New Zealand (Image by: niko)

Article by Guest Contributor: David Hall

On July 1^st this year, New Zealand’s Emissions Trading Scheme (ETS) began to turn the screw on its greenhouse gas emissions. With forestry liable since 2008, the energy and industrial sectors finally entered the carbon era.

Fuel and power companies immediately displaced the cost of greenhouse gas emissions onto consumers, raising petrol prices by roughly 3 cents a litre and the price of electricity by over 3%. Government estimates put the average annual cost at $165 per household, rising to $330 by 2012. Not much, perhaps, but enough to cause some grumbling, especially given that electricity prices had already risen 72% in the last eight years.

Unfortunately for the New Zealand public, this is only the beginning. Analysts have warned that in the first five years of the ETS, 52% of its costs will be carried by households, despite their accounting for only 19% of total emissions. Including road users and small to medium businesses, this group is expected to shoulder 90% of emissions costs while producing only 30% of emissions.

Where do these additional costs come from?

To begin with, agriculture is exempt from any costs until 2015, even though the sector accounts for 49% of the country’s greenhouse gas emissions. Until then, the Government will pick up the tab—on behalf of present and future taxpayers.

Next, the ETS employs an intensity-based allocation of emissions units (known as NZUs) which means that NZUs are allocated to companies as long as their greenhouse gas emissions do not exceed the industry average, measured in tonnes of greenhouse gases per million dollars of sales. These NZUs are eventually surrendered to Government, along with any additional credits needed to cover an excess of emissions.

As such, there is no cap on individual emissions, nor any fixed volume that total emissions cannot exceed. If the nation’s total emissions exceed its Kyoto target by 2012—presently they are 24% above 1990 levels and rising—then the Government will have to buy credits on the international carbon market. How much this will cost taxpayers will depend on market price, but Treasury has put its net Kyoto liability at $1.1 billion, with warnings that it could be as high as $5.7 billion.

Finally, the ETS provides a transition phase for export industries exposed to international competitors. Thus, until the end of 2012, each NZU is capped at $25 a tonne. Not only does this mean that any shortfall on the international carbon credit market must be met by the Government, it also dampens the price signal of emissions, removing another incentive to adopt cleaner technologies. Furthermore, during the transition phase, polluters are only required to surrender one NZU for every two tonnes of carbon. Only in 2013 will this revert to a ratio of one-for-one, yet even then industries will be gifted NZUs equivalent to 90% of 2005 emission levels, phased out at only -1.3% per annum.

Little wonder that public attitude toward the ETS is decidedly ambivalent, a combination of confusion, resignation and discontent. Politically, this is a major problem, because it fosters public hostility toward an area of policy that desperately needs its support. Widespread resentment toward an unjust distribution of emissions costs could easily mutate into (or be interpreted as) a popular unwillingness to do anything at all.

Furthermore, the over-protection of industry and agriculture from emissions costs removes any strong incentive to evolve. And that, ostensibly, is what the ETS is for. When government protections are removed, these sectors may find themselves in a world that has moved on without them—their international competitors cleaner, and their key markets less tolerant of carbon-intensive products.

This is especially frustrating in agriculture where technological solutions are both available and affordable. With half of all greenhouse gas emissions produced by agriculture, mostly from dairying, any reduction will have a significant impact on New Zealand’s overall emissions. As it stands, however, the will to adapt must come from farmers themselves, many of whom seem instinctively hostile to change. Federated Farmers’ stubborn resistance to past policy proposals is evidence of that.

In the meantime, the ETS is only expected to cut emissions by 2% at best. The policy is a demanding test of the wisdom that anything is better than nothing.

Author: Nyla Sarwar

"Big Heads" seek financing for climate change (Image by: Oxfam)

An ambitious and positive draft text presented at the UN climate summit has failed to impress developing countries, who argue that more finance is needed to support their low carbon development and adaptation in some of the most vulnerable nations.

The so-called “long-term action plan text” believed to be much more positive that the “Danish text” leaked earlier in the week, sets GHG reduction targets for developed countries of around 25-45% by 2020 against a 1990 baseline. These targets are expected to be extremely ambitious, and will require the sequestration of already emitted atmospheric carbon, potentially limiting worldwide temperature increases to 1.5C – 2C. The text is now up for negotiation, and demands much stronger commitments from the developed counties, compared to figures already laid out on the table.

UK PM Gordon Brown has been actively engaged in the negotiations to encourage the EU to confirm its more ambitious commitment to reduce GHG emissions by 30% by 2020 against a 1990 baseline. It is expected that this will require the UK to contribute 40% emissions reductions by 2020, instead of the 34% share previously committed.

Gordon Brown has also been pivotal in negotiations among EU leaders to provide immediate finance for developing countries to adapt to climate change. Announcing that the EU would commit 7.2bn euros (£6.5bn, $10bn) for adaptation in developing countries over the next three years, Swedish Prime Minister Fredrik Reinfeldt reaffirmed Europe’s commitment to moving the Copenhagen negotiations closer to a global deal.

The UK’s promise, at £500m ($800m; 553m euros) a year, was the highest. Reports from Brussels suggest the German contribution will be 480m euros per year from 2010 to 2012. Earlier, Mr Brown and France’s President Nicolas Sarkozy told a joint news conference their two nations would contribute at least £1.5bn (1.7bn euros; $2.4bn) spread over the three years.

The money pledged is for a “fast start” fund to help the world’s poorest nations tackle rising sea levels, deforestation, water shortages and other consequences of climate change between 2010 and 2012, and reduce their own emissions.

The promised EU contribution will make up a sizeable portion of a proposed global figure of $10bn (7bn euros) annually.

Financial discussions in Brussels saw EU leaders during the International Monetary Fund (IMF) to consider a global tax on financial transactions to reduce the risks of a further financial crisis and raise funding for tackling climate change.

“The European Council encourages the IMF to consider the full range of options including insurance fees, resolution funds, contingent capital arrangements and a global financial transaction levy in its review,” the summit’s final statement said.

Whilst the text confirms the consensus between nations that halting forest protection is crucial, the details of measures to reduce deforestation are still al long way off. Developing countries are still demanding more funding from developed countries, and the details of a long term and fundamental financial package still remains hugely uncertain. The new text also requires developing countries to cut their carbon emissions by 15-30% by 2020 compared to BAU, and developing countries retired from the plenary requesting further time to digest the potential consequences of such commitments.

Additionally, reports suggest that the EU and US have finally agreed to a twin track deal which ensures that the Kyoto protocol – the only legally binding treaty that forces rich countries to cut emissions – continues at least until a new legal treaty is signed.

“This is very, very complicated. It’s tough because the world is trying to peak emissions. There is a long way to go. We are anxious and conscious of the scale of the challenge that remains,” said the UK climate and energy secretary, Ed Miliband.

The text will be negotiated in more detail next week, with details of a finance package and forest protection measures expected to dominate discussions. Developing countries will be calling for tougher commitments, and as Nasa scientist Jim Hansen recently commented – the climate agenda is not amenable to half measures. “It would be like saying, I’ll agree to cut 40% of slavery.”

On Thursday, 26 November the presidents of France and Brazil came out with a joint statement that rich(er) countries must immediately boost aid for developing nations in efforts towards climate change mitigation and adaptation. They lauded this as an essential key to obtaining a viable agreement in Copenhagen next month.

Brazilian President, Luiz Inacio Lula da Silva, invited his counterparts in countries straddling the Amazon Basin to meet in Manaus in order to come to a consensus about their views on climate change-related issues in the area (France was also invited since its overseas department of French Guyana is located in the Amazon region). Representatives from Brazil, France, Peru, Colombia, Ecuador, Venezuela, Bolivia and Guyana all participated in the summit. President Nicolas Sarkozy came from France for the meeting with the President of Brazil, but the only other South American president to take part in the Manaus Summit was Bharrat Jagdeo of Guyana.

Brazil, which has pledged to cut its greenhouse gas emissions by between 36.1 and 38.9 percent from projected 2020 levels, has been seeking a growing role in climate talks and wanted to forge a common position of Amazon countries to take to Copenhagen. Brazilian presidential spokesman, Marcelo Baumbach, stated that for Brazil “it is essential that the Amazon region takes part in the December conference with a cooperative and convergent proposal.”

To this point, during the Summit, representatives agreed to the position that “developing countries should also contribute to addressing the global climate change through mitigation actions according to their national conditions, supported by international funds.” This kind of statement moves beyond Kyoto because it tentatively allows for proposals that require binding targets on developing countries, so long as the developed world helps them financially and through technology transfer.

Even though French President Sarkozy was representing French Guyana during the Manaus summit, as the leader of a developed nation, he spoke from that role as well. During a press conference after the meeting, he hailed China’s new proposals on combating global warming as “extremely encouraging.” He welcomed the USA’s target (announced Tuesday, 24 November) to reduce its emissions 17 percent by 2020 from 2005 levels.

Sarkozy used the examples of the recent proposals put forth by the United States and China towards binding targets as hallmarks of how nations that had not played a strong role in Kyoto were rising to the challenge in this next round of negotiations and really understanding the threats posed by climate change. “The latest statements by Barack Obama and China’s leaders are extremely encouraging in making Copenhagen a success,” Sarkozy said.

Climate negotiators have made little visible progress in sorting out the mechanisms by which rich countries should help poorer ones fight global warming. The European Union states that the cost to help developing nations fight global warming is about $100 billion annually. But developing countries say rich countries should pay between 0.5 percent and 1 percent of their gross domestic product.

Brazil has opened an investment fund to help conservation in the Amazon rainforest but insisted donor countries would have no say in the details of the use of funds. “The poor need to be supported without any country giving up its sovereignty,” Lula said.

20% of GHG emissions come from forest change and destruction annually. Thus, in this round of negotiations it is key to include specific provisions and mechanisms that address forest preservation (which was left out of Kyoto). Inroads are being made via the REDD (Reducing emissions from deforestation and degradation in developing countries) proposal.

“We need numbers, not only to reduce the temperature. Copenhagen also needs to provide funds from developed countries for developing countries,” said Sarkozy. “That needs to happen now,” he emphasized.

Climatico (Kelly McManus and Jennifer Helgeson) will be reporting on the progress of REDD during the course of the Copenhagen climate negotiations. They will offer an introduction to understanding REDD. Jennifer will also continue reports on French climate policy throughout the negotiations.

Al Gore, former U.S. Vice President and climate change campaigner, was in Melbourne on Monday for the launch of the new think tank Safe Climate Australia and to help train 300 people from 19 nations to address and encourage their leaders on the issue of climate change. Gore’s visit also coincides with Australia’s first ever Youth Climate Summit which hopes to mobilize a new generation of climate change activists. Speaking before a group of 1,000 Australian business leaders, Gore praised the Rudd government for pushing forward with emissions trading legislation ahead of the climate change conference held in Copenhagen this December.

Safe Climate Australia is a new environmental think tank composed of scientists, business and civic leaders and is modeled on a similar project in the United States called Repower America. The group demands that emergency action must be taken in order to address global warming and plans to help Australia move away from emissions-heavy coal towards a zero-carbon economy. Gore stated that the mounting environmental challenges in the world require immediate action.

According to the SCA organizer, Brendan Condon, the SCA hopes to develop a blueprint for the transition of all major sectors of the Australian economy to net zero carbon with a draft expected in 12 months.”This is a massive body of work that will include collating all relevant scientific research, developing systems architecture, scenario planning, emission reduction and sequestration strategies.”

While Gore praised the work of Rudd and the progress that the United States and Australia have made toward making climate change a higher priority, Gore mentioned that he would have written stronger emissions targets than currently proposed in Australia’s Carbon Pollution Reduction Scheme (CPRS) bill. “It’s not what I would have written, I would have written it as a stronger bill, but I’m realistic about what can be accomplished in the political system as it is,” Gore said.

Rudd’s proposed legislation has also been attacked by green groups who claim that the emissions targets are too weak. Currently, the emissions trading legislation commits to an emissions reduction target of 60% by 2050 and interim targets of between 5-25% by 2020. Rudd hopes to push the trading bill through parliament in August, four months ahead of the Copenhagen conference.

While Prime Minister Rudd’s legislation has come under fire, Gore still remains encouraged by the progress made by the Rudd government. “I am sincerely convinced that the right way forward is to get to the maximum that the political system will allow us to accomplish and begin the change, and then, as we gain experience with it, toughen it, strengthen it, make it better based on experience as business and industry learn how to adjust.”

Scientists warn that Australia can be vulnerable to damage caused by warming temperatures such as more severe storms and droughts as well as rising sea levels. Gore sited the record temperatures and brutal wildfires this past February in parts of Victoria that took the lives of 173 people as evidence that the planet has a “fever” brought on by climate change. “The odds have been shifted so heavily that fires that used to be manageable now threaten to spin out of control and wreak damages that are far beyond what was experienced in the past. This crisis is gaining momentum and the reason why is not that complicated.”

At the climate change talks in Copenhagen later this year, governments will meet in order to negotiate an international environmental agreement to succeed the Kyoto Protocol when it expires in 2012. While an agreement between leaders will be difficult, Gore remains optimistic. Gore stated before reporters, “One of the barriers in the Kyoto process was that the United States and Australia did not provide the kind of leadership necessary…Now with new leadership in both the United States and Australia our two countries are providing leadership. When that leadership is most needed is in the run up to Copenhagen, it can make a huge difference.” One of Rudd’s first acts as Australian Prime Minister was to sign Australia on to the Kyoto Protocol and both Australia and the United States have been active in the negotiation process leading up to Copenhagen in December.

December 2009 is the key date when global world leaders aim to agree a ‘Global’ climate change plan at the forthcoming UN Summit at Copenhagen.  UK Prime Minister Gordon Brown and his Energy and Climate Change Secretary, Ed Miliband, outline what they would like to see emerge from the December 2009 Copenhagen summit in replacement to the Kyoto Protocol, which is due to expire in 2012. 

In his recent speech, Gordon Brown revealed a ‘Road to Copenhagen’ document which was presented to Parliament, and sets out why a Copenhagen deal is so important, and for the first time, what deal the UK Government is pushing for; some aspects are outlined below:

Emissions Reduction: Commit to firm reductions in amount of greenhouse gases they emit at Copenhagen.  The European Union has already pledged that it will reduce emissions by 20% below 1990 levels by 2020, and by 30% if other countries commit to a similar level of action in a global agreement.

Adaptation: The UK wants a deal which gives developing countries the support they need to develop their own national plans to adapt to climate change. Other Adaptation actions could include better water conservation, new farming methods and plans to build new homes and businesses away from flood plains.

Tackling deforestation: The UK wants to see a deal which at least halves the rate at which we are cutting down tropical forests by 2020, with a complete end to global forest loss by 2030 at the latest.

New technologies: Carbon Capture and Storage to prevent emissions from fossil-fuelled power stations entering the atmosphere; Electric vehicles that produce lower emissions; Solar and other renewable power that produces cleaner energy; Energy efficient products for use in homes and business.

The UK plans for action are based on the UK Climate Projections a few weeks ago, that showed that Britain will also suffer if we do nothing to reduce global carbon emissions.  By the 2080’s temperatures could, under a high emissions scenario, be up to 12 degrees C warmer on the hottest summer days and sea levels could rise by 36 cm.  

Together with our EU partners we have already made a commitment to reduce greenhouse gas emissions by 20% below 1990 levels by 2020, with an offer to reduce emissions by 30% if an ambitious global deal is agreed. 

The talks will discuss the sectors in which the greatest reductions can be achieved.  This will also vary on a country by country basis, as the largest carbon emitting sectors will vary, and the impact on national strategies in preventing future growth which will almost certainly cause debate for some.

As part of a broader marketing campaign within the UK, Ed Milliband is the forefront of ‘Act on Copenhagen’ the official UK government website launched on 26th June, and designed for activities in the lead up to global climate change negotiations in Copenhagen.  In addition, thousands of pamphlets will be issued to schools, citizen’s advice centres and libraries explaining why a global deal is vital and giving 15 top tips on what each of us can do to cut our carbon footprint as part of the global effort.

Not everyone will hold the same view as the UK and therefore anticipate that a convincing argument will need to be pitched at some world leaders, and China is one of them.  In the face of a strong and ever growing, and prosperous economy, what actions will be taken to limit the growth of factories, air travel and industrialization?

Developing nations are emitting up to 50.3 per cent of world emissions, a study provided by the Netherlands Environmental Assessment Agency, therefore, Gordon Brown will play a leading role in not only to pledging to reduce emissions from all members, but in leading the securing of a global agreement on climate change – a role which many leaders may wish to take.  With Ed Milibands recent announcement for a UK coal consultation Carbon Capture and Storage (CCS) demonstration, this may be the driving force for the UK to show that they are leading the Copenhagen debate, and not following it. 

Gordon Brown plans to meet with the President Obama administration at the September meeting of the G20 in Pittsburgh before presenting his plans, with the hope of a successful outcome at Copenhagen in December.

EPA logo

In a landmark move, the Environmental Protection Agency (EPA) is about to declare an “endangerment finding” on GHGs, meaning they officially acknowledge them to be a threat to human health, and are therefore required to regulate them under the Clean Air Act (CAA).

This is the latest development in a process that started in 1999 when 12 states, 3 cities and several environmental organisations petitioned the EPA to regulate GHGs emissions from motor vehicles under the CAA. The case – known as Massachusetts v. EPA – eventually made it to the Supreme Court, and in April 2007 the Court ruled that as greenhouse gases meet the Act’s definition of air pollutants, the EPA must take action to regulate tailpipe emissions.

Following this decision the EPA was required to find whether or not GHGs emissions from vehicles endanger public health (unless it found that the science is too uncertain to make a judgement).

Unsurprisingly EPA scientists found that GHGs do in fact endanger human health as they contribute to global warming, but under the Bush administration the EPA stalled, taking over a year to publish just an Advanced Notice of Proposed Rulemaking (ANPR is an informal action used when an agency seeks more information and public input before deciding what to propose).

Now the EPA, under the new director Lisa P. Jackson, has finally sent the Obama administration a proposed “endangerment finding”, which – if cleared by the White House Office of Management and Budget – will pave the way for EPA regulation of GHGs.

While many agree that the 1970 Clean Air Act is not ideal for dealing with rising GHGs emissions (and anyway, this first stage deals with emissions from vehicles only), this will still be a step forward as it will likely put pressure on Congress to pass legislation that would be better suited for the task. Such a move will be welcomed both by environmentalists and the industry.

So what now? Now we wait for Ms. Jackson to sign the endangerment finding, probably in mid April, and see if this will indeed prompt Congress to act more swiftly on regulating US emissions of greenhouse gases.

Photo credit: Flickr/sujathafan

On Monday, the highly publicized Tata Motors Nano  automobile was launched in Mumbai. Since 2003 the Tata Motors Nano has been the source of much attention from diverse stakeholders:  garnering labels such as the “The People’s Car,” center of a heated protest over land and labor in India, hailed as engineering and development progress, and criticized by environmentalists. I have given voice to all of these arguments in the course of tracking the Nano phenomenon. Given the much awaited launch, I am still, like many others, unable to make a definitive opinion on the likely impact of the Tata Motors Nano in India and the world.

Various blogs and articles have laid out the key arguments surrounding the Tata Motors Nano:

- Those worried with the Tata Motors Nano launch are concerned with the car’s negative social and environmental impacts:

• More cars on the roads = more emissions.
• The Centre for Science and Environment  strongly voices its concern over promoting private car ownership will reduce the demand for efficient mass transits.
• Land issues: In 2008, in the state of West Bengal, Tata Motors faced significant hurdles after land acquisition protests emerged at its Singur plant. However, the Tata Motors Nano plant was relocated to Gujarat to continue production goals.

- Supporters of the Nano argue that the car projects positive ‘green’ and development progress:

•  Despite concerns of increased car ownership, emissions are much lower  than some
  

  Photo credit: Flickr/Carol Mitchell

  European cars (120grams Co2 per kilometer).

•  The promotion of Tata Motors Nano on the roads provides a safer alternative to India’s 2-wheelers and rickshaws.
•  Somealso argue that the Tata Motors Nano’s worldwide recognition has led India to rise as a leader in innovation and technologycircles. Subsequently, the Tata Motors Nano is likely to support the technology research and development arena that has been the focus on international climate change negotiations.

For better or for worse the Tata Motors Nano is here to stay though amidst uncertainties. Current production forecasts suggest that the Nano will exceed demand in the coming months, despite economic concerns, fluctuating oil prices, and climate change debates. Those interested in purchasing the Tata Motors Nano will have to fill out an application form  and a price tagof Rs. 100,000 ($2000 USD). Still affordable in many ways, the uncertainties around the Nano’s future also include whether Tata Motors can maintain its affordability while production costs increase. The debates are likely to continue, as the Nano becomes more visible on India’s roads. Will it gain further supporters or critics?

EPA building with Washington Monument in the background

On Tuesday, the Environmental Protection Agency proposed the first ever comprehensive system for reporting greenhouse gas emissions in the United States. In a press release issued yesterday, EPA Administrator Lisa P. Jackson states that with the new reporting measures proposed “we will have comprehensive and accurate data about the production of greenhouse gases. This is a critical step toward helping us better protect our health and environment – all without placing an onerous burden on our nation’s small businesses.”

Much of the reporting requirements used in the development of the proposal are already underway in several states, regions and through various reporting programs. The EPA’s proposal applies reporting requirements to fossil fuel and industrial chemical suppliers, certain manufacturers, and large direct greenhouse gas emitters whose emissions are equal to or greater than 25,000 metric tons per year. Most small businesses fall below this threshold and would not be required to report their emissions under the proposed rule.

This means that, if the proposed rule is enacted, 13,000 facilities across the United States will be required to report their greenhouse gas emissions. Industries affected include manufacturers of oil, cement, chemicals, iron and steel, automobiles, and many others. The proposed rule covers about 85-90 percent of greenhouse gas emissions originating in the United States.

The initial cost to the private sector to comply with reporting requirements is estimated at $160 million in its first year, with subsequent years dropping to $127 million annually. If on schedule, the proposed reporting is set to begin in 2011 after the monitoring of 2010 emissions. Vehicle and engine manufacturers will begin reporting for model year 2011.

The proposed rule comes under the heading of the Clean Air Act and is in accordance with the Consolidated Appropriations Act, 2008 signed into law in December 2007. The proposal was originally expected to come out last September. While this measure is a first of its kind for the United States, greenhouse gas emissions reporting is already underway in other countries. In Australia, for example, the National Greenhouse and Energy Reporting Act 2007 was passed in September 2007 requiring mandatory reporting of corporate greenhouse gas emissions as well as energy production and consumption.

While delayed in its release, the timing of this announcement by the EPA might be significant in that it underscores the environmental consciousness of the new administration. Despite its expected debut during Bush’s term in office, the Obama administration has managed to finally kick emissions regulation into gear and put the United States on track for a greener future.