, in my opinion, likely) then there will be a number of coal-fired power stations that progress far enough down ‘the pipeline’ that Obama will not be able to stop their being built when he takes office on January 20th.  The Justice Department said that it would review Boxer’s letter and respond appropriately, to which Joe Romm of Climate Progress replied, ““Appropriately”? This is the Department that signed off on torture. What the heck is a few coal plants to them?”

Yesterday, Obama appointed John Holden as his Chief Science Advisor and Jane Lubchenco to head the National Oceanic and Atmospheric Administration (NOAA), which carries out most of the government research on climate change. Both have advocated greater government action on climate change.

“This is a superb appointment,” Sir David King, former UK chief scientific advisor, told the Observer. “Holdren is a top-rate scientist and his position on climate change is as clear as you could get. This is a signal from Barack Obama that he means business when it comes to dealing with global warming.”

Holdren has described the Bush Administration’s current approach to climate policy as like “being in a car with bad brakes driving towards a cliff in the fog.” (hat tip to Treehugger)

Alongside Steven Chu and Carol Browner, Holdren’s announcement puts three big-hitters advising Obama on climate change policy, so it will be intersting to know who will have the most sway with the incoming president.  It is likely that it will not be Holdren, as he does not control a government agency nor administer a large budget.  Additionally, in his new position he can be called upon to testify before congress, which means that Obama will be less likely to share politically-sensitive information with him. (hat tip to New Scientist)

My ‘most influence vote’ would go to Browner, who headed up the Environmental Protection Agency (EPA) during the Clinton Administration.  She will have “forceful support” in Congress according to the New York Times, and being located in 1600 Pennsylvania Avenue* can’t hurt her chances!

In subtle recognition Al Gore’s work, Obama said during his announcement, “It’s about listening to what our scientists have to say, even when it’s inconvenient — especially when it’s inconvenient.”

* that’s the White House for those not in the know!

In Bali last year, the ICC and WBCSD, as representatives of global business at the climate talks, named their one-day side event “Tri Hita Karana”, a proverb taken from a Balinese philosophy which emphasizes that happiness can only be attained if the Creator, people and nature live in harmony with each other. This year, the organizers of the Poznan Business Day resisted the temptation to find an appropriate Polish proverb to characterize the spirit of the event.

The most notable policy development at the Poznan Business Day was the growing enthusiasm around sectoral approaches to mitigation, which according to one observer, dominated the workshop. In contrast to mitigation rules that apply to all companies within a particular jurisdiction, sector-based rules apply to all companies across jurisdictions and would therefore not have differentiated effects on trade-exposed industries based in different countries but operating in the same sector (such as aviation, transport, cement)

Not that a sectoral approach wouldn’t create winners and losers. Consider transport and cement, two of the largest-emitting sectors. The charts below illustrate how emissions in the transport sectors are currently highest in North America, meaning that a sectoral approach to mitigating transport emissions would disproportionately effect that region. However, future growth in other regions would even it out in the long-run.

WBCSD

In contrast, cement production (and associated emissions) is overwhelmingly concentrated in Asia, reflecting the demands of the Chinese construction boom.

USGS

Thus, while sectoral approaches may appeal to companies looking for uniform rules in the sectors in which they operate, the appeal to countries (who sit at the negotiating table) is still mixed. But nevertheless, as WRI identified in a report from last year, they do have their appeal; they could induce more countries to join a global climate deal, they address competitiveness concerns, and they focus policy-makers’ attention on key emission-intensive sectors. However, a multitude of sectoral approaches, rather than an overarching global deal, increases the administrative burden that countries face in monitoring and enforcing emission cuts.

What the debate illuminates is the problem of having national governments (with their national political interests in mind) negotiate a deal that works for companies and investors (with an increasingly global sectoral view). They key is for targets to be nationally-based, because only national governments are fully accountable to the public and have authority to regulate and enforce, and implementation to be tailored to the needs of transnational business to ensure cost-efficiency and the necessary investment volumes