Green News – Page 8 – GHG Accounting

More than 100 of the World’s Leading Companies Call for a Clear Price on Carbon

Shell, Unilever and more than 100 of the world’s largest companies recently released a statement calling upon lawmakers around the world to put a “clear, transparent and unambiguous price” on carbon emissions in order to address the climate challenge and help manage the business risk associated with climate change. The statement (available online), which is due to be presented to European Commissioner for Climate Action Connie Hedegaard in Brussels, calls for clarity to open channels for investment in infrastructure projects and its authors explain that in many cases, companies do not consider goals to cut greenhouse gas (GHG) emissions. The letter notes a key lesson from existing carbon pricing systems – without a sufficient carbon price signal, companies will have no incentive to invest in low-carbon projects or technology.

A price on carbon emissions must be core to policy objectives in order for the business community to deliver substantial GHG emission reductions and help the world meet the UN goal of containing the global temperature increase to two degrees Celsius. According to the International Energy Agency (IEA), almost 80% of the emissions allowable by 2035 under a two-degree scenario are already locked in because of future GHG emissions from existing power plants, factories and buildings. By 2017, all the allowable emissions will be locked in if no action is taken, the IEA said.

The letter was coordinated by Prince Charles’s Corporate Leaders Group on Climate Change, a group of companies brought together by Prince Charles and managed by the University of Cambridge. Other signatories include Bullfrog Power, Vattenfal, Alstom, Acciona, Skanska and Aviva.

The statement comes at an opportune time as Climate envoys from more than 190 nations are gathering in Doha from November 26 to December 7, 2012 for UN negotiations on climate change.

Race to the Bottom: Canada ranks 58 out of 61 in new Climate Change Performance Index 2013

In the newly released Climate Change Performance Index (CCPI) 2013, Canada is ranked fourth from the bottom and slips behind USA, China and Russia. In last year’s ranking, Canada was in 54th place before Russia and China. The CCPI found that Canada still shows no intention of moving forward on climate policy, thereby leaving it as the worst performer of all western countries. This is no surprise to those familiar with Canada’s federal government’s deliberate inaction on the issue of climate change, however Canada’s policy stand continues to perplex many. The bottom three countries are Saudi Arabia, Iran and Kazakhstan, all of whom are highly dependent on oil and gas exports.

The eighth edition of the annual CCPI, which was published at the Doha climate talks on December 3, 2012 by the Climate Action Network (CAN) Europe and Germanwatch, ranks the climate protection performance of the 58 highest emitters worldwide. The first three ranks are actually empty, because no country on the list is pursuing a path that would achieve the goal of keeping the global temperature increase below 2 degree Celsius. The CCPI names Saudi Arabia, Australia, Canada and the US as the world‘s worst climate polluters; the same as in previous editions. The best international climate policy is credited to Mexico, Denmark, Switzerland and Norway, while Turkey, Japan, Canada and Iran hold the lowest places in this category.

For the first time, the index used deforestation data, which resulted in a rankings drop of countries with high forest emissions such as Brazil and Indonesia. The two biggest emitters, US and China, still rank comparably low. The US climbed up in this year’s CCPI, but partly due to decreased emissions resulting from the economic crisis and its massive exploration of shale gas. The indirect emissions of shale gas are not taken into account in the CCPI, as only energy and forest emissions are included. With a shift towards renewables and greater efficiency, the US could climb up even more. Jan Burck, one of CCPI’s authors, notes that China’s emissions levels has risen, but as its massive investments in renewable energies are expected to show an effect shortly, China’s emissions trend could slow down in the near future and lead to better results. The Climate Change Performance Index 2013 country table can be found here.

California Holds Successful First Auction of Carbon Allowances

The California Air Resources Board (CARB) held its first auction on November 14, 2012 for the purchase and sale of carbon allowances for its planned cap-and-trade regime. Mary Nichols, chairman of CARB, declared the auction a success:

“The auction was a success and an important milestone for California as a leader in the global clean tech market. By putting a price on carbon, we can break our unhealthy dependence on fossil fuels and move at full speed toward a clean energy future. That means new jobs, cleaner water and air – and a working model for other states, and the nation, to use as we gear up to fight climate change and make our economy more competitive and resilient.”

The auction results were released to the public on November 19^th (available online) . A tonne of carbon for the 2013 vintage year sold for $10.09, which is slightly above the $10.00 price floor set by CARB. The highest bid was a whopping $91.13. Also, there was three times the number of bidders at the auction than actual buyers, indicating a healthy and competitive market. Furthermore, 97% of allowances were purchased by regulated entities indicating that prices were not influenced by speculative buyers. Instead, it seems to indicate that regulated entities are looking to retire allowances for compliance purposes. Perhaps most importantly, the auction sold out with all 23,126,110 2013 vintage year allowances being purchased, raising approximately US$233 million. This auction kicks off the largest carbon market in North America and the second largest in the world, behind the European Union Emissions Trading Scheme.

California’s partners in the Western Climate Initiative (WCI) – including British Columbia, Manitoba, Ontario, and Québec – are no doubt paying close attention. Apart from Québec, which will launch its emissions trading system on January 1, 2013 with California, the success of California’s cap-and-trade program may spur the other WCI partners into action to implement a similar scheme.

California to hold First Auction of GHG Emission Allowances on November 14, 2012

Bill AB 32 requires California to reduce greenhouse gas emissions to 1990 levels by 2020. The cap and trade regulation (“Regulation”) is a key element of California’s climate plan. The Regulation is designed to provide regulated entities with the flexibility to seek out and implement the lowest cost options to reduce emissions. California’s cap and trade program will be second in size only to the European Union’s Emissions Trading System based on the amount of emissions covered. In addition to driving emission cuts in the ninth largest economy in the world, California’s program will provide critical experience in how an economy-wide cap and- trade system can function in the United States.

It is anticipated that California’s emissions trading system will reduce greenhouse gas emissions from regulated entities by more than 16% between 2013 and 2020. Starting on January 1, 2013, the Regulation will apply to large electric power plants and large industrial plants. In 2015, it will extend to fuel distributors (including distributors of heating and transportation fuels). At that stage, the program will encompass around 360 businesses throughout California and nearly 85% of the state’s total greenhouse gas emissions.

Under a cap and trade system, companies must hold enough emission allowances to cover their emissions, and are free to buy and sell allowances on the open market. As part of the cap and trade program, the California Air Resources Board (ARB) will hold allowance auctions to allow market participants to acquire allowances directly from ARB. ARB will conduct the first auction on November 14, 2012 from 10am to 1pm PST. ARB will also conduct the first quarterly reserve sale on March 8, 2013. Auction participants will have to apply to participate in an auction, or submit a bid for reserve sales, and meet financial regulatory requirements in order to participate in an auction or reserve sale.

The November 14^th auction will mark the beginning of the first greenhouse gas cap and trade program in the United States since the Regional Greenhouse Gas Initiative (RGGI), a cap and trade program for power plants in nine northeastern US states, held its first auction in 2008.

California covered entities, opt-in covered entities, and voluntarily associated entities are eligible to participate in the November 2012 GHG allowance auction. Approved offset registries, verification bodies, and offset verifiers are not eligible to participate in auctions as they are not allowed to hold compliance instruments under the Regulation. Prior to participating in an auction, the Primary Account Representative (PAR) and Alternate Account Representative (AAR) that will be authorized to bid on behalf of entities eligible to participate in the auction must be approved users in the Compliance Instrument Tracking System Service (CITSS) and the entity must have an entity account in the CITSS.

The detailed auction requirements and instructions are available online

EU and Australia Agree to Link Carbon Trading Schemes

On August 28, 2012, the European Union (EU) and Australia announced their agreement to fully link their respective cap-and-trade schemes by 2018. In addition, Australia announced that it will drop its planned A$15 per tonne carbon credit floor price and it will limit the use of Kyoto Protocol eligible international units under the Australian scheme. Furthermore, Australia will set its price ceiling with reference to the expected 2015-16 price of European allowances. The combined effect is that cheaper EU carbon credits will be available for Australian emitters.

Under the arrangement, the European Commission will seek a mandate to negotiate a treaty on behalf of the EU by mid-2015 for the full linking of the emission trading systems from July 2018; the Australian Government has an existing mandate to negotiate such a treaty. As an interim arrangement, a partial link will be established to allow Australian businesses to source 50% of their emission allowances from the EU from July 2015. A similar allowance will be available for European emitters once the full link comes into effect no later than July 2018.

This is a welcome development for the EU trading scheme. Oversupply has driven the cost of carbon credits to record lows; currently, EU carbon trades at around US$10 per tonne. The opening of the market to Australian companies should help to alleviate this oversupply and with a carbon tax of A$23 per tonne, Australian emitters are welcoming the integration which will offer them a cheaper alternative. However, the Australian government continues to project that carbon prices will reach A$29 per tonne by 2015 and 2016.

California Completes Successful Trial Auction for Cap-and-Trade Program

In advance of the November 2012 launch of California’s carbon trading scheme, the state’s Air Resources Board (ARB) completed in August a successful trial of its carbon allowance auction system, where companies pretended to bid for carbon allowances in order to test out the system ahead of its official launch on November 14, 2012. According to ARB officials, the trial auction ran smoothly, with approximately 150 companies submitting bids during the simulation.

Following the roll out of the platform in November, more than 400 companies will be able to buy and sell carbon credits through quarterly auctions. From 2013, a statewide cap on carbon emissions will be imposed. This cap will be gradually lowered year-on-year, thus providing companies with a financial incentive to curb their greenhouse gas emissions.

Under the planned scheme, companies will need to hold carbon allowances to cover their own emissions and they will be required to purchase additional allowances if they exceed their cap. In the first year of the scheme, the ARB plans to give away the vast majority of credits and auction only 10% in order to put a price on carbon. However, the amount of free carbon allowances will be reduced each year so that by 2020, 50% of allowances will be auctioned, providing a clear price signal for firms to invest in low emission technologies.

Copenhagen to become first Carbon Neutral Capital by 2025

On August 23, 2012 an overwhelming majority of the Copenhagen City Council adopted an ambitious climate plan for the city. The plan, entitled CPH 2025, builds on a 2009 climate plan in which the city set out to reduce its carbon dioxide emissions to 20 percent of 2005 levels by 2015 and to become carbon neutral by 2025, making it the first national capital to do so. Copenhagen already met the first target in 2011, four years ahead of schedule, despite the fact that the city’s population grew by ten percent over the same period.

CPH 2025 mirrors the climate plan set out by the Danish government to vastly reduce the country’s carbon footprint and end its reliance on fossil fuels for energy production by 2035. The city released approximately 1.9 million tonnes of carbon dioxide in 2011, a figure that would drop to 1.16 tons a year in 2025 if no new initiatives were introduced. Extensive retrofitting of buildings, reorganisation of the energy supply and changes in transport habits are some of many initiatives the City of Copenhagen will implement in order to achieve its carbon neutral goal. Some of the key targets include:

Energy consumption:

20% reduction of heat consumption.
20% reduction of commercial and 10% reduction of residential electricity consumption.
Installation of photovoltaic cells to generate 1% of 2025 Copenhagen’s electricity.

Energy production:

Carbon neutral district heating.
Electricity produced by wind and biomass will exceed the total energy consumption of Copenhagen.
Separation of commercial and residential plastic waste.
Bio-gasification of organic waste.

Transportation:

75% of overall trips in Copenhagen will be on foot, bike or public transport.
50% of school or work commuting trips will be by bike.
20% increase in public transport passengers.
Carbon neutral public transport.
20-30% of light vehicles will use renewable energy like biogas or hydrogen.
30-40% of heavy vehicles will use renewable energy.

City administration:

40% reduction of energy consumption in municipal buildings.
New municipal constructions till 2015 will meet the requirements of the 2015 classification.
New municipal constructions till 2020 will meet the requirements of the 2020 classification.
City of Copenhagen vehicles will run on electricity, hydrogen or bio-fuels
50% reduction of street lighting energy consumption.
60,000 square meters of solar panelling will be installed on municipal buildings.

CPH 2025 offers a holistic vision for the city that reduces carbon dioxide emissions by transitioning energy production away from coal and toward biomass, wind and solar energy, while also reducing energy consumption and improving energy efficiency in transport, housing, heating and industry. The plan will cost the city about 2.7 billion kroner before 2025, although additional private investments of between 20 and 25 billion kroner will be needed from the private sector in order for the city to meet its targets.

New Climate and Clean Air Coalition Moves to Reduce High-Potency GHGs

On April 24, 2012, a new international coalition – the 13-member Climate and Clean Air Coalition (CCAC) – approved its first initiatives to reduce emissions of highly potent greenhouse gases including methane, black carbon and hydrofluorocarbons (HFCs). The decision came at the CCAC’s first meeting, held in Stockholm on the sidelines of a larger ministerial meeting on sustainable development. Starting with seven members in February (US, Bangladesh, Canada, Ghana, Mexico, Sweden and the UN Environment Program), CCAC recently added six new participants (Colombia, Japan, Nigeria, Norway, the European Commission and the World Bank). Australia, Korea, UK, Finland and Denmark attended the first CCAC meeting as observers.

On methane, CCAC members agreed to look for ways to work with the oil and gas industry to reduce emissions from leaks, venting and flaring, and to work with cities to reduce landfill methane emissions. The members also agreed to reduce black carbon, or soot, emissions from diesel engines which are the leading source of global black carbon emissions. The CCAC will also seek to cut emissions from inefficient old brick kilns, which are a major source of soot in developing nations. For HFCs, the coalition will look to fund efforts to accelerate deployment of more environmentally friendly alternatives.

While such programs may be relatively small compared with broader efforts to cut global GHG emissions, they could have a significant effect as the targeted GHGs account for about 30% of current climate impacts.

Norway and Sweden today each agreed to contribute $1.5 million to the coalition’s efforts, bringing total initial funding to $16.7 million. The US is the largest source of funding, providing $12.5 million over two years.

Climate Action Reserve Board Adopts Nitrous Oxide Reduction Methodology for Synthetic Nitrogen Fertilizer Management

The Climate Action Reserve (CAR) has developed a Nitrogen Management Project Protocol (NMPP) for the agricultural sector to provide guidance on how to quantify, monitor and verify greenhouse gas (GHG) emission reductions from improving nitrogen use efficiency in crop production. The protocol was adopted by CAR in June 2012. It is available online.
Within the same field, scientists at the National Science Foundation’s (NSF) Kellogg Biological Station (KBS) Long-Term Ecological Research (LTER) are putting the finishing touches on a program called the nitrous oxide greenhouse gas reduction methodology. This program, which is being conducted in partnership with the Electric Power Research Institute, would pay farmers to apply less nitrogen fertilizer in a way that doesn’t jeopardize yields. When farmers reduce their nitrogen fertilizer use, they can use the methodology as a means of generating carbon credits. These credits can then be traded in carbon markets for financial payments. The methodology was recently approved by the American Carbon Registry and is in its final stages of validation by the Verified Carbon Standard.

In the United States, agriculture accounts for almost 70 percent of all nitrous oxide emissions linked with human activity. Nitrous oxide is one of the major gases contributing to human-induced climate change and has a lifetime in the atmosphere of more than 100 years. In addition, a molecule of nitrous oxide has more than 300 times the heat-trapping effect in the atmosphere as a molecule of carbon dioxide.

To achieve desired production levels of crops such as corn, most farmers apply synthetic nitrogen fertilizer to their fields every year. While the production of nitrous oxide through microbial activity is a natural process in soils, the large-scale application of fertilizer has greatly increased the amount of nitrous oxide in soils. Once nitrogen fertilizer hits the ground, it is hard to contain and is easily lost to groundwater, rivers, oceans and the atmosphere. Nitrogen lost to the environment from agricultural fields is nitrogen not used by crops, which costs farmers money and degrades water and air quality. Farmers already manage fertilizer to avoid large losses, but to reduce losses further it currently costs more money than the fertilizer saves.

Carbon credits provide an incentive for farmers to apply fertilizer more precisely, rather than to reduce yields. In addition to providing an economic incentive, the methodology is a tool that farmers can apply to enhance their land stewardship.

EC Launches Sustainable Urban Mobility Campaign to Fight Congestion and Pollution

The European Commission (EC) has launched its Sustainable Urban Mobility campaign, which represents a three-year initiative designed to support sustainable urban mobility campaigners in 31 countries. The central objective of the Sustainable Urban Mobility campaign is to promote the advantages of combining different modes of transportation, so its slogan invites people to “Do the Right Mix”. Activities began with the opening of a registration system to support outstanding actions that foster positive change in attitudes and behaviour. This campaign is linked to the European Mobility Week, which runs from September 16 to 22 every year and culminates in the “In Town Without My Car!” day.

A fund of EUR 500,000 is available to support actions demonstrating significant networking and multiplication effects at the local, regional and/or national, or even EU level. Individuals, non-commercial entities (schools, NGOs, public administrations, etc.) and commercial entities are eligible to apply for up to EUR 7,000 in financial support from the EC by participating in the campaign. Applicants may register their actions promoting sustainable urban mobility at http://www.dotherightmix.eu.

In addition, the campaign includes initiatives such as an award for European cities based on their sustainable urban mobility plans, coordinated awareness-raising activities and events in 31 participating countries: EU Member States, EEA Member States (Iceland, Liechtenstein and Norway) and Croatia. The campaign is managed by the Directorate-General for Mobility and Transport and funded through the Intelligent Energy Europe Programme – the EU’s support programme for non-technological actions in the field of energy efficiency and renewable energy sources.