UN Climate Talks Conclude with an Agreement on the “Doha Climate Gateway”

 
The United Nations’ annual global climate negotiations – or Conference of the Parties (COP) 18 – took place in the City of Doha, Qatar from November 26 to December 8, 2012.  As the country with the highest per capita emissions in the world at 50 tonnes per person, Qatar was an interesting choice of venue.  Negotiations ran a day over schedule, but concluded with an agreement on the “Doha Climate Gateway”.  According to the United Nations Framework Convention on Climate Change, the agreement marks the beginning of discussions on a legally binding international agreement to cap emissions at scientifically acceptable levels (restricting warming to a two degree Celsius increase in global average temperature).

At COP 17 in Durban, South Africa, the parties agreed to create a treaty by 2015 which would come into force by 2020. The objectives at COP 18 were to move the collective agreement forward at an appropriate rate to meet the 2015 deadline.  Following the talks, the parties agreed to the following:

1.       The Kyoto Protocol was officially extended for a second commitment period from January 1, 2013 to 2020. A number of previous signatories, including Canada, have withdrawn from the Kyoto Protocol, which now covers only 15% of the world’s emissions. Its primary participants are the European Union, Norway and Australia.

2.       The final text of the agreement “encourages” developed nations to pay $10 billion a year to 2020 to help developing nations access clean energy and implement climate change adaptation measures. The agreement is not legally binding and does not ascribe blame to developed nations for “loss or damages” experienced as a result of events related to climate change.

Developing countries and observers expressed disappointment with the lack of ambition in outcomes in terms of mitigation and finance by developed countries, but most agreed that the conference had paved the way for a new phase of focusing on the implementation of the outcomes from negotiations under the ad hoc working groups.

An important achievement outside of COP was that 25 members of the Climate and Clean Air Coalition agreed to significantly reduce emissions of short-lived pollutants, including soot, methane and ozone, and excluding carbon dioxide. It is estimated that this agreement could reduce the expected temperature increase by 0.5 degrees Celsius by 2050, a fraction of the four to six degrees forecast by the end of the century if we stay on the current emissions path.

COP 19 will be hosted by Poland in 2013.


 

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.


 

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 19th (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 14th 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
 

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.


 

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.


 

Québec introduces 2012-2020 Climate Change Action Plan with 63% of Funds Targeted at Transportation

 
On June 3, 2012, Québec introduced its 2012-2020 Climate Change Action Plan and the accompanying Government Strategy for Climate Change Adaptation.  Under the new action plan and strategy, nearly $2.7 billion will be invested towards the government’s climate change goals. Revenues to implement the plan, which is intended to be self-funded, are expected to come from the carbon market as well as charges on fossil fuels and combustibles which have been extended until 2014.

As the transport industry is estimated to account for 43% of all greenhouse gas (GHG) emissions in Québec, two-thirds of revenues from the action plan will fund transportation measures such as public and alternative transit, as well as inter-modality and energy efficiency in freight transport. The plan also allocates $200 million to support efforts by businesses to reduce GHG emissions through initiatives such as investing in projects related to energy efficiency, process optimization and the installation of environmentally friendly equipment. In addition, $40 million will be dedicated to support the development and marketing of new technologies.

These initiatives constitute the first phase of the 2013-2020 action plan. The second phase of the plan will be launched at the mid-point of the plan and will take into consideration the revenue generated by the carbon market and the new policy directions adopted with respect to sustainable mobility, land use planning and energy. The action plan will also evolve based on new developments in climate science, technologies and Québec’s progress in the attainment of its objectives.


 

Québec introduces amendments to draft GHG Regulations

 
To help Québec meet its emission reduction targets, the province introduced amendments to two draft GHG regulations in the June 8, 2012 edition of the Québec Official Gazette: (i) Regulation respecting mandatory reporting of certain emissions of contaminants into the atmosphere, and (ii) Regulation respecting a cap-and-trade system for greenhouse gas emission allowances.

Amendments to the Regulation respecting a cap-and-trade system for greenhouse gas emission allowances are intended to link the Quebec system with the California system as well as those of future partners such as Ontario and British Columbia. To this end, it specifies system registration admissibility conditions and necessary documents, as well as the procedure regulating emission rights trading and auctions, and provides the conditions for the delivery of offset credits, including protocols regarding certain admissible projects. Finally, amendments were made to adjust the regulation further to the adoption of Bill 89, An Act to amend the Environment Quality Act in order to reinforce compliance, by providing for administrative penalties and stronger sanctions.

The Regulation respecting mandatory reporting of certain emissions of contaminants into the atmosphere was also amended in order to complete the necessary harmonization with Western Climate Initiative (WCI) rules by adding declaration protocols. It provides, among other things, that the obligation to audit GHG emission declarations only applies to emitters subject to the GHG cap-and-trade system. In Québec, 2012 is a transition year during which regulated entities will have an opportunity to become familiar with the cap-and-trade system. The first carbon market compliance period will begin on January 1, 2013.
 

Legal Challenges Unlikely to Delay 2013 Start of California’s Cap-and-Trade Program

 

According to a panel of legal experts, it is unlikely that recent legal challenges to California’s cap-and-trade program will delay the start of compliance with the system on January 1, 2013. Speaking at the Navigating the American Carbon World conference in San Francisco on April 12, 2012, lawyers said that state regulators have done a good job in designing a system that can withstand legal challenges from regulated industries including the oil, gas and power sectors.

“Even if lawsuits are filed, I don’t think we’re going to see anything between now and the end of 2012 that will actually delay it,” said Tim O’Connor, a lawyer with the Environmental Defense Fund (EDF).  He added that: “There might be lawsuits that are continuing, but nothing that will actually derail it at December 31, 2012,” when compliance with the program begins. Other panel members agreed that it was difficult to envision a scenario where a lawsuit would knock the program completely off course.

The majority of the lawsuits filed so far against the California Air Resources Board (ARB), the state agency that designed and is implementing the program, have come from environmental groups, not industry.

A lawsuit by an environmental justice group known as the Association of Irritated Residents (AIR) last year contributed to the ARB’s decision to delay compliance with the program until 2013.

In March 2012, two employees at the Environmental Protection Agency (EPA), acting as private citizens, filed a lawsuit claiming the ARB overstepped its authority when it said offset credits could count for compliance with the system. State officials and independent legal experts at the conference said they were confident the state would prevail in that case.

One reason lawsuits from industry have yet to materialize may be because the state has designed a system that stands on firm legal ground, EDF’s O’Connor said: “I would hope that the reason we haven’t seen a lot of legal challenges so far is because there are a lot of options that have been taken off the table because of smart design and design that is in compliance with the law”.

(Sources include: Thomson Reuters Point Carbon)

 


Global Protocol for Community-scale GHG Emissions released for Public Comment

 
On March 20, 2012, the ICLEI – Local Governments for Sustainability and C40 Cities Climate Leadership Group released a draft edition of the Global Protocol for Community-Scale Greenhouse Gas Emissions (GPC) to help cities around the world measure and report GHG emissions using a consistent protocol.  Public comments on the draft GPC may be submitted until April 20, 2012 and a final version will be released on May 15 at the United Nations climate talks in Bonn. The design of the GPC is specified within the scope of the Memorandum of Understanding that was signed between ICLEI – Local Governments for Sustainability and C40 Cities Climate Leadership Group on 1 June 2011 in Sao Paulo.

The GPC is the result of a year-long collaboration between ICLEI – Local Governments for Sustainability and C40 Cities Climate Leadership Group; in June 2011, the two organizations forged an agreement to develop a standard approach for accounting and reporting GHG emissions that will boost the ability of cities to access funding and implement actions. Other organizations that participated in the development of GPC include the World Bank Group, United Nations-HABITAT, United Nations Environment Program, the Organization for Economic Cooperation and Development, and the World Resources Institute. This new collaboratively developed community protocol establishes a single minimum standard for accounting and reporting community scale greenhouse gas (GHG) emissions that can be used across multiple platforms. The GPC complements ICLEI’s programs and tools on local climate action that are being implemented globally, in particular the 2009 International Local Government GHG Emissions Analysis Protocol (IEAP) and its national supplements.

The GPC has three main components:

  • guiding principles and a policy framework to link the efforts across local and national governments and the private sector;
  • the 2012 Accounting and Reporting Standard with supplemental guidance on methodologies, and reporting templates; and
  • a roadmap for institutionalizing the process for updating the Standard on an ongoing basis.

Background

To manage emissions in an effective and transparent way, cities must measure and publicly report them.  Planning for climate action at the city level starts with developing a GHG inventory, which allows local policy makers and residents to understand which sectors drive GHG emissions in their city or community, and respond by developing action plans that address those sectors. To date, a consistent accounting and reporting guidance for cities on how to conduct community scale inventories has been lacking. Rather, competing guidance has resulted in a proliferation of protocols and inventories that cannot be easily communicated between financing institutions, local and national governments, and the private sector. The absence of a common approach prevents comparison between cities and across time, and reduces the ability of cities to demonstrate the global impact of collective local actions.

 

Harmonization of GHG accounting methodologies presents local governments with opportunities for credible reporting of climate data in a transparent, verifiable, consistent, and locally relevant way. An internationally recognized GHG accounting standard which harmonizes prevailing methodologies can help local governments to set targets, measure progress, and leverage national and international financing. The community protocol integrates seamlessly with national and corporate GHG accounting methodologies, facilitating linkages between these entities for improved coordination to reduce GHG emissions. ICLEI is also working with its partners to reflect provisions of the GPC in the GHG performance section of the carbon Cities Climate Registry (cCCR). As of February 2012, the cCCR had compiled more than 1 GtCO2/yr of community GHG emissions reported by over 160 cities worldwide.

The GPC builds upon the principles, knowledge, experiences, and practices defined in previously published city-led inventories, institutional standards, and organizational protocols. These include the International Local Government GHG Emissions Analysis Protocol (ICLEI), Draft International Standard for Determining Greenhouse Gas Emissions for Cities (UNEP/UN-HABITAT/WB), GHG Protocol Standards (WRI/WBCSD), Baseline Emissions Inventory/Monitoring Emissions Inventory methodology (EC-CoM JRC), and Local Government Operations Protocol (ICLEI-USA).

Within the context of the GPC, several challenges have been identified in efforts to account for community-scale emissions:

  1. Developing a community-scale GHG accounting and reporting standard that attributes emissions to the activities of the community.
  2. Harmonizing existing community-based GHG accounting methodologies and standardizing accounting, reporting, and the relationships of community-scale inventories with national, organizational, and global climate efforts.
  3. Advancements in GHG accounting methodologies at the community-scale are continuously evolving. An open, global protocol must therefore include a process for revising the standard to meet the inevitable improvements of tomorrow.

To address these challenges, the GPC provides a template to analyze the relationship with national and organizational GHG accounting methodologies, allocating all community activities and services that may result in GHG emissions, including inter-city emissions, to categories defined by the 2006 IPCC Guidelines and by Scope definition, to reflect varying levels of control by the community over these emissions. In addition, the GPC introduces a community-scale GHG accounting standard – referred to as the 2012 Accounting and Reporting Standard – which harmonizes GHG accounting methodologies and provides step-by-step guidance for cities on how to collect relevant data, quantify emissions, and report results using a series of summary reporting templates. Data collection for reporting is guided through use of data collection tables, providing transparency in activity data, emissions factors, and data sources. The 2012 Accounting and Reporting Standard enhances local policy development by: (i) benchmarking emissions between cities to facilitate peer-to-peer networking and sharing of best practices; (ii) allowing for consistent measurement of a community’s GHG emissions over time to evaluate various GHG abatement efforts; and (iii) facilitating climate-linked finance.

The GPC and associated processes are guided by six principles:

  1. Measurability. Data required to perform complete emissions inventories should be available; where necessary partners will work with communities to develop local capacity communities to enable for data development and collection for compliance with the 2012 Accounting Standard.
  2. Accuracy. The calculation of GHG emissions should not systematically overstate or understate actual GHG emissions.
  3. Relevance. The reported GHG emissions should reflect emissions occurring as a result of activities and consumption from within the community’s geopolitical boundaries.
  4. Completeness. All significant emissions sources included should be accounted for.
  5. Consistency. Emissions calculations should be consistent in approach.
  6. Transparency. Activity data, sources, emissions factors and accounting methodologies should be documented and disclosed/

Comments on the full document should be submitted through the feedback form template. The deadline for feedback is April 20, 2012. Feedback should be sent directly to GPC@iclei.org.