The French government is working towards implementation of a direct carbon tax by July 2010. France’s Constitutional Council struck down the first version of the carbon tax bill last 29 December. On 21 January 2010, the government proposed a number of amendments to the original legislation, which is aimed at encouraging French consumers to be more energy efficient and conscious of their energy decisions.

The first version of the bill was meant to take effect on 1 January; halting its inception has been greatly embarrassing to Prime Minister, Nicolas Sarkozy. The legislation was deemed unconstitutional due to a large number of sectoral exceptions. The new version of the bill will maintain the originally proposed 17 EUR per tonne of carbon dioxide with compensation for households. There has been a reduction in the number of exemptions. Though, certain “sensitive and energy-intensive sectors” will still receive special exemptions. Farming and fisheries will pay just one-quarter of the normal rate; road transport and shipping, will only pay 65 percent.

French Environment Minister, Jean-Louis Borloo, has begun a series of consultations with companies, trade unions, and environmental non-governmental organizations concerning the specifics of the legislation. “The goal is to develop a new draft, which will be sent to Parliament for approval by spring,” spokesman Luc Chatel told a press conference after the weekly cabinet meeting.

Under the new proposal, the tax level remains at 17 EUR per metric tonne of CO₂ at over 1,000 of the most polluting sites. The main innovation of the amended bill is the inclusion of previously excluded sectors, such as power stations, oil refineries, and cement works. These plants were exempted in the first version of the bill because they are scheduled to be subject to a European Union quota system to be implemented in 2013. EU regulation calls for emissions in those sectors to be reduced by 21% by 2020.

In late January, a poll released by ViaVoice showed 51 % of the French public thought the government should abandon the tax proposal. “The carbon tax should not be an umpteenth tax used for filling up the state coffers,” small business union CGPME said in a statement. The French government is addressing this concern. It continues to stress that for businesses of all sizes, combined with the reform of local business taxes, the carbon tax will merely serve to transfer taxation away from work and investment. Yet, the debate continues to focus on how to compensate low income households,; due to inefficiency, the tend to use relatively more fuel and many work at night before public transport is running.

“The best would be for it to be ready in 2010 but it’s true that all these details … are complicated,” Michel Rocard, a former Socialist prime minister, said in an appearance on Europe 1 radio. “I don’t know if we will be ready in 2010.”

Last July, Rocard headed a review report of the potential tax for the government. At that time, the burden of the tax was presented as being divided roughly equally between households and businesses. There is no clear indication of how this division will change under the most recent tax proposal.

After a first round of consultations, the French government has unveiled two options for introducing the tax system into industrial sectors already subject to the European emissions quota system.

The first option would levy the carbon tax on all industries, but the introduction would be at reduced rates for companies most exposed to international competition, as well as for those that are the largest consumers of energy. A series of quantitative criteria (yet to be fully unveiled) will be used in order determine the particular rate of tax.

Additionally, under this plan, companies would be entitled to receive a tax credit on investments aimed to reduce both energy consumption and emissions and to prevent industrial risks.

The second option for the tax would construct a bonus-penalty system. All industrial installations would be subject to the tax of of 17 EUR per tonne of carbon dioxide emitted. Under this second plan, each business would receive a lump sum tax credit, dependant upon its efforts made to reduce emissions.

“This is the beginning of a wider process of reflection and consultation,” Economy Minister Christine Lagarde said after the report was presented.

While most politicians agree emissions must be cut to fight global warming, a key part of the debate is on how to compensate poorer households, workers in certain sectors and those who need to drive because they work at night or live in rural areas.

France aims for an 80% reduction in CO₂ emissions by 2050.

France would be the largest economy to apply a direct carbon tax, mirroring existent measures in Denmark, Sweden, and Finland.

In a state not short of green ideas, British Columbia once again looks forward to displaying its green credentials but this time on the international stage. The Vancouver 2010 winter Olympic organisers aim to make the 2010 Winter Olympics a showcase of the state and city’s progress in embracing sustainable eco-values.

Historically, Olympics have not necessarily focused on a legacy being the event itself, as recently as the 2004 Athens 2004, where not even the facilities appeared to stay in use afterwards, giving the impression the Olympics was little more than one-use disposable event, use and discard.

Fortunately, organisers have moved towards demanding that the Olympic events are geared towards the long-term benefit of their host city. One of London 2012′s key arguments was its potential to rejuvenate the East end of London, with new transport links, jobs housing and business opportunities. All of this is well and good, except the Olympic games themselves still have smash and grab air to them, fans from across the world come, at large expense, stay in facilities often that fall into disrepair after and leave a trail of environmental destruction in their wake. Vancouver aims to tackle this head on, although the Winter Olympics is much smaller in scale than a summer Olympics, nevertheless British Columbia’s most populous city aims to develop and display its green credentials by creating a sustainable model.

Efforts are numerous, an expansion of the mass transit SkyTrain system, first developed for the world trade fair, will form a centre piece of the project.  The buildings, are a showcase of green development, dual flash toilets (who said green wasn’t glamorous), rain harvesting roofs, and even a site-wide compost. Buildings to house athletes are expected to receive the US green building council’s LEED gold certificate (the highest possible) and not surprising given they will have green roofs of plants to act as insulators in winter and cool temperatures in the summer.

Yet perhaps the boldest innovation comes in the area of recycling, often overlooked by environmentalists because of its truly unglamorous image, recycling can potentially make savings in carbon cycle, not merely the manufacturing but the shipping of the products is all saved. Macleans has the story:

“diverting 85 per cent of all its solid waste from landfills, starting this fall through next May. That’s no small challenge. The diversion rate in Toronto, where residents fill green bins with food scraps, blue boxes with other recyclables, and pay for what they throw away, is 44 per cent. In the environmentally conscious metro Vancouver area, the rate is 52 per cent. Halifax, which has been running its green bin program for a decade, is only now getting close to its 60 per cent target.”

Whether the ambitious targets for companies working on the 2010 games is more debateable:

“To date, the only corporate sponsor that has unveiled a fully formed waste-reduction plan is Coca-Cola. The beverage giant is vowing to collect 100 per cent of the containers it distributes at the Olympics”

Yet, whether or not the goals are fully realised,   the shift towards sustainability in events which symbolised the disposable culture is a welcome one, putting increasing responsibility on organisers to reduce environmental impact and creating a culture among corporate providers, such as Coca-Cola bodes well not just for future events but in raising expectations in the public sphere of what to expect from governments and business alike in a more environmentally conscious age.

On 30 April, the Ministry of the Environment (MoE) announced the final data regarding the amount of emissions of greenhouse gases (GHG) in the 2007 fiscal year. According to MoE, the amount of GHG emissions in the 2007 fiscal year was approximately 1.37 billion tons (CO2 equivalent), exceeding the amount of GHG emissions in the 1990 base year by 9.0 percent and exceeding the amount of those in the 2006 fiscal year by 2.4 percent. This was the worst result for Japan in terms of GHG emissions.

It was reported that such a surprisingly high increase in GHG emissions was significantly affected by the suspension of operation of the Kashiwazaki-Kariwa nuclear power plant operated by Tokyo Electric Power Company (TEPCO) in the Niigata prefecture as most of CO2 emissions in Japan are energy-origin CO2 emissions.

The Kashiwazaki-Kariwa nuclear power plant has seven units, generating a total electrical output of  8,212 MW, making it the largest nuclear plant in the world by net electrical power rating. Though Japan heavily depended on the nuclear plant, it had to stop the operation because of the Niigata Chuetsu earthquake in July 2007  because the Kashiwazaki municipal government ordered TEPCO not to start the operation of the plan until its safety was confirmed and the Ministry of Economy, Trade and Industry (METI) gave TEPCO a similarly order. Consequently, thermal power stations, emitting more GHG, had to operate more, resulting in increase in CO2 emissions.

Thus, in order to reduce CO2 emissions and avoid electricity shortage in the summer season, the Japanese Government and TEPCO have strongly wanted to restart the operation of the plant. Then, on 7 May, Hirohiko Izumida, the Governor of the Niigata prefecture, announced that he acknowledged a request from TEPCO to restart its operation. Though TEPCO consequently started the trial operation of Unit 7 of the plant on 9 May, problems were found in its reactor core isolation cooling system in its trial operation. As a result, though it was expected that the plant was going to start its operation in the end of June, it became unclear whether the plant was able to do so.

If the operation is delayed, Japan again would need to heavily depend on thermal power stations in this summer and CO2 emissions would increase compared to the condition in which the nuclear plan could operate. However, it may be apparent that the safety of the nuclear plant has not been confirmed. As well as problems of the plant found in the trial operation, it has been still questionable whether the plant is really earthquake resistant. Indeed, constructing nuclear plants in Japan, where a huge number of earthquakes happen, seems really scary. As Japan seems most unsuitable for constructing nuclear plants considering earthquakes, Japan may be one of the countries that should immediately increase renewable energy production in order to reduce CO2 emissions and simultaneously avoid electricity shortage.

Climatico’s Jennifer Helgeson gives her impressions and conclusions from this week’s Climate Congress

The science that will direct the UN Climate Change Conference to be hosted by the Danish Government in December 2009 was discussed by more than 2500 delegates from almost 80 countries from 10-12 March 2009 in at the Copenhagen Climate Congress. The 3 days were jam-packed with 58 parallel focused discussion sessions, hundreds of poster presentations, and a series of plenary meetings lead by some of the most well known players in the field of climate change mitigation and adaptation.

The Congress’ Scientific Writing Team has identified six key messages, which were publicly presented to the Danish Prime Minister, Mr. Anders Fogh Rasmussen. The “Big 6″ are presented in short below.

The output of the conference is now in preparation, and will be published by Cambridge University Press as a point of reference for the academic community. A report of the Congress is to be prepared by June 2009 and handed over to the key decision makers before the December COP meeting.

And here are the “Big 6″ Key Messages of the Congress:

1. Climatic Trends: Things are not looking so good. The worst-case IPCC scenario trajectories (or even worse) are being realized. The risk of irreversible climatic shifts are increasing…

2. Social Disruption: Recent observational studies report that societies are vulnerable to even very modest levels of climatic change. Poor nations / communities are particularly at risk…

3. Long-term Strategy: we need stringent and binding targets now and long into the future. Due to the issue of stocks of carbon dioxide, delay in initiating effective mitigation significantly increases long-term social and economic costs for mitigation and adaptation.

4. Equity Dimensions: Effective, well-funded adaptation safety nets are required for those most vulnerable to climate change effects. A common, but differentiated mitigation strategy is needed to protect the poor and most vulnerable.

5. Inaction is Inexcusable: A wide range of benefits will flow from a concerted effort to alter our energy economy now, including sustainable energy job growth, reductions in the health and economic costs of climate change, and the restoration of ecosystems and revitalization of ecosystem services.

6. Meeting the Challenge: we have to seize critical opportunities and engage society in the transition to norms and practice that foster sustainability as a “way of life.”

I was truly impressed by the consideration the Congress took for input from top researchers in the science of climate change (e.g. physics) but also the social sciences and even philosophy. For me there were three messages that harkened throughout discussions by all keynote speakers, who ranged from Dr. Rajendra Pachuri, Chairman of the IPCC to Lord Nicolas Stern, the lead author of the 2006 groundbreaking Stern Review of the Economics of Climate Change. Firstly, the decisions at the COP 15 made by politicians must be guided completely by the science findings (this was hardly agreed to by PM Rasmussen). Secondly, there was a huge push for the fact that the current economic downturn is actually a golden opportunity to redefine our world in a low carbon manner. Finally, just about every speaker and session touched on the question of equity in addressing climate change, from discussions of new brands of climate change insurance to roles of forests and agriculture.

Though there were some negative reports, like the fact that we are indeed on the path to realizing the worst-case IPCC scenario trajectories, there was a true sense of hope and optimism about what December negotiations may bring.

After all, how couldn’t we feel hopeful leaving the Bella Center, windmill generated energy right out front of the building? But then again, when it started to sleet, an awful lot of Congress contributors turned to taxis rather than reduced carbon public transport…

And with my hat as Climatico’s France Analyst on:  French researchers were well represented at the Congress, talking on how to synchronize world carbon markets to philosopher views of climate change and why the public may avoid realizing the real magnitude of danger.

Also on the docket for France: How may joining NATO affect climate issues, if at all? And how did the recent “International Standards to Promote Energy Efficiency and Reduce Carbon Emissions” workshop held in the OECD Conference Centre, Paris go? More soon…

On March 5 2009 Climatico released its first assessment report of national climate policy across twelve of the G20 countries.

This, the first of four reports leading to COP-15 in December 2009, tracks progress in government climate policy between 1st November 2008 and 20th February 2009.  Through this tracking the report draws conclusions about general trends between national policies to understand how climate policy is developing in the major greenhouse gas-emitting countries.   This ‘overview’ is presented in an editorial in Chapter 1 of the report. The report also includes a special chapter on energy policy in China.

Some of the main findings of the report are:

• A significant funding gap is appearing for adaptation, as developing country lack domestic resources and capacity and also appear unable to rely on international transfer mechanisms to meet their financing needs.  It is at present unclear how adaptation will be effectively financed.
• The financial crisis is allowing a mainstreaming of climate change into recovery packages, accelerating otherwise difficult shifts to low carbon growth in developed countries. However, the same crisis is causing a major slow down in projects that do not contribute to financial recovery (see Box 2 on page 10).
• CDM project growth in Mexico and Indonesia is already slowing significantly compared to business projections for early 2009, with most Indonesian projects on hold.

The countries included in the report are: UK, EU, France, Germany, Canada, USA, Mexico, India, China, Indonesia, Japan, Australia.

For enquires please contact:

Simon Billett, Research Director  (simon.billett@climaticoanalysis.org)

Dan Lewer, Communications Director (dan.lewer@climaticoanalysis.org)

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.