Today, port authorities from around the world endorsed the World Ports Climate Declaration, in which they actively commit themselves to reducing greenhouse gas emissions and improving air quality. The endorsement came at the conclusion of a three-day conference hosted by the City of Rotterdam and sponsored by, among others, the C40 Climate Leadership Group, an alliance of the world’s largest cities committed to tackling climate change. According to the conference chairman, 55 ports endorsed a framework that will lead to “concrete international measures.”
Subjects that will be addressed by the ports include the development of a standard method for quantifying CO2 emissions from ships. The ports also plan to develop a global indexing system that will enable them to reward climate-friendly ocean going ships, and punish the polluters. The next follow-up meeting will take place in Los Angeles in November.
On July 8, the European Parliament voted to expand the European Union Emissions Trading Scheme (EU ETS) to cover aviation emissions as of January 2012. Based on a 2006 European Commission proposal, the approved legislation will require all commercial airlines, regardless of country of origin, to purchase and surrender carbon emissions allowances for all flights within the EU or departing from or arriving at EU airports. Total emissions for the civil aviation industry in 2012 will be capped at 97% of historical emissions, defined as average emissions from 2004-2006. The cap will decrease in 2013 to 95% of historical emissions, with the option of further tightening after 2013. Initially, the EU will provide 85% of permits for free and auction the other 15%; the percentage of auctioned permits may rise in subsequent years.
Today’s G8 Statement on Climate Change and the Environment commits member countries to a “goal of achieving at least 50% reduction of global emissions by 2050,” and embraces the need to “ensure an effective and ambitious global post-2012 climate regime,” but does not provide details on the types of “meaningful mitigation actions” that countries might adopt.
In recognition of the need for near-term political action on climate change, G8 members agree in the Statement to implement “economy-wide mid-term goals” on greenhouse gas emissions reductions. While recognizing the U.S. goal of stopping the growth of greenhouse gas emissions by 2025, the Statement is ambiguous on specific reduction commitments, and was criticized by some environmental groups as a “failure of responsibility.”
The Statement received additional criticism from the “G5″ nations for including strong language requiring emission reduction commitments from “all major economies” under a future global climate treaty. The requirement for a “global response…consistent with the principle of common but differentiated responsibilities” is considered to be a U.S.-driven push to increase pressure on countries like China and India in the post-Bali climate negotiations. Additional discussions on these topics are likely to take place during tomorrow’s Major Economies Meeting.
Following Australia’s recent ratification of the Kyoto Protocol, the Federal Government intends to unveil its emissions trading scheme (ETS) by the end of this year, for commencement in 2010. The key publications released to guide the development of the scheme, include the 2006 National Emissions Trading Taskforce’s report, the 2007 Prime Minister’s Task Group proposals, and the newly released Garnaut Review.
Professor Garnaut, an Australian National University economist asked by the Rudd Government last year to research the likely economic effects of an ETS, released his draft report on July 4, with the final report scheduled for release on September 30. Garnaut’s report outlines the following key issues:
In an op-ed published in today’s Moscow Times, Akin Gump Senior International Advisor Toby Gati analyzes emerging policy signals indicating an increased interest in renewable energy and energy efficiency projects in Russia.
Mrs. Gati is the former special assistant to President Bill Clinton for Russia and the Eurasian States and Assistant Secretary of State for Intelligence and Research.
On June 26, 2008, the European Parliament and EU Member State negotiators agreed to expand the EU’s Emissions Trading System (ETS) to include emissions from civil aviation as of January 1, 2012. The Proposed Directive would include all flights by any airline to and from any EU airport, with limited exceptions. Total EU-wide aviation emissions for 2012 would be capped at 97% of average emissions from 2004-2006, with the cap reduced in successive years. 15% of total aviation emissions permits would be auctioned, and 85% would be allocated for free, although this ratio could also be adjusted in the future.
Last week’s agreement is the product of a series of compromises between the European Commission, the EU Parliament, and EU environmental ministers, resulting from intra-EU negotiations over the past several years. In order to become binding law under the EU’s “Co-Decision” procedures, the Proposed Directive must be supported by the EU Parliament (scheduled to vote on July 9), as well as Member State governments. Generally, these steps are a formality. Read the rest of this entry »
In its annual report to the UN Framework Convention on Climate Change Secretariat, the European Environment Agency (EEA) highlights Member States’ progress greenhouse gas (GHG) emissions reductions. The report reveals that emissions within the EU-27 were reduced by 0.3% in 2006, the most current year for which data is available. EEA estimates that, overall, emissions have fallen 7.7% below 1990 levels.
The report found that the EU-15 Member States cut emissions by 0.8 % in 2006 — 81 % of the total EU reductions — but that some Eastern European countries reported emissions increases over the 2005-2006 time frame. In a press statement, EU’s Environment Commissioner Stavros Dimas noted that “a continuous effort will be required by all Member States to achieve [GHG targets].” The 12 newer EU countries “cannot rely on the successes of the past,” he said.
The report seems to point to the need for significant further work for the EU to achieve its proposed “20% by 2020″ target, since much of the reductions originated from incidental shifts in demand. The report revealed that the main contributor to the emissions decrease in the EU-27 was lower consumption of gas and oil in households and services, due to a warmer weather between 2005 and 2006. Other greenhouse gas reductions came from a decreased rate of nitric acid production, mainly in Germany, and from decreased CO2 emissions from manufacturing mainly due to depressions in France’s and Hungary’s chemical industries.
Sectors with substantial increases in GHG emissions in the EU-27 included CO2 from public electricity and heat production, CO2 from road transportation, and CO2 from iron and steel production. These findings suggest that there may be a future increase in regulation of vehicle and truck emissions and building efficiency standards, similar to Germany’s decision this week to “increase truck tolls and raise energy standards for buildings,” as reported by the AP.
The CEO group recognizes the threat posed by climate change and calls for immediate action to mitigate the risks posed to both the physical and business environments. These leaders request action from “all major economies . . . including the United States, China and India.” They pledge to work with governments under the Bali Action Plan to negotiate, over the next 18 months, a successor agreement to the Kyoto Protocol.
The group recognizes that “the rapid shift to a low-carbon economy that lies ahead has the potential to drive forward the next chapter of technological innovation.” Developing economies have the most to gain by engaging in the international process because - if designed properly - it “enables the emergence of an international market for carbon [that] can help catalyse the required flows of private capital and clean energy technology to developing nations in the most innovative, entrepreneurial and cost-effective way.”
Last week, the World Bank priced the first bond linked to prices of certified emissions reductions (CERs), known as the World CO2L Bond, with Japanese stock brokerage firm Daiwa Securities Group serving as lead manager. The Uridashi bonds will be offered to individual Japanese investors during the period June 9-24, with June 26 as the issue date, and will mature on September 30, 2013.The total amount of the bond issuance is US$25 million with a minimum denomination of US$100,000.After an initial 15-month period with a fixed coupon of 3%, the interest rate will be linked to the future performance of CER market prices, and specifically to the price of CERs from a hydroelectric power plant project in the Guizhou province in China.
The project has been registered with the United Nations’ Clean Development Mechanism (CDM) Executive Board in April 2008 and is being jointly implemented by China’s Guizhou Sanhe Hydro Power Development Co., Ltd. and Daiwa Securities SMBC Principal Investment Co., the investment arm of Daiwa Securities Group.The project is expected to reduce greenhouse gas emissions by over 23,000 tonnes CO2-equivalent per year.
Daiwa Securities Group expects that sales of the World CO2L Bond will help support demand for greenhouse gas emissions trading because investors will be indirectly participating in the market for greenhouse gas reductions.Trade in CERs more than doubled to $13 billion last year, according to a World Bank report published in May.
The Lieberman-Warner Climate Security Act has emerged as the leading legislative vehicle for the creation of a national cap-and-trade system for greenhouse gas (GHG) emissions. Recently described by the Wall Street Journal as “the most extensive government reorganization of the American economy since the 1930s,” the Climate Security Act would, among many other things, require U.S. importers of a wide range of manufactured goods to purchase and surrender emissions allowances representing the GHGs associated with manufacture of the imported goods.
This requirement, intended to ensure that U.S. emissions caps do not diminish the competitiveness of domestic manufacturing industries vis-à-vis their foreign rivals, would only be excused for goods produced in countries that have adopted GHG emissions requirements as stringent as those in effect in the United States. In this way, the Climate Security Act would use U.S. market access to compel foreign exporting nations to limit GHG emissions, and could significantly affect trade flows.
In anticipation of the floor debate scheduled to begin in the Senate next week, Senator Boxer issued a substitute bill (S. 3036) that significantly alters the regulation of imports. One of the principal trade-related changes in the substitute bill is that it would create an International Climate Change Commission (ICCC) that would determine which foreign countries have taken “comparable action” to the United States in curbing GHG emissions. A negative determination would trigger the requirement for importers to provide emissions allowances pursuant to an International Reserve Allowance Program. The ICCC’s duties would also extend to determining the scope of manufactured goods falling under the import provisions, as well as modifying the import emissions allowance requirements as warranted.
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