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Carbon Voting Gets Dirty
4:38 am Jul 3, 2013 Carbon Voting Gets Dirty These signs were hanging from parliament members’ door handles in Strasbourg. They were put there by the International Paper Co., which said it agreed with the climate-change fighting scheme, but not the proposed fix intended to raise carbon emission prices. Courtesy of International Paper Co. European Parliament was gearing up to vote Wednesday on whether to rejuvenate, or let lie fallow, its flagship climate-change fighting policy, the Emissions Trading System. Shortly beforehand, the outcome remained too close to call with any definitive certainty. Again. The legislation is a compromise on what parliament very narrowly shot down in April. For those members of parliament having difficulties making the decision this time around, there was no shortage of opinions being pushed. MEPs, by all accounts all 766 of them, showed up to the office Monday with a hotel-style sign hanging from their office door handles by International Paper Co. IP -0.16% “Do as you are told!” said the tear-drop sign featuring a full mug shot of Connie Hedegaard, European commissioner for climate action. “The Climate Action Commissioner refused to accept your democratic decision and is now telling you to compromise your principles,” it said. “The choice is clear. Vote NO again to preserve your political credibility.” The effort was condemned by Matthias Groote, MEP in the Social Democratic party who heads the parliament’s environment committee. “I’m okay with lobbying,” Mr. Groote said. “Everybody has a right to share their opinions. It’s part of the democratic process.” “But this is not fair. We work very hard. To simplify it like this is a lie,” Mr. Groote said. An International Paper spokesman said the company supports the ETS scheme, just not the proposed fix. The proposal, known as backloading, is intended to lift the cost of emitting carbon-dioxide, which collapsed alongside the drop in demand for electricity during the economic downturn. The lack of industrial activity resulted in too many carbon permits in the market. The new rules would temporarily reduce this oversupply. The higher prices anticipated from this could help reintroduce incentives for cutting the use of fossil fuels and developing renewable technologies. But the fix is technical and not easy to understand. Analysts have said it probably won’t raise carbon prices enough to have an impact. Yet without this attempt at reform, the EU’s carbon market will almost certainly fall into obscurity, while California, Australia, and even China race ahead with their own carbon markets. So just how close will this vote be? About as close as the last one. In April parliament voted 334 to 315, with 63 abstentions. This was so close for a parliamentary vote that the a whole host of variables could have shifted it, including nothing to due with climate or industry at all, said Jerzy Buzek, EPP member and former prime minister of Poland, who is against backloading. The vote in April “was just one day before the funeral of Margaret Thatcher,” Mr. Buzek said, adding that if it had been “on the day of the funeral, backloading would have been approved. All the conservatives would have gone to London, and the result would have been quite opposite.” With no major state funerals scheduled for Wednesday, expect this to go to the wire. Continue reading
Investors Call For Stronger Climate Investment Policies
28 Jun 2013 GLOBAL – The Institutional Investors Group on Climate Change (IIGCC) has called on European policymakers to create an investable low-carbon energy market by urgently tabling proposals for detailed policy. The group of investors, worth a combined €7.5trn, signalled its support for the EU’s proposed target of a 40% reduction in greenhouse gas emissions by 2030. But in its response to the European Commission’s 2030 Climate and Energy Green Paper, investors have said they would like to see draft legislation in place before the replacement of the current Commission and EU parliamentary elections next year. The longer investors have to wait for policy certainty, the stronger the economic pressure to defer investment decisions, the group said. U-turns on support for renewables and the collapse of the carbon price have meant that investors are losing confidence in Europe as a place to invest in energy. The IIGCC also emphasised the need for strong and reliable carbon price signals. While the compromise backloading vote on the Emissions Trading Scheme last week was welcome, investors believe the permanent removal of the structural surplus of carbon allowances is required. Investors would also welcome the introduction of a mechanism to reduce the risk of surpluses emerging in the future and have urged the Commission to review how other cap-and-trade schemes around the world – such as South Korea and California, or even China – have addressed this issue. Stephanie Pfeifer, chief executive at the IIGCC, which represents more than 80 of Europe’s largest investors, told IPE: “It is probably still possible to reach the 40% reduction in greenhouse gas emissions target by 2030. “But it is only possible with a lot more investment, and this will only come with the right policy in place. The longer we wait, the harder it will be, and the more investment is needed.” She pointed out that transitioning to a low-carbon economy require investment of €1trn by 2020, increasing to perhaps €7trn in the next 40 years, according to the Commission’s own projections. “New capital requirement rules mean institutional investors will need to provide more of this capital, but, to do so, they will need clear policy signals,” she said. “Without clear policy signals, allocations to infrastructure, especially low-carbon infrastructure, will be limited. Investors are therefore calling on the EU to put in place stable, long-term climate and energy policies to make its vision of a low-carbon future investable.” In their response, institutional investors have also expressed concern that policy drivers of both energy efficiency and renewable technologies in Europe are unnecessarily fragmented. Investors would therefore like to see more emphasis on pan-European instruments that work in tandem with the ETS. In addition, they have called for the Commission to consider how it might take steps to block further retroactive changes by EU member states to their renewables support packages and called for Europe to increase the ability of institutional investors to provide capital to energy infrastructure by allowing it to be included in tax efficient and liquid investment vehicles such as real estate investment trusts and master limited partnerships. The full response can be found here. In other news, the world’s 1,000 largest asset owners, including about 800 pension funds, have been challenged to disclose more detail of how each is managing climate risk. The Asset Owners’ Disclosure Project (AODP) has distributed its second global independent survey to the 1,000 funds responsible for more than $60trn (€46trn) in retirement savings across 63 countries. Fifty questions seek disclosure on how each is avoiding the looming carbon bubble in their fund portfolios. Responses will be researched, collated and scored, with the 2013 index being published for all funds later this year. Julian Poulter , AODP executive director, said: “Pension funds are long-term investors facilitating hundreds of millions of peoples’ plans for their later life. Fund trustees have the basic obligation to look after these nest eggs by managing all the known risks. “Smart fund trustees know the risks inherent in fossil fuel-related assets and are getting ahead of the curve when it comes to disclosing how they manage climate risk, including by investing in low-carbon assets to rebalance those risks. “Indeed – this is not about moral responsibility anymore but fundamental investment methodology. It seems highly likely that it is also a legal responsibility.” The AODP survey focuses on five core categories – transparency, risk management, investment-chain alignment, active ownership and low-carbon investment. It includes asset owners in all regions of the world. Last year’s survey and index are available here . Author: Nina Röhrbein Continue reading
Poll Finds 51% Of UK Public Want More Investment In Renewables
02 July 2013 A poll by the Institution of Mechanical Engineers on UK energy policy has found that 51% of people think the government should support the construction of more renewable energy sources like solar, wave and tidal power. The people polled were asked about what types of technology they would favour to secure future energy supplies. Renewable energy sources like solar, wave and tidal power were the most popular, with 51% of people saying the Government should provide more support for these projects. 43% said there should be more support for offshore wind farms, 31% for onshore wind farms; while as few as 8% supported more gas-fired power stations. The poll of over 2,000 members of the public also found that 33% of people would consider personally investing in small-scale community renewable projects like wind farms, solar farms or small-scale biomass plants. Of the people surveyed, 25% said they would consider investing in Energy Bonds where money would be used to build large energy infrastructure projects like nuclear power stations or large offshore wind farms. The poll also revealed significant concern over the UK’s direction – 64% of the public is concerned about possible blackouts, and that 93% are worried about higher electricity and gas bills. “These results show there is a severe lack of public confidence in the Government’s confused energy policy,” said Dr Tim Fox, Head of Energy and Environment at the Institution of Mechanical Engineers. “There are clear concerns that there is an insufficient amount of investment in new energy infrastructure and that the UK faces a future of high energy prices for consumers and possible blackouts. Confidence in Government energy policy has been damaged by its mixed messages on low-carbon energy policy and uncertainty over its support for a new nuclear build programme,” added Fox. “Government must stop playing politics with our energy system and the environment and make clear exactly how it is going to ensure that the country’s future needs are affordably met,” said Fox. “It is only with this clarity that energy companies will have the confidence to invest in the infrastructure needed to keep the nation warm, lit, moving and working.” This poll follows the publication of another Institution poll on 28 May which found that 43% of the public would support a Government subsidy for the construction of new nuclear power in the UK – which compares with just 28% who said they would not. The poll of 2,034 people was carried out by ICM, on behalf of the Institution of Mechanical Engineers , on 3-6 May. Continue reading
