1.1. Bonn climate negotiators drag on with little progress
4 June 2010, DW
UN climate talks have resumed in Bonn to prepare for a December summit in Mexico. Officials say a legally-binding agreement will be impossible, but Mexico’s negotiator accuses them of lowering expectations.
UN climate negotiators from 185 nations are in Bonn grappling line-by-line with a 42-page rough draft of a framework agreement for a new climate pact to replace the Kyoto Protocol. The current climate talks last until June 11 and are intended as a preparation for the upcoming United Nations climate summit in Cancun, Mexico, in December.
Expectations of a big agreement are not high after the failure of the Copenhagen summit six months ago.
Yvo de Boer, chief of the UN Framework Convention on Climate Change (UNFCCC), admits that any treaty is unlikely to be completed before the end of 2011. De Boer tendered his resignation after last December’s Copenhagen climate change talks, which ended in widespread disappointment and frustration with only vague promises to cut CO2 emissions.
Leaders from 194 countries were supposed to finalize a legally binding post-2012 treaty to replace the Kyoto Protocol. All they came up with was a commitment to reduce greenhouse gases that cause global warming and a pledge to assist developing countries combat climate change.
But Mexican negotiator Luis Alfonso de Alba contradicted de Boer Wednesday in telling Reuters he believes a climate deal is possible.
"Mexico does not want to raise false expectations but we certainly are ambitious," he said. "The U.N. secretariat, Yvo de Boer and some other actors, the European Commission, Connie Hedegaard, have frequently referred to the impossibility of reaching a legally binding agreement in Cancun, (and) do not imply that important decisions can be taken in Cancun. We do not share that view. They are somehow lowering expectations for Cancun."
Nations divided into camps
Points of contention include whether to refer to the Copenhagen accord, how steep emissions cuts should be, and how to distribute cuts between rich and poor states. Speaking at a news conference in Bonn de Boer told journalists reaching a legally binding agreement in Cancun is "extremely unlikely."
"I think that especially developing countries would want to see what an agreement would entail for them before they would be willing to turn it into a legally-binding treaty," he said.
In fact, developing countries have raised new demands and pressed developed countries to take greater responsibility for climate change. China and the G77 say the new text needs to emphasize more emissions cuts to be made by developed countries.
African countries want a "binding, inclusive, effective" deal made in Cancun which does not replace the Kyoto Protocol. Small island states reject references to the year 2011 in the new text and say the emissions cuts pledged so far are not enough and constitute a "death sentence" for many island states.
A group including the United States, Japan, Russia, Canada, Australia, Ukraine, New Zealand, Kazakhstan and Iceland says the new text "misses key elements." The group wants a "long-term framework" beyond 2010, climate aid and the saving of forests.
Bolivia wants the text to include a target for levels of greenhouse gases in the atmosphere and that it specify a percentage of national budgets be allocated for climate action. The country suggested 6 percent of GDP, in line with defense budgets.
The European Union said the new text should refer to the Copenhagen accord and should include emissions reduction targets for individual countries. Tuvalu said rejected that any reference to the Copenhagen accord or wording from the accord should be included in the new text.
Moving on from Copenhagen
Last month UN Secretary-General Ban Ki-moon named Costa Rica’s Christiana Figueres to replace de Boer. Analysts expect her to shift the emphasis from legally binding emission cuts to developing green technologies.
The 12-day Bonn meeting will attempt to unravel some of the decisions made at the failed Copenhagen talks. The so-called Copenhagen Accord sets a voluntary goal of limiting warming to two degrees Celsius (3.6 degrees Fahrenheit). It was brokered by a couple of dozen leaders in the summit’s final desperate hours.
To show that the accord has credibility – and restore trust in the overall process – developing countries are now calling on industrialized countries to honor their pledges of financial support.
Under the Copenhagen Accord, the European Union, the United States, Japan and other wealthy countries pledged $30 billion (24.3 billion euros) in aid from 2010-2012, with a promise of contributing 100 billion dollars a year by the end of the decade.
Faced with the ongoing debt crisis in the eurozone, the EU appears to be backpedaling on its initial goal of unilaterally cutting CO2 emissions by 30 percent by 2020 against 1990 levels to "kick-start" climate action in developing countries.
EU Commissioner for Climate Change Connie Hedegaard said last week that conditions for a 30-percent move "are clearly not met." The EU had previously proposed increasing their target to 30 percent from 20 percent if other countries followed suit as part of a new climate deal. A study presented by the EU commissioner estimated that this would cost EU countries 81 billion euros.
"Of course, it’s not an easy time to discuss money that comes out of the public purse right now," said Hedegaard.
France and Germany – the EU’s two largest economies – have warned member countries to tread carefully on the issue.
1.2. UN climate talks resume, EU must resist industry lobbying and
31 May 2010, FOEE
The first major UN climate negotiations following the failure of talks in Copenhagen last December begin today. The European Union must play an active role in progressing the talks by reaffirming its commitment to legally binding emission cuts under the Kyoto Protocol and committing sufficient public money for developing countries to tackle climate change, says Friends of the Earth Europe.
Friends of the Earth Europe is calling on the EU to resist industry lobbying and unilaterally increase its emissions target to at least 40 percent domestic cuts by 2020. 40 percent cuts are not only possible, but affordable and necessary as recent research from Friends of the Earth demonstrates. Last week, the European Commission published research on the impacts of moving from the current 20 percent unilateral target to a 30 percent. The powerful industry lobby is fiercely resisting this move however, jeopardising EU credibility on the international stage.
Susann Scherbarth, climate justice campaigner for Friends of the Earth Europe, said: “Connie Hedegaard has taken a cautious first step in outlining the move to a 30 percent target, but has fallen short of what’s needed. Domestic emissions cuts of at least 40 percent by 2020 – without offsetting – are the minimum needed for the EU to do its fair share. A bold move from the EU could unlock the stalled international negotiations, and provide a real boost to our chances of avoiding catastrophic climate change. The new climate commissioner must now take on the powerful lobbies in Europe holding back progress.”
Real climate finance needed
Finance for developing countries – those least responsible for climate change yet who face its worst impacts – is top of the agenda for Bonn. Friends of the Earth Europe is calling for all developed countries to pledge sufficient public money through the UNFCCC, additional to existing aid budgets, and ensure this finance supports the aims and struggles of grassroots communities.
Tom Picken, International Climate Campaigner with Friends of the Earth England, Wales and Northern Ireland, said: “Developed countries have so far said they will provide US$10 billion per year until 2013, yet a large proportion of even this paltry amount is intended to be stolen from existing aid budgets instead of comprising new and additional money.”
Friends of the Earth is calling on rich countries to reaffirm their commitment to their legally binding obligations under the Kyoto Protocol, where rich countries accept their responsibility for causing climate change by agreeing to cut their emissions first and fastest. New Kyoto targets for a second commitment period for industrialised countries of at least 40 per cent reductions – without offsetting – is the minimum requirement to provide any chance of avoiding catastrophic climate change.
1.3. Murky climate finance risks undermining trust at U.N. talks
4 June 2010, AlertNet
Urgent financial help for poor countries to curb their carbon emissions and adapt to climate change is viewed as one of the best ways to rebuild the trust needed to secure a global deal at U.N. climate talks. But is it shaping up to be the hoped-for silver bullet?
The non-binding Copenhagen Accord – glued together at December’s summit and backed by some 120 countries – says developed nations will provide "new and additional resources, including forestry and investments through international institutions, approaching $30 billion for the period 2010-2012 with balanced allocation between adaptation and mitigation".
But the document is not specific about who should give what to whom and how. Neither does it state which funds can be counted towards this "fast start" commitment nor how to define "new and additional".
Those ambiguities are proving a headache for development and environment campaigners, as well as some poor nations. They suspect much of the money is being diverted from official development assistance (ODA) budgets, or will be counted towards aid targets, undermining poverty reduction efforts.
As a result, there is growing interest in obtaining clear, transparent information from wealthy nations about the sources and uses of the money they are counting towards their fast start pledges.
This week, at the latest round of U.N. talks in Bonn, all eyes were on the European Union update on its members’ short-term climate aid.
On Thursday, the European Commission said the EU is on track to deliver 2.39 billion euros of fast start finance in 2010, with a total of 7.55 billion euros committed over three years – more than the 7.2 billion euros promised at the Copenhagen summit a few months ago.
But it did not offer a country-by-country breakdown, as some activists had hoped.
In a factsheet, the EU stated that its fast start contributions "will not reduce the amount of funding provided to fight poverty and continue progress towards achievement of the Millennium Development Goals".
But campaigners don’t agree. In a statement, Climate Action Network (CAN) Europe – a coalition of over 130 citizens’ groups – welcomed the EU’s efforts to provide climate funding to the world’s poorest but warned "the lack of transparency in the EU’s latest progress report could undermine trust at a very delicate stage of the talks".
"This unwillingness to be clear about the sources of their fast start finance is only corroborating the grapevine, which contends that a great majority in the EU intend to recycle their ODA commitments and baptise it climate finance," said Augustine B. Njamnshi of the Pan-African Climate Justice Alliance.
"This lack of clarity is frustrating developing countries, especially those who quickly associated with the Copenhagen Accord with the hope of getting something from the package."
Artur Runge-Metzger, the EU’s chief climate negotiator, told AlertNet from Bonn that the European Union is working to provide information on individual member states’ fast start aid by the U.N. climate summit in Cancun at the end of the year.
He said countries currently have different definitions of "new and additional resources". But the European Commission’s share is coming from its budget reserves, meaning it is not being taken from funds that have been promised for development cooperation, he noted.
Some EU states are using the climate finance they provided in 2009 as a baseline, and a small number that have already reached the U.N. target of giving 0.7 percent of their gross national income in aid, including the Netherlands, are counting the climate cash they are offering on top of that.
Poor nations say climate aid should only be classed as new and additional if it is over and above the longstanding – and widely unmet – 0.7 percent target.
"It’s no good having individual parties reporting on their own finance contributions," Oxfam’s EU climate change policy advisor Tim Gore told AlertNet. "We need a common framework for accounting for the flows."
A factsheet issued by the United States earlier this year says climate-related budget appropriations total $1.3 billion for fiscal year 2010, with a further $1.9 billion requested for 2011. It says the administration is "moving quickly" to disburse climate funding this year, but contains only limited information on the fast start money and where it will be allocated.
A paper released by the International Institute for Environment and Development (IIED) this week outlines two workable options for defining a baseline that would balance the demands of donor and recipient nations.
In the short-term, the briefing suggests climate financing should be counted as new and additional only if it comes on top of a baseline of predefined projections of development aid. And in the longer-term (after 2012), only assistance generated from novel funding sources – such as international air transport levies and currency trading levies – should be included.
"When is a promise not a promise? When there’s no specified baseline that would allow anyone to know if the promise has been fulfilled," said co-author J. Timmons Roberts, director of the Center for Environmental Studies at Brown University in the United States. "That’s the case with the Copenhagen Accord’s climate finance promise, and that’s why this issue needs immediate attention to get the negotiations back on track."
Yet while pressure is growing for the U.N. climate talks to agree on a definition, Runge-Metzger, who heads the European Commission’s Directorate-General for Climate Action, believes it would be tricky.
"I am rather pessimistic that you would be able to agree to something with all the 193 parties, so that means that transparency in terms of the numbers is ever more important," he said.
Anti-poverty group ONE issued an open letter to negotiators on Thursday, urging governments and institutions to apply five principles to their climate finance promises, including ensuring they are transparent and additional, and explaining how they will be kept.
Another aspect of the EU’s fast start finance that has come in for criticism is that, of the 1.53 billion euros of 2010 money that has been alllocated so far, about two-thirds is being spent on mitigation activities, including preventing deforestation, and only one-third on adaptation.
"At the moment, the bulk of the money is more likely to go to larger emerging economies instead of the world’s poorest," warned Oxfam’s Gore in a statement.
Runge-Metzger said it would be more accurate to include all sources of climate finance in the breakdown, not just fast start money. But if there is an imbalance, with 36 percent of this year’s pledges yet to be allocated, "now is the time to make sure we have a balanced outcome at the end", he noted.
Aid groups have also been warning this week against providing too much climate finance as loans rather than grants, with Oxfam urging donors to avoid offering loans for adaptation and restrict them to one third of mitigation funding.
Just over a quarter of the EU fast start money allocated so far is concessional loans, with the bulk being given as grants.
Runge-Metzger said using loans is an efficient way of funding projects that generate good returns – for example, schemes that result in energy savings or more climate-resilient farming methods. These can found in both mitigation and adaptation work, he added.
For poverty campaigners, it’s more a question of ethics.
"At a time of economic emergency, when several poor countries are slashing critical health and education budgets to avoid a debt crisis, rich countries are considering saddling them with climate debt for a situation they did not cause and are worst affected by," Oxfam policy advisor Antonio Hill said in a statement. "It’s like crashing your neighbour’s car and then offering a loan to cover the damages."
The poorest countries agree with many of the criticisms voiced by activists, but the weaknesses of fast start finance have yet to become a major stumbling block in negotiations.
Runge-Metzger urged donors to make sure they satisfy developing countries’ curiosity about their funding plans. "It could turn into suspicion if the information is not provided in an open fashion and if people do not respond to questions," he said. "I think that could turn out to be very difficult."
1.4. Hedegaard insists EU will push for "ambitious outcome" in Mexico
4 June 2010, BusinessGreen.com
The EU’s climate commissioner Connie Hedegaard yesterday hit back at suggestions she had undermined the chances of success at the Cancun Summit later this year, insisting the EU would work for an "ambitious outcome" at the Mexico meeting.
Earlier in the week, Mexico’s lead climate change negotiator Luis Alfonso de Alba singled out Hedegaard and outgoing head of the UN climate change secretariat Yvo de Boer for criticism, arguing that their comments suggesting an agreement would not be reached at the Cancun Summit were hampering the chances of progress being delivered this year.
"The UN secretariat, Yvo de Boer and some other actors, the European Commission, Connie Hedegaard, have frequently referred to the impossibility of reaching a legally binding agreement in Cancun, (and) do not imply that important decisions can be taken in Cancun," he told news agency Reuters. "We do not share that view. They are somehow lowering expectations for Cancun."
Speaking in a press conference yesterday, Hedegaard insisted that the EU was fully committed to delivering progress towards a formal deal in Mexico.
"We in Europe are ready to do whatever we can to secure an ambitious outcome in Cancun, " she said.
However, she also reiterated her view that the best that could be hoped for in Cancun was agreement on the substance of a deal, adding that "it might be easier afterwards, in South Africa, next year, for instance, to agree on a future legal form".
Hedegaard’s comments came as the latest round of talks in Bonn approached their second week with little report of progress. The first week of talks were overshadowed by opposition from some Latin American countries to efforts to integrate parts of the Copenhagen Accord into a draft negotiating text. An alternative draft text is expected to be released over the weekend in the hope that it can restore momentum to the negotiations.
Meanwhile, UN Secretary-General Ban Ki-moon yesterday launched a new UN website, Greening the Blue, dedicated to helping the international body cut its own environmental footprint.
1.5. Regions build climate alliances with business
4 June 2010, EurActiv
Regional governments will work together with businesses to deploy low-carbon technologies even in the absence of a global pact on cutting greenhouse gas emissions, regional leaders told world governments on the sidelines of two-week climate talks in Bonn.
The Bonn talks, which started on Monday (31 May), are seeking to make advances on agreeing a new global climate treaty after the disappointing outcome of the Copenhagen climate conference last December.
Ministers and representatives of 15 regional governments from around the world met on the sidelines of the talks. They were brought together by the Climate Group to debate ways to curb global warming with representatives of leading companies and Yvo de Boer, executive secretary of the UN Framework Convention on Climate Change (UNFCCC).
The regional leaders stressed the role of regions and cities as "low-carbon technology laboratories" and argued that 50-80% of the action required to halt climate change will take place in cities and regions.
The conference followed on from a previous meeting during the Copenhagen climate conference, where the leaders highlighted pledges taken at regional level to combat climate change (EurActiv 17/12/09). They now agreed to meet again at the Cancún climate conference at the end of the year to review progress on those commitments.
Crucial low-carbon technologies to be developed in the regions include electric vehicles, LED lighting, renewable energy, building efficiency, waste management and smart grids, the regional leaders agreed.
De Boer remarked that business and government at regional and city level are on the front line of developing and implementing low-emission technologies.
"Their leadership, based on past experience, gives national governments clear case studies of what works in practice and their new ideas are essential to stimulate investment and innovation," he said.
Steve Howard, CEO of the Climate Group, expressed hope that the months leading up to Cancún should trigger a "race to the top" between all levels of government to guarantee progress towards a low-carbon economy.
2.1. EC investigation of nuclear vendors Areva, Siemens
2 June 2010, Platts
The European Commission has opened an antitrust case to determine whether non-compete clauses in civil nuclear technology arrangements between Areva of France and Germany’s Siemens violate EU competition rules, the EC said Wednesday.
The opening of antitrust proceedings means that the EC thinks the case merits investigation. "The EC has opened today an investigation to see whether non-compete clauses and other contractual arrangements between Siemens and Areva are in violation of competition rules," EC competition spokeswoman Amelia Torres said during the EC’s midday press conference, broadcast on the internet. She said an investigation was triggered by a complaint from Siemens after Areva took full control last year of reactor construction and services company Areva NP, a joint venture originally set up by Framatome (which later became Areva) and Siemens in 2001. But non-compete clauses between the two companies remain, even though Siemens sold its 34% stake to Areva last year.
The shareholders’ pact between Areva and Siemens for Areva NP is not public, but a French official familiar with it confirmed that it forbids either party from competing with the other in businesses covered by Areva NP for eight years after a potential divorce.
Siemens said in January 2009 that it intended to exercise its option, also provided for in the shareholders’ agreement, to sell its 34% stake in Areva NP to Areva and leave the joint venture. A few weeks later, Siemens said it had signed a memorandum of understanding on a nuclear power business partnership with Rosatom, a Russian state-owned nuclear conglomerate.
After bilateral discussions failed to produce an agreement on the price at which Areva would buy the 34% stake in Areva NP, the erstwhile partners last year asked an arbitration court to decide the matter. Industry sources have previously said that Areva was offering to let Siemens off the hook of the eight-year non-competition clause in exchange for a reduction in the price of the Areva NP stake. Areva has maintained a valuation of Eur2 billion (around $2.4 billion at current rates) on its books for the 34% stake. Areva CEO Anne Lauvergeon hasalways characterized the arbitration as friendly.
"The clauses that we are now analyzing relate to the period after Areva took control of the joint venture," EC spokeswoman Amelia Torres said. "We carried out an in-depth investigation in 2001 because we had concerns about this joint venture, but we imposed a number of conditions and cleared the joint venture and the non-compete clause, with the understanding that this was being cleared for the duration of the joint venture, not afterward when the joint venture was wound up," Torres added. She said the investigation would be carried out by the EC at EU-level, rather than by national governments. There is no timescale for the investigation as this depends on the complexity of the case and the extent to which the parties cooperate. Torres said she was not able to prejudge whether a fine would be imposed if the arrangement were found to be in breach of competition rules.
Areva is in the middle of a multi-billion euro investment program and a plan to sell 15% of Areva SA in an equity issue to foreign investors, approved by the company’s supervisory board almost a year ago, has still not been implemented. The Areva NP-Siemens turnkey reactor construction project at Olkiluoto in Finland is also facing a potential loss of Eur2.3 billion, according to Areva’s accounts.
At the time Siemens announced its intent to leave Areva NP, industry observers said Areva could be in a difficult position because the non-competition clause–its leverage against Siemens in the discussion about valuation of Areva NP–might not stand up under scrutiny of the European Commission.
3.1. EU ‘half way to 2020 emissions target’
3 June 2010, BBC
The EU is more than halfway to its target of cutting emissions by 20% from 1990 levels by 2020, a report shows.
The assessment by the European Environment Agency (EEA) reveals that emissions across the 27-nation bloc fell by 11.3% during 2008.
However, the EEA adds that the global economic downt
urn played a key role in the reduction.
Campaigners are calling on the EU to set more ambitious targets in order to tackle climate change.
"The greenhouse gas inventory shows that the EU is well on track to meet its emission reduction targets," said EEA executive director Professor Jacqueline McGlade.
"Although we are expecting an even sharper decline in 2009, caused mainly by the recession, we need to ensure that the downward trend in emissions
Overall, total emissions in the 27-nation bloc have been falling since 2003.
Downturn in demand
Data shows that greenhouse gas emissions fell by 99 million tonnes of carbon dioxide equivalent (CO2e) during 2008, making a total net reduction of 627m tonnes of CO2e from 1990 levels.
The 15 nations that made up the EU before it expanded to 27 countries are obliged under the Kyoto Protocol to reduce emissions by 8% between 2008-2012 from 1990 levels.
They also saw their emissions fall during 2008.
The countries – which include the UK, France, Spain and Germany – recorded a 76m-tonne CO2e reduction, taking emissions to 6.9% below 1990 levels.
The EEA report identified a range of factors that contributed to the reduction during 2008, including less demand for power as economic activity slowed.
The agency also suggested that high coal prices combined with a drop in natural gas prices saw nations replace coal with less polluting gas-powered electricity generation.
The apparent progress towards reaching the 2020 target has led to some campaigners calling for EU nations to adopt much more ambitious targets.
Europe’s new Climate Action Commissioner Connie Hedegaard recently published a paper that set out the arguments why the EU should commit itself to a unilateral cut of 30% by 2020.
Currently, EU policy is to adopt the 30% goal only if other major emitters, such as the US and Japan, agree to make similar reductions.
A number of countries, including France and Germany, are reportedly unwilling to support a unilateral EU move to 30%.
Damien Morris from Sandbag, a carbon trading campaign group, said he was supportive of the push for the higher target.
"But like a lot of NGOs across Europe, we would be much happier to see 40% targets under discussion," he told BBC News.
However, he quickly added that in an effort to prevent dangerous climate change, target-based policies were "scientifically incoherent".
"The problem is the amount of CO2 entering the atmosphere along the way to any target," he explained.
He added that a number of campaigners were calling on policymakers and politicians to switch from a target-based policy to schemes that focused on carbon budgets.
Writing in the Journal Nature in April, researchers said pledges made at December’s UN summit in Copenhagen are unlikely to keep the rise in the global mean temperature to 2C (3.6F) above pre-industrial levels.
Analysts at the Potsdam Institute for Climate Impacts Research in Germany said a rise of at least 3C (5.4F) by 2100 was likely.
The team added that many countries, including EU members and China, had pledged slower carbon curbs than they had been achieving anyway.
Mr Morris said the latest figures outlined in the EEA report were "fairly unimpressive".
"A huge slice of the 11.3% reduction was achieved long before the EU’s Emissions Trading Scheme (ETS) got underway," he told BBC News.
The ETS is the EU’s main mechanism to reduce emissions. Under the scheme, which was established in 2005, permits for emitting CO2 are distributed under a system of national allocations.
The permits can be traded among large energy users, allowing big polluters to buy extra ones from greener enterprises.
Mr Morris observed: "In fact, much of the reduction was made even before the Kyoto Protocol was ratified."
He said said that improvements in energy efficiency were driven by financial reasons, not environmental policies.
For example, he said, companies were keen to reduce their expenditure on rising energy costs in order to protect profit margins.
Business representative bodies called for a cautious approach towards increasing the EU’s emissions target to 30% without other big polluting nations taking similar action.
Responding to Ms Hedegaard’s paper, Dr Neil Bentley, CBI director for business environment, said: "More work needs to be done on the potential impact that raising the target would have on different sectors and on UK energy security.
"In the absence of a globally-binding climate deal, talk of unilaterally raising the EU 2020 target is premature.
"We believe a unilateral move by the EU could disadvantage manufacturers by subjecting them to higher costs than their international competitors."
3.2. China carbon market prospects not optimistic – official
6 June 2010, Reuters
Although China has supplied massive volumes of carbon credits to the global market, prospects for CO2 trade within the country itself are not optimistic, a senior climate official said on Sunday.
Lu Xuedu, influential vice-head of China’s National Climate Center and former member of the United Nations Executive Board responsible for approving clean development mechanism (CDM) projects, told a conference in Beijing that carbon transaction volumes within China were likely to remain low.
"The domestic market will probably remain small, because you just need to ask the simple question — Who will buy emissions in China?" he said.
Under the U.N.’s Kyoto Protocol, China has been under no obligation to cut its own carbon emissions, and Lu said the only potential domestic buyers were big enterprises or high-income celebrities trying to improve their reputations.
China has been a supplier rather than a buyer of carbon credits and remains a key player in the CDM, a part of the Kyoto Protocol that allows industrialized nations to invest in clean projects in the developing world in exchange for offsets known as certified emission reductions (CERs), which can either be traded or used to comply with mandatory national CO2 targets.
China has been by far the biggest supplier of CERs on the world market, but developers have not been allowed to trade the credits domestically. Instead, a plethora of new environmental exchanges in Beijing, Shanghai and elsewhere have expressed hope that voluntary emissions markets will emerge to fill the gap. However, voluntary volumes have so far remained negligible.
There have been around 3,000 trades of voluntary emission reductions (VER) in China so far, exchange officials said, involving a total volume of 10,000 tons. The global total stood at 93 million tons last year, down 27 percent compared to 2008, according to research released on Sunday by Bloomberg New Energy Finance.
U.S. KEY IN NEW DEAL
The first phase of Kyoto ends in 2012 and negotiations are still continuing on a new global pact after the world community failed to reach a binding deal in the Danish capital of Copenhagen at the end of last year.
Lu said if the United States failed to pass its own climate legislation by the end of July, it was unlikely that a new binding agreement could be sealed during the meetings in the Mexican resort of Cancun at the end of this year.
Out of the total 2,214 CDM projects approved by the Executive Board by the middle of May, 851 originated in China, making it the "most successful" CDM country, Lu said, but there is a backlog of more than 1,600 Chinese projects still awaiting approval.
China’s dominant position in the CDM sector has been criticized, with many accusing the country of producing large amounts of low-quality offsets from environmentally dubious projects involving the abatement of industrial gases like hydrofluorocarbons and nitrous oxide.
The Executive Board has been preoccupied with quality control. After turning its fire on the large number of wind power projects being submitted from China — which it said had been given favorable power prices and were therefore ineligible for CDM support — there are now indications that it is eyeing Chinese hydropower plants.
But the biggest problem with the current CDM market is demand, which remains uncertain as potential investors and project developers wait for clarity about what will happens after 2012, Lu said.
3.3. EU carbon flattens after U.S. jobs data
4 June 2010, Reuters
European carbon emissions futures flattened on Friday, after somewhat disappointing U.S. nonfarm payroll data was released, traders said.
EU Allowances for December delivery were unchanged at 15.26 euros ($18.60) a tonne at 1238 GMT, with light volume at 6,861 lots traded. Dec-10 EUAs have been trading in a 32 cent range on Friday.
Certified emissions reductions were up 9 cents or 0.72 percent at 12.65 euros a tonne, setting the EUA-CER spread at 2.61 euros.
"Crude got hit after the data was released and carbon has come off a bit now," an emissions trader said.
U.S. nonfarm payrolls grew at their fastest pace in 10 years in May, buoyed by recruitment for the decennial census, but private hiring slowed sharply as businesses opted to increase hours rather than hire new workers.
The Labor Department said on Friday payrolls rose 431,000 as the government hired 411,000 workers to conduct the pop
The Labor Department said on Friday payrolls rose 431,000 as the government hired 411,000 workers to conduct the population count, while analysts polled by Reuters had expected non-farm payrolls to rise 513,000.
If carbon prices renew their upward trend, there may be some profit-taking, as sellers seem to be waiting for higher prices fueled by underlying bullish sentiment, said analysts at IDEAcarbon.
"We may see a breakout above 15.50 euros," said on Friday in a note, adding that the next resistance level would be at 15.83 euros.
Germany is debating legislation which could extend the use of nuclear power which could push the market higher as the German power sector has the largest demand for EUAs.
German Calendar 2011 baseload power on the EEX was 97 cents or 1.85 percent higher at 53.50 euros per megawatt hour. U.S. oil slipped on Friday below $73 a barrel.
Citigroup’s director of environmental products Garth Edward resigned from the bank on Thursday, he told Reuters on Friday.
4.1. Bioenergy: a carbon accounting time bomb
BirdLife International, EEB and T&E invite you to the launch of the study ‘Bioenergy: a carbon accounting time bomb’
The event will take place on June 29, from 2 to 4.30pm in the European Parliament – Paul-Henri Spaak P7C050, and is kindly sponsored by Theodoros Skylakakis MEP, Kathleen Van Brempt MEP and Bas Eickhout MEP.
The European Union (EU) established a 20% target for renewable energy use in 2020 and a 10% target for renewables in the transport sector to be reached
by 2020. Bioenergy, including solid biomass and waste, is expected to represent 60% of the EU’s renewable energy use and biofuels most of the 10% of renewable energy use in transport. Widely perceived as carbon neutral, new studies commissioned by BirdLife International, the European Environmental Bureau and
Transport and Environment, suggest that these policies could be increasing emissions compared to fossil fuels. The results of these studies and their political implications will be presented and discussed at the European Parliament during the event.
RSVP to [email protected]
or call 0032 2 230 50 97
If you need a pass to enter the Parliament, please provide us with first and last name, date and place of birth, nationality and ID/Passport number at the latest by June 17.
4.2. "Towards a European Energy Community for the 21st. Century?"
European Parliament and the Spanish Parliament (Cortes Generales) organise a JPM entitled "Towards a European Energy Community for the 21st. Century?". It will take place in the European Parliament in Brussels on 7 and 8 June 2010. The meeting will be co-chaired by Jerzy Buzek, President of the European Parliament, José Bono, Speaker of the Spanish Congress of Deputies, and Javier Rojo, Speaker of the Spanish Senate.
On the first day of the JPM two emminent academics, Mr Marc van der Woude and Ms Leigh Hancher, are expected to make a presentation based on their report entitled "Towards a European Energy Community: A Policy Proposal". A debate will then follow. In their report the two authors plead, among others, for a well-functioning liquid European energy market supported by state of the art integrated networks, corrected by price stabilisation measures and complemented by innovation policies.
Subsequently the participants will be split into three Working Groups dealing respectively with energy security, the establishment of an energy single market and new and renewable energies. On the second day of the JPM the reports, which the three Working Groups will have drafted, will be presented in plenary session.
The creation of a European Energy Community is close to President Buzek’s heart. On 5 May he and the former EC President, Jacques Delors, adopted a Declaration on this issue.
More at: http://www.europarl.europa.eu/webnp/cms/lang/en/pid/1354;jsessionid=185FBAEA1B43817E7893DF1D66DB4C65
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