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Energy Risk USA: Firms Optimistic About California Carbon Market
Author: Mark Pengelly Source: Energy Risk | 16 May 2013 California flies flag for emissions trading Energy market participants upbeat about development of California emissions market, despite legal threats A panel of energy market participants, including representatives of Texas-based power generator Calpine and California-based oil and gas firm Chevron, expressed confidence in the future of the Californian emissions market at the Energy Risk USA conference on May 15. Created under Assembly Bill 32 (AB 32), California’s carbon market was launched with an inaugural quarterly auction of California Carbon Allowances (CCAs) on November 14 last year. A second auction was held on February 19 and a third is scheduled to take place on May 16. Daniel Lieberman, senior advisor for environment and climate change at Chevron, said he expected prices for CCAs to reach $14–15 per tonne at the May 16 auction – well above a minimum $10/tonne floor set by the California Air Resources Board (Carb). As you wait for every milestone to be achieved, there are groups… with lawsuits tucked in their back-pockets The upbeat tone on California’s carbon market contrasts with deep pessimism about the future of the the European Union Emissions Trading System (EU ETS), which has been beset by a massive oversupply of emissions, leading to rock-bottom prices. Elsewhere, the Regional Greenhouse Gas Initiative (RGGI) – a cap-and-trade scheme run by nine states in the US northeast and mid-Atlantic regions – has run into similar difficulties. Despite this, “AB 32 has not been that boring – in fact, it has been quite interesting to follow what has happened as the market takes shape”, said Lieberman. The potential of the Californian carbon market was “a stark difference” to the kind of malaise seen in the EU ETS and RGGI, he added. In part, the success of the Californian emissions market is due to the fact Carb sought to remedy some of the problems encountered by other schemes, say market participants. That included placing restrictions on the role of offsets in the scheme, setting a minimum and maximum price and attempting to stop carbon leakage – or the phenomenon whereby emitters simply move their emissions outside the state. Such measures were motivated by a mistrust of unregulated markets in the wake of California’s 2000–01 energy crisis, said Ethan Ravage, west coast lead at the Geneva-based International Emissions Trading Association (IETA). “In the case of California, everybody has long memories of what happened in 2000 and 2001. They remember what happened with [Houston-based] Enron and they don’t want price spikes in environmental markets that are going to affect consumers, so they’ve actually done a fair amount of work in setting reserve prices in the auctions so there’s a de facto floor and ceiling.” However, the way the scheme has been implemented has given rise to a range of legal challenges – and it is thought that more could follow. From the scheme’s inception, only electricity generators and other major static sources of emissions, such as refineries, are required to buy CCAs. The industries covered by the system would be expanded, Ravage noted, with transportation becoming included in 2015. “As you wait for every milestone to be achieved, there are groups in the background on the extreme left and extreme right with lawsuits tucked in their back pockets,” he said. “There are challenges around whether the state has the authority to hold auctions as opposed to having a tight allocation of allowances; whether it has the authority to regulate out-of-state power; and whether it has the authority to regulate something called resource shuffling, where you just change the way power is dispatched into the state.” But despite the existence of such threats – and the potential impact they might have on prices – panel participants agreed the best strategy energy firms could follow was to simply comply with the scheme. “We hear many stories about lawsuits that are written and ready, just waiting for somebody to file. But we don’t really have a choice – we have to live with the rule,” said Matthew Suhr, director of market analysis at Calpine. On April 19, Carb voted in favour of rules that will see California’s emissions market link up with that of Quebec from January 1, 2014. Continue reading
China’s Carbon Market Unlikely To Go Global For Decades
May 16, 2013 China, the world’s largest greenhouse-gas emitter, probably won’t import carbon credits for two decades as global diplomats craft a new emissions market that will increase supply, the nation’s climate negotiator said. Using offsets from outside China in that period is an “unlikely scenario,” Su Wei said in an interview in Bonn earlier this month. “Rather, internally we will have a lot of offsetting credits.” United Nations envoys are seeking to put together a new carbon market as the world negotiates a climate-protection agreement to take effect around 2020. The need for greenhouse- gas action may surge by then, when global emissions will probably exceed by at least 18 per cent the limits scientists have said will keep temperatures from rising 2 degrees Celsius, the UN estimated in November. “We are not very hopeful that we’ll see a global agreement over the next few years” that will increase demand, said Albrecht von Ruffer, Hamburg-based managing partner of Nserve Environmental Services GmbH. While China, South Korea and California are building or have installed carbon markets, “we don’t expect them to allow meaningful volumes of imports,” he said in a May 13 phone interview. The European Union is due to publish data today showing which emission credits were used by factories, power stations and airlines last year. Excess supply Certified Emission Reduction, or CER, offsets are created from carbon-reducing projects in developing countries under the Clean Development Mechanism, the biggest UN market by supply. Emission Reduction Units are from developed nation projects under the UN’s Joint Implementation mechanism. Supplies from both programs were at 2.1 billion tons as of May 14, according to data from the website of the UN Framework Convention on Climate Change. That’s more than the 1.7 billion tons allowed for compliance in the EU carbon market in the 13 years through 2020, according to that market’s rules. CERs for December have jumped 48 per cent so far this month, amid buying by EU emitters for compliance in the world’s largest carbon market. They rose 1 cent, or 2.6 per cent, to settle at 40 cents a ton on ICE yesterday in London. Waning demand for UN credits drove prices 90 per cent lower in the past year, according to ICE Futures Europe in London. New market A new market might encourage installation of the latest emissions-cutting technology in developing-nation industries, said Artur Runge-Metzger, the EU’s lead negotiator. The plan, still being put together, would stimulate nations to enact policies requiring industries to cut emissions, Runge- Metzger said May 2 in an interview in Bonn. For instance, a facility in the waste-management industry may get credits for implementing technology that’s even more advanced than set out in a government policy. “That may be the part that is going to be credited,” Runge-Metzger said. “You don’t have to go project by project, or waste-management site by waste-management site.” Crediting would result from a monitoring system that’s industrywide rather than project-specific, he said. Under the Clean Development Mechanism, each project must win registration from UN-overseen regulators and monitor its own emission reductions. ‘Not attractive’ A new offsetting market is “not attractive” to China, Su said in a May 2 interview in Bonn. Nations need tighter greenhouse-gas limits to spur consumption of credits, he said. “If there are no ambitious targets, there will be no demand,” he said. “So what’s the purpose of starting a new market mechanism?” Carbon markets are needed to encourage clean technology and protect the climate, according to Norway, a country that is buying offsets. “We believe the carbon markets will be very important in the years going forward,” Kjetil Lund, an Oslo-based deputy minister in the nation’s finance ministry, said in a May 7 phone interview. “We’re not happy with the very low prices.” Nserve, founded in 2003 before the EU’s market began, also is buying selected offsets, favoring those that may be alternatively marketed to companies and people who wish to voluntarily cut their emissions, von Ruffer said. That’s because there’s still not enough certainty about the future of international regulated markets, he said. “I wouldn’t build a business on this hope at the moment.” Read more: http://www.smh.com.a…l#ixzz2TSOXbVhd Continue reading
Overseas Filipinos remit $22 billion to families
Overseas Filipinos remit $22 billion to families Lily B. Libo-on / 16 May 2013 The primary and most visible means through which migration has its strong impact on development for labour-sending countries is in the area of financial remittances, transfer of skills and knowledge and creation of international network of migrants that can facilitate trade and investment. Rosalinda Dimapilis-Baldoz, Philippine Secretary of Labour and Employment was giving her keynote address at the opening of the “International Conference on Labour Mobility — Enabler for Sustainable Development”, before 150 experts, representing government officials, international researchers and executives on May 14, in Abu Dhabi. The topic of discussion was cross-border movement of labour and its impact on development. She said that in a World Bank Report, remittance flows to the developing world now totals $406 billion, increasing by 6.5 per cent over the previous year. “Around 10.4 million Filipinos overseas in more than 200 countries remit to their families $22 billion, an increase of 6.3 per cent from the previous year. Remittances sent to families back home usually help to cover daily consumption needs, which in itself contribute to the Millennium Development Goal of eradicating poverty and hunger. Remittances also enable migrant families to send their children to better schools, access health services, build decent homes, and invest in entrepreneurial pursuits and technology transfers,” she added. Baldoz, who is also chair of the Abu Dhabi Declaration, said that beyond their economic contributions, labour mobility has promoted greater peace and security through increased people- to-people relations where migrants act as ambassadors of goodwill and help create a favourable climate for multi-culturalism. She believed that countries of destinations that support the principle of shared human resource and shared responsibility in managing migration, help create positive experiences for migrants while working and living in the host countries. “They respect their internationally recognised human and labour rights, facilitate their fast and easy access to labour justice, including smooth repatriation, especially during crisis and emergencies, ensure faster cultural integration and assimilation, promote ethical recruitment policies and practices, foster cooperation in minimising labour exploitation and debt bondage, undertake public-private or private-private partnership on education and training for sustainability of labour supply, among many others.” She said that the 2012 Framework of Regional Cooperation adopted by the Abu Dhabi Declaration 2 in Manila outlines many of these key challenges in the various phases of contract labour mobility cycle to optimise the development benefits and minimise the attendant social cost. “The Philippines as Chair with the UAE as Co-Chair will set up the structure and modalities to come out with priority projects to address these challenges in time for its 2014 Meeting.” She also said that participating nations in the Global Forum on Migration and Development (GFMD) have repeatedly asserted that “migration is not merely movement of people from one place to another”. That development is not simple economic growth. And, that migration that is linked to development should “advance, empower, and increase human capabilities, enlarge the scope of human choices, and create a safe and secure environment where citizens can live with dignity and equality. “In this era of a globalised economy, labour mobility across countries and regions has become increasingly significant,” she added. “In the ASEAN, for example, as the region moves towards economic integration by 2015, countries of origin and destinations have started to address its impact on the mobility of its skilled workers and professionals. Bilateral labour agreements and regional framework agreements on worker mobility, including mutual recognition agreements (MRAs) are important mechanisms to facilitate the free flow of services and skilled labor for economic and social development. The ASEAN Framework Agreement on Services (AFAS) and MRAs in eight professional services are expected to enhance cooperation and improve competitiveness of its industries. Outside the ASEAN region, the Philippines, has a Partnership and Cooperation Agreement with EU on the mobility of professionals to support negotiation of free trade agreement between Asia and Europe. The Philippines and EU have initiated efforts towards recognition of the qualifications of Filipino health professionals using the Flemish region of Belgium as the take off point.” As a labour sending country, the Philippines pursues cooperation on various aspects of managing labour mobility and undertakes unilateral, bilateral and multi-lateral actions to optimise the benefits of international contract worker mobility and minimise its social cost. Other than regulation and protection measures, the system is strong on welfare promotion. She concluded that mutuality of benefits derived from migration for both sending and receiving countries can only result in a wide range of unilateral, bilateral and multi-lateral cooperation for a better managed and orderly labour mobility for more inclusive and sustainable development outcomes for all. “In this conference,” she said, “we hope that participants can compile socio-economic evidences to make visible the development impact of migration that also help create a safe and secure global migration environment, develop targets and indicators to assess the effects of migration as an enabler for development, identify models of government support and incentives towards a more productive and rewarding experiences of migrants in countries of destination, and outline in greater details areas of cooperation on the four phases of international labor mobility for sustainable and inclusive development among migrants and their communities.” lily@khaleejtimes.com Continue reading
