Tag Archives: alternative
The Real Politics Behind A Floating Price On Carbon
Discussion has been locked in fact-free debate for so long it’s easy to forget reducing emissions is the point of the exercise Follow Lenore Taylor BETA Lenore Taylor guardian.co.uk , Sunday 14 July 2013 A protester holds a placard during a rally in Sydney against Julia Gillard’s ‘carbon tax’. Photograph: Greg Wood/AFP/Getty Starting a “floating” carbon price one year early is not such a big deal, really. The fact that every political party is screaming about it just proves how twisted the politics of this issue has become. For Kevin Rudd , it’s a way to reboot a debate Labor has been comprehensively losing, and provide businesses and households with some very short term cost relief. The $3 billion or more the government now has to find in budget savings is the same amount business won’t have to pay for carbon permits next year. And that gets passed through to households in the form of savings of $210 a year for a sole parent on benefits, $300 to $400 a year for average couples with children and $180 a year for an aged pensioner couple, according to helpfully provided Treasury modelling. But it’s a price reduction that would have happened when the system moved into line with international prices one year later anyway. The real impact Labor is hoping for is political. For the Greens it’s an opportunity for product differentiation ahead of an election that’s looking very difficult for the minor party. But Christine Milne ‘s argument that Australia’s economic transformation will be somehow fundamentally interrupted by allowing the price to drop to international levels just one year earlier than planned doesn’t make sense. And for Tony Abbott it turns back against him his own successful blurring of the difference between a carbon tax (which Julia Gillard promised not to have) and a floating price emissions trading scheme (which has always been Labor’s policy in one way or another, and until Abbott became leader was the Coalition ‘s policy as well). A one year shift in the start of the floating price could never have resulted in front page headlines proclaiming “carbon tax to go” if it hadn’t been for Abbott’s own hard work decrying the fixed price “tax” for the last three years. For their very different political reasons both Abbott and Milne are labelling the decision a “fraud” and a “con”. But, putting the politics aside, we actually don’t yet have the most important pieces of information to make that judgement. What we really need to know is whether the government intends to keep the independent Climate Change Authority and listen to its advice about how hard we should be cutting our greenhouse gas emissions. The domestic discussion has been locked in this senseless, fact-free headbutt of a debate about “axing the tax” for so long, it’s been easy to forget that reducing emissions – probably by more than the minimum 5% by 2020 agreed by both major parties – is the point of the exercise. The “tax”, the trading scheme and even the Coalition’s “Direct Action” are all just different means to get there. If bringing forward a floating price means we can do more, while imposing lower costs on the domestic economy because the international price is lower than we thought it was going to be, surely that’s a good thing. And if Tony Abbott really thinks he has found a cheaper way to make deep, long term cuts to Australia’s emissions than can be achieved by participating in an international market, now would be the time to finally unveil the detail of his Direct Action policy to try to prove it. If Labor is keeping the climate authority and leaving open the possibility of tougher targets – by far the most important change negotiated by Milne in the deal with Julia Gillard compared with Labor’s first emissions trading scheme – are the Greens really going to stand in the way? Properly assessing Australia’s share of the global effort to slow climate change, and then figuring out how we most efficiently do it – that is a really big deal. Continue reading
Short-Term Solution For Troubled Emissions Trading Scheme
Joanne O’Dea, Science|Business MEPs say putting a price on pollution will encourage innovation in clean technologies and buy time for much-needed reform Turning around a vote from April, the European Parliament has voted to boost the price of carbon by taking 900 million permits off the table in an attempt to rescue the EU’s flailing emissions trading system (ETS). A surplus of approximately 2 billion allowances in the system, the result of oversupply and a fall in industrial activity, has caused the price of carbon to plummet from €29 per tonne in July 2008 to a record low of €2.63 after April’s “no” vote. With such low prices, the ETS risks failing to achieve its purpose of incentivising investment in green innovation. Matthias Groote, German MEP responsible for steering the reform through the Parliament, said “We shall not let the ETS be the victim of short-term concerns.” Europe should not be too quick to discard the scheme, he said, at a time where “Across all continents, Europe’s experience of a market-based system for reducing CO2 emissions is being considered, and seen as a credible option, as most recently in China.” Putting a plaster on an open wound Launched in 2005, the ETS places a ceiling on the overall carbon emissions of more than 11,000 power stations and industrial plants in 31 countries. National governments sell permits by auction to businesses, who can then sell on permits they do not use. The limited quantity should secure the permits’ value and deliver 2.8 billion tonnes of carbon reductions by 2020, but rock-bottom prices have jeopardised these aims. Groote concedes the move to withhold permits, described as “backloading”, is only a short-term measure to “[buy] time to stabilise carbon price and thereby the entire ETS.” A more “in-depth debate on restructuring measures that account for the present economic situation, including low carbon prices,” is still needed, he said. MEPs amended the Commission’s original proposal to specify that such intervention in the market can only be done once and under exceptional circumstances. An impact assessment must be completed to ascertain that the move will not create a “significant risk” of companies relocating outside the EU. Groote said the vote was “The best deal possible”, bringing certainty to the markets and saving the EU from missing its carbon reduction targets. His positivity was reflected in the markets, with prices jumping approximately thirteen percent to €4.86 a tonne after the vote. Spurring innovation Low carbon prices is not the only challenge faced by policy-makers, and questions have also been raised as to the scheme’s true effectiveness. In their paper, “ Environmental Policy and Directed Technological Change: Evidence from the European carbon market ”, Raphael Calel and Antoine Dechezlepretre, London School of Economics found the ETS has increased low-carbon innovation among regulated firms by as much as ten per cent, while not crowding out patenting for other technologies. While this is promising, it exists only on a small scale, as ETS-firms represent only ten per cent of low-carbon innovation across Europe. The ETS thus accounts for only a one per cent increase in European low-carbon patenting compared to a counterfactual scenario, said the paper. While ETS companies are responding to the scheme and adopting low-carbon technologies, the effect “Looks to nearly vanish when considered in relation to the overall pace and direction of technological change”, say Calel and Dechezlepretre. “For this reason, the Scheme in its current form might not be providing the economy-wide incentives necessary to bring about low-carbon technological change on a larger scale.” Long-term solution UK Secretary of State for Energy and Climate Change, Edward Davey said legislation “should come out by the end of the year to deliver structural reform to the ETS.” Letting the system fail is not an option for Davey, saying “the ETS is the most cost effective tool we have”. Without it, he said, “Europe will likely revert to a disjointed and fragmented array of national measures which will be far more expensive for industry and consumers alike.” Long-term options include setting a minimum price for C02 or removing permits entirely, not simply postponing them. Environmental NGO Greenpeace calls on the European Commission to put forward a proposal for removing 2.2 billion allowances from the scheme before 2020, and to table a concrete post-2020 climate and energy proposal. “This should include an EU domestic carbon emissions target for 2030 of at least fifty five per cent compared to 1990 levels, a renewables target and an energy efficiency target. As long as EU decision-makers fail to put in place an effective scheme, national governments must fill the gap with national coal and carbon taxation schemes,” said the statement. Next Steps The next step will be for the Council – representing national governments – to take a decision on the reform. An increase to the price of carbon may be a difficult sell for those member states still reliant on coal but Connie Hedegaard, EU Commissioner for Climate Action, is optimistic that an agreement can be reached, saying “The sooner, the better, so that we can move on to the structural reform of the ETS as soon as possible.” Continue reading
AfDB Continues To Support Low-Carbon Development Pathways For Africa
By: SEM Contributor on July 13, 2013. AfDB, co-organizer of the 5th Africa Carbon Forum in Abidjan, Côte d’Ivoire TUNIS, Tunisia, July 11, 2013/ – For the fifth time the African Development Bank ( http://www.afdb.org ) was a co-organizer of the Africa Carbon Forum (ACF) along with UN agencies, the World Bank and the International Emissions Trading Association (IETA). This important forum was held from July 3-5, 2013 in Abidjan, Côte d’Ivoire. Given the challenges of the current carbon market, ACF reflected on how the Kyoto Protocol’s Clean Development Mechanism (CDM) and other mitigation and financing mechanisms have performed to date ad discussed how those mechanisms could continue to be successfully applied on the African continent. As the premier financing and development institution for Africa, committed to promoting viable financing solutions for climate-friendly development on the continent, the AfDB strongly supports the continuation and the scaling up of those mechanisms. Over 400 participants took part in the three-day program opened by Daniel Kablan Duncan, Prime Minister of Côte d’Ivoire, who expressed his support for low carbon development as a viable option for his country. “To date Africa has the lowest number of registered CDM projects representing a little more than two percent of the overall registered CDM projects worldwide and is not sufficient,” said Kurt Lonsway, Manager of the Energy, Environment and Climate Change Department at the African Development Bank. He added: “We hope that continuation and strengthening of CDM will facilitate the participation of many more on the continent.” During the first Plenary Session on CDM: Achievements and Lessons Learned; The Future of the Mechanism moderated by Lonsway, he polled the audience twice on whether they felt that the CDM had a future in Africa. Just over half were positive demonstrating that important improvements will be required to reduce transaction costs and simplify requirements for African countries to access the mechanism. The AfDB has embarked on an ambitious program at powering a low-carbon pathway in Africa. Through the Energy, Environment and Climate Change Department, the Bank serves as a platform to deliver advisory services necessary to mobilize transformative environment and climate finance, including helping countries and project gain access to carbon markets. Funds channeled through financing windows such as the Climate Investments Funds (CIF), the Global Environment Facility (GEF), a recently created Sustainable Energy Fund for Africa (SEFA), the first phase of African Carbon Support Programme (ACSP), and the new Africa Hub of the Sustainable Energy for All Initiative (SE4ALL) are directly invested to support the transport, communications, agriculture, water and energy sectors. The goal is to ensure that climate finance effectively reaches the continent and is tailored to Africa’s needs. During the 5th Africa Carbon Forum, the latest developments of the regulatory framework, including possible new market-based mechanisms to enhance the cost-effectiveness of climate mitigation actions, were discussed and debated. Diverse mitigation instruments such as domestic cap-and-trade, low-emission development strategies and nationally appropriate mitigation actions were highlighted. The Forum also stressed the growing interest in low-carbon development finance opportunities and the commitment of the development partners to support them on the continent. Distributed by the African Press Organization on behalf of the African Development Bank (AfDB). Continue reading
