2011

With the Durban climate talks starting in one week (November 28 to December 11), climate change action continues its back and forth. The good news for reducing emissions includes the bold new Australian carbon tax, the EU plan to include international aviation under its Emissions Trading Scheme (ETS), and the delay in the Keystone XL Pipeline project.

Hopes for an institutional mechanism to transfer billions of dollars in climate finance to developing countries were bolstered by the submission of the report by the Transitional Committee on the design of the Green Climate Fund to the COP, for possible approval in Durban. Beyond the architecture, analysis by the Climate Policy Initiative of current climate flows and the failure of the G-20 to provide anything more than moral support, without adopting proposed new financing measures, dampen expectations for immediate progress in stepping up financial flows.

While the International Energy Agency reports exciting progress in clean energy and energy efficiency, its new World Energy Outlook reminds us that the window is closing on the chance to avoid locking in high-carbon infrastructure. Yet a new global public opinion poll reveals that a majority of people around the world, and particularly developing countries, want their governments to put action on climate change at the top of the political agenda. So far, governments have yet to respond, as I explain in a new blog post about what to expect-—and not expect-—from next week’s round of global climate negotiations in Durban.

Michelle de Nevers

UNFCCC Executive Secretary Ms. Christiana Figueres, Minister Trevor Manuel,
and Minister Maite Nkoana-Mashabane welcoming delegates at the pre-COP17/CMP7 Informal Ministerial Consultations held at Spier, Stellenbosch.
Image: Jacoline Prinsloo

Moving toward a global carbon market

Amid fanfare and domestic controversy, Australia’s new carbon tax was approved by the Senate on 8 November. Australia is one of the biggest emitters of carbon per head globally due to its heavy use of coal-fired power generators, which account for about 75 percent of electricity output. The new tax is intended to cut carbon pollution by 160 million tons a year by 2020. The tax will charge a fixed price of 23 Australian dollars (US$23.50) per carbon ton from the country's top 500 polluters starting from July 2012, increasing 2.5 percent annually until 2015 before changing to a floating-rate price with the government controlling the amount of tradable permits released annually and implementing a price floor and ceiling. At that point companies will be able to trade carbon credits and it is expected that the Australian carbon market could be linked with similar systems in New Zealand and Europe, a step toward a global carbon trading system.

In Europe, the EU has extended its carbon tax (Emissions Trading System) to include non-EU operators, starting in 2012, despite strong negative reaction by the United States, China, and two dozen other nations that signed onto the “New Delhi Joint Declaration,” a working paper that rejects the EU’s plan to tax carbon emissions from international aviation. The European Union, however, appears determined to go ahead with including international aviation under the ETS in spite of mounting worldwide opposition.

Considering the failure of the United States to introduce a cap-and-trade system that could lead to integration in global carbon markets, Resources for the Future and the Peterson Institute for International Economics co-hosted a workshop on the prospects for re-visiting the idea of a carbon tax. The workshop’s opening panel discussed how a carbon tax fits into the current political landscape of fiscal reform and economic growth. Sessions throughout the day then drew on recent research from RFF, PIIE, and other institutions, evaluating policy options and designs for a carbon tax.

Climate Finance – are we finding the money?

The Transitional Committee for the Green Climate Fund sent its final report on an institutional architecture for climate finance to the Durban COP 17. The GCF, proposed in Copenhagen and agreed in Cancun, is meant to help channel a portion of $100 billion of climate finance promised in the Cancun Agreements by 2020 to developing countries. A new report on climate finance by the Climate Policy Initiative finds that at least $97 billion is in fact already being provided annually to finance low-carbon, climate-resilient development activities. However, the report notes that it is unclear whether these funds are “new and additional,” which makes it difficult to assess whether the international community is close to meeting its commitment to mobilize $100 billion per year by 2020. Additionally, the $97 billion figure relates to commitments, not disbursements, and the total amount of private finance is almost three times greater than total public finance, contrary to the wishes of developing countries

With regard to new sources of finance for climate, although Jose Manuel Barroso, the European Commission President, announced on 31 August that the Commission now supports an EU-wide financial transactions tax (FTT), the idea did not get traction in the G-20 summit. At its most recent meeting in Cannes, the G-20 considered proposals by Bill Gates and the IFIs to mobilize additional finance from the FTT and bunker (aviation and shipping) fuels, some of which could be allocated for climate finance. However none of the proposals were moved forward by the G-20, which also refrained from taking further action to eliminate the $400 billion annual fossil fuel subsidies.

Action on Energy – slow progress

Two new IEA reports show, on the one hand, encouraging progress in scaling up renewable energy and energy efficiency, but a narrowing window to move from fossil fuels to clean energy in time to avoid locking in emissions that would exceed the 450 ppm goal. The IEA report titled “G-20 Clean Energy, and Energy Efficiency Deployment and Policy Progress,” prepared in collaboration with the G-20 Clean Energy and Energy Efficiency Working Group, received the endorsement of world leaders who met from 3 to 4 November 2011 at the G20 meeting in Cannes, France. The report provides an overview of G-20 policies on energy efficiency, renewable power, nuclear power, renewable heating and cooling, carbon capture and storage (CCS), and transport. It concludes that deployment of clean energy technologies is increasing rapidly, energy efficiency policy implementation is improving, and governments are starting to set goals for advanced vehicles. Despite this progress, the world remains largely dependent on fossil fuels. Implications are spelled out in the 2011 World Energy Outlook, which concludes that “without a bold change of policy direction, the world will lock itself into an insecure, inefficient and high-carbon energy system” by 2017.

But taking the long view….

A new World Public Opinion.org poll of 19 nations from around the world finds that majorities in 15 think their government should put a higher priority on addressing climate change than it does now. This includes the largest greenhouse gas emitters: China (62 percent want more action), the United States (52 percent), and Russia (56 percent). It looks like leadership will increasingly come from developing countries.

Sunita Narain, of the Center for Science and Environment in India, believes there is no other way but that the developing world regroups and takes leadership:

“Our world is the worst hit. We do not need to be preached about the pain of climate change. We know it. This leadership will require making tough demands. It will mean demanding drastic emission reduction targets for the rich world. But it is equally important that our world does not hide behind the intransigence of the US. Our world must explain that it is already doing much to reduce emission intensity of its growth -- growth of renewables in China, reduction of deforestation in Brazil and energy efficiency in India. It can and will do more. However, the high costs of transition to low-carbon growth must be paid for. This leadership must be firm on principles of climate justice and effective action.”

And as Saleemul Huq blogs in the Guardian, even the poorest and most vulnerable countries, meeting at the Climate Vulnerable Forum in Bangladesh this past week, pledged to reduce their small but symbolic share of global emissions.