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New hope for the climate with US/China agreement?

June 12, 2013 in Climate, Economy, Policy

For immediate release

President Obama talks with President Xi in Rancho Mirage, Calif., June 7, 2013 Image:Pete Souza/ whitehouse.gov

President Obama talks with President Xi in Rancho Mirage, California. June 7, 2013
Image: Pete Souza/ whitehouse.gov

By Paul Brown

The agreement by China to phase out one of the most potent greenhouse gases hydrofluorocarbons (HFCs) has led to hopes that progress to combat climate change might finally be made.

LONDON June 12 - One of the great stumbling blocks of climate talks in the last 15 years has been that America refuses to move to cut emissions of greenhouse gases until China does – but at the weekend leaders of the world’s two great polluters reached agreement to phase out one of the most potent of them hydrofluorocarbons (HCFs).

It was heralded as a great breakthrough, and if it works it will seriously improve the chances of the world avoiding dangerous climate change. But curiously the phasing out of HCFs will be carried out under the Montreal Protocol and not the UN Framework Convention on Climate Change.

The Montreal Protocol was set up before the climate change convention to deal with a completely different threat, the hole in the ozone layer. It has always been a more successful international forum for agreement.

This is because the chemicals that were causing the problem with the ozone layer were made in a relatively few countries and by large manufacturers. As a result governments were able to control emissions quickly and directly by regulating the industry and creating deadlines to find non-harmful substitutes.

Optimism

The problem was that in solving one problem by producing substitute chemicals that did not hurt the ozone layer, another was made worse. HFCs are potent greenhouse gases, 1,000 times more so than carbon dioxide.

So the agreement to phase them out taken at the week-end, instigated by President Barack Obama and agreed by President Xi Jinping of China, will save the equivalent of two years worth of current global warming emissions. Very important is the fact that while carbon dioxide stays in the atmosphere for at least 100 years HFCs fall out of the atmosphere in a few years staving off rapid warming.

So phasing them out is extremely good news for the environment. The big question is whether this will translate into action on other greenhouse gases, particularly since this needs to be done under the Climate Change Convention and not the Montreal Protocol.

Achim Steiner, UN Under-Secretary-General and Executive Director of the UN Environment Programme (UNEP), was optimistic. The announcement, Mr. Steiner said “could signal a new and perhaps transformational chapter in international cooperation on climate change.

“Along with a variety of recent signals from several key countries including China and the United States, this one on HFCs by these two key economies is welcome as the world moves towards a universal UN treaty on climate change by 2015.”

“It is widely recognized that securing a meaningful treaty and keeping an average global temperature rise under 2 degrees C this century will require all hands on deck—what, however, must not be overlooked or sidelined is the urgency to also tackle the principal greenhouse gas, carbon dioxide, as part of negotiations underway under the UN Climate Convention.”

Six million die

This last of Mr Steiner’s points appears to be the problem. By comparison with carbon dioxide HFCs are an easier problem to solve. Even before the US/China agreement 112 countries had urged phasing them out and a group called the Consumer Goods Forum, a global network of several hundred retailers, manufacturers, service providers, and other stakeholders from over 70 countries had agreed to begin phasing out HFC refrigerants beginning in 2015.

But governments may also be able to reach agreement on other short-lived greenhouse gases, according to the Institute for Governance and Sustainable Development.

Of these the principle culprits are methane, low-level ozone, which also damages health and crops, and black carbon soot, which kills an estimated six million people a year. Methane can be captured and used as a fuel and cutting out the other two has important economic incentives as well as saving lives.

Perhaps the biggest single factor is the attitude of the new Chinese government. Despite the lack of democracy the Chinese are under pressure from the population because of the horrific effect of pollution on daily life, particularly the health of children. Unlike most of the American population the Chinese also realize that climate change is a threat to their economy as well as their health.

Come the next round of climate talks in Warsaw in November it may be China trying to persuade the Americans and reluctant parties like Brazil and India that action on carbon dioxide is needed too. – Climate News Network

Tags: China, Climate negotiations, emissions, Greenhouse gases, Hydrofluorocarbons, Ozone hole, USA Comments Off

by alex kirby

Fossil fuels ‘risk being wasted assets’

April 19, 2013 in Economy

EMBARGOED until 2301 GMT on Thursday 18 April

Sunset industry? Most fossil fuel reserves may prove wasted assets
Image: Arne Hückelheim

By Alex Kirby

Investors should beware of backing companies involved in the exploitation of fossil fuels, analysts say – because climate change means there is a strong risk they will be wasted assets which will have to be left in the ground.

LONDON, 19 April – The first problem is this: most climate scientists agree that we cannot afford to burn the huge reserves of fossil fuel we have if we want any chance of preventing global average temperatures rising by more than 2°C.

The second problem: last year the world spent $674 billion finding and developing more fossil fuel.

If this continues unabated for ten more years, a report by an influential group of economists and scientists says, there will be a third problem: economies will have wasted more than $6 trillion of capital in pursuit of assets which are literally unburnable (and legally so too, if there are internationally agreed limits on fossil fuel emissions by 2023).

The research is published in a report, Unburnable Carbon: Avoiding wasted capital and stranded assets, produced by the Carbon Tracker Initiative and the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.

The report says 60-80% of coal, oil and gas reserves of publicly listed companies could be classified as unburnable if the world is to cut emissions with an 80% probability of not exceeding global warming of 2°C.

This is a widely accepted limit aimed at avoiding dangerous climate change, though many scientists and some policy-makers now believe there is little chance of staying below it.

The research says the 200 listed companies analysed in the study own 762 billion tonnes of carbon dioxide (CO2) through their reserves of coal, oil and gas. This supports share value of $4 trillion and services of $1.5 trillion in outstanding corporate debt.

“Smart investors can already see that most fossil fuel reserves are essentially unburnable”

To cut greenhouse emissions so as to have an 80% chance of achieving the 2°C target, the fossil fuel reserves of these companies would probably be able to emit no more than about 125–275 billion tonnes of CO2 – around a quarter of the reserves they own.

Some policy-makers pin their hopes on carbon capture and storage (CCS), a technology still to be proven to work commercially. But the report says most of the companies’ reserves will remain unburnable unless there is a dramatic development of CCS.

It concludes that even a less ambitious goal, like a 3°C rise in average global temperature or more, which would pose significantly greater risks for the world and its economy, would still imply significant constraints on the use of fossil fuel reserves between now and 2050.

Yet companies in the oil, gas and coal sectors are seeking to develop further resources which could double the level of potential CO2 emissions to 1,541 billion tonnes.

The authors say current extractives sector business models are based on assumptions that there are no emissions limits, a strategy incompatible with a carbon-constrained economy.

The study says financial regulators should require companies to disclose the potential CO2 emissions that are embedded in fossil fuel reserves.

Finance ministers should initiate an international process to incorporate climate change into the assessment and management of systemic risk in capital markets.

And investors should challenge the strategies of companies which are using shareholder funds to develop high-cost fossil fuel projects.

“Start deflating the carbon bubble before it pops… Jump, before you are pushed.”

The authors say the report raises serious questions about the ability of the financial system to act on industry-wide long term risk, since currently the only measure of risk is performance against industry benchmarks.

Professor Lord Stern, author of the Stern Review Report on the Economics of Climate Change and chair of the Grantham Research Institute, said: “Smart investors can already see that most fossil fuel reserves are essentially unburnable… They can see that investing in companies that rely solely or heavily on constantly replenishing reserves of fossil fuels is becoming a very risky decision.

“But I hope this report will mean that regulators also take note, because much of the embedded risk from these potentially toxic carbon assets is not openly recognized through current reporting requirements.”

Jeremy Leggett of Carbon Tracker said: “The pooled message to regulators is clear. Do your job. Start requiring recognition of stranded carbon-asset risk in capital-markets processes. Start deflating the carbon bubble before it pops.

“The message to all the players across the financial chain… is also obvious. If the regulators won’t do their job, do it for them. Jump, before you are pushed.”

ShareAction (formerly Fair Pensions) has launched an online tool for pension savers to urge their funds to address the dangers of a global carbon bubble. – Climate News Network

Tags: emissions, fossil fuels, Investments, Stern Review Comments Off

by alex kirby

Climate will harm Mekong Basin harvests

March 29, 2013 in Economy

EMBARGOED until 0001 GMT on Friday 29 March

The fertility of the region around the Mekong will suffer
Image: Thomas Schoch

By Alex Kirby

Within 40 years densely-populated south east Asia, whose agricultural exports also feed many millions beyond its borders, will be experiencing the full impacts of climate change, a study says.

LONDON, 29 March – One of the most fertile areas of south east Asia, the Lower Mekong Basin, faces a bleak future from the impacts of climate change, according to a US-funded study.

The lead author of the study, Dr Jeremy Carew-Reid, says some of its findings are “very shocking”.

Hotter and wetter rainy seasons and more long-lasting dry seasons in Cambodia, Laos, Thailand and Vietnam will jeopardise the region’s reputation as one of the world’s major producers of crops on which hundreds of millions depend. Climate change will also have a profound economic impact in the region.

“We’ve found that this region is going to experience climate extremes in temperature and rainfall beyond anything that we expected”, says Dr Carew-Reid.

The Basin is known for its production of maize and rice, the two grains with the highest worldwide production levels. Rice provides more than a fifth of the calories consumed by humans. The study forecasts fundamental shifts in the kinds of crops that can be grown in parts of the Basin.

The USAID-funded Climate Change Adaptation and Impact Study for the Lower Mekong examines how changes in temperature and precipitation will affect growing conditions and yields for major crops including not only maize and rice but rubber, cassava, soya and coffee, and how fisheries and livestock productivity will be affected.

There’s general international agreement that global average temperatures should if possible be prevented from rising more than 2°C above their pre-industrial level, although most climate scientists believe it’s now too late to stop temperatures rising further.

A global average rise of 2°C is expected to mean that parts of the tropics like the Mekong Basin will warm by between 4°C and 6°C by mid-century. The impacts will vary, but all the Lower Mekong countries are likely to see big changes in the suitability of land for important crops.

Protein source at risk

The study expects higher temperatures and more rainfall to decrease the feasibility of growing rain-fed rice in the lowlands of Thailand’s northern Chiang Rai Province but to increase yields in the north eastern province of Sakon Nakhon.

More rain in Cambodia is likely to reduce cassava and rubber yields in the Kampong Thom and Mondul Kiri regions, while temperature and rainfall increases will result in coffee in Laos having to be cultivated at higher altitudes.

Hotter and wetter weather will alter the Central Highlands in Vietnam, making the area more suitable for rubber but less so for maize and coffee.

The study also identifies “hot spot” provinces in the Basin where the impact of these changes is expected to have severe effects on food security and livelihoods.

The results of the study will help with the monitoring of how and when the “comfort zones” of key crops – areas where temperature, rainfall and soil conditions create the right conditions for production – will move. The ability to continue existing crop production in these zones is expected to decline.

For fisheries and livestock the impacts of a changing climate may also be serious (fisheries are a key source of protein in the Basin). Feed typically accounts for 65-80% of livestock production costs, so climate impacts on crops like maize and cassava will also damage livestock farmers.

In Vietnam, heat stress may limit the farming of freshwater prawns and flash floods could cause sudden drops in salinity, with disease spreading into coastal shrimp ponds.

International impact

The impacts on agriculture will be accompanied by damage to the natural world, with more plant and animal populations and species likely to be lost to extreme temperatures and dry spells.

The study stresses that climate change is not about the environment alone. The countries of the Lower Mekong Basin are major food exporters, and a warming climate will affect every economy in the region.

“Adaptation to climate change does not just mean shifting from one crop to another”, says Paul Hartman, director of the Bangkok-based Mekong Adaptation and Resilience to Climate Change (Mekong ARCC) project, the body responsible for the study. “It also means being aware of potential changes, looking out for warning signs that these changes are beginning to occur, and being prepared to respond.”

In another sign of concern at the implications of climate change for south east Asia, a senior US military figure identified it earlier this month as a priority issue.

Admiral Samuel Locklear, who heads the US Pacific Command, said significant upheaval related to the warming planet “is probably the most likely thing that is going to happen… that will cripple the security environment, probably more likely than the other scenarios we all often talk about.’’

The Boston Globe reported him as saying: “We have interjected into our multilateral dialogue – even with China and India – the imperative to kind of get military capabilities aligned [for] when the effects of climate change start to impact these massive populations.

“If it goes bad, you could have hundreds of thousands or millions of people displaced and then security will start to crumble pretty quickly.’’ – Climate News Network

Tags: Agriculture, Impacts, Mekong, Rice Comments Off

by alex kirby

Asia cuts its carbon faster than Europe

March 25, 2013 in Economy

FOR IMMEDIATE RELEASE

Growing numbers of cargo flights have not helped the US record
Image: NASA

By Alex Kirby

Producing more goods and services while emitting less carbon is the dream of many economists. In the race to see which countries can best manage to do this, East Asia is stealing a march on the US and Europe. And contrary to popular conceptions, China is now making faster progress than Germany and the United Kingdom towards competitiveness in tomorrow’s low-carbon world.

LONDON, 25 March – When it comes to prowess in moving towards a low-carbon economy, some countries in Asia are increasingly outpacing Europe and the United States, a new report shows.

Three of the top G20 countries best placed to compete in the global low-carbon economy are now from East Asia, having overtaken their European and American competitors, according to an index which measures how carbon-competitive countries are.

The report, the Climate Institute/GE Low-Carbon Competitiveness Index, published by the Climate Institute, was first released in 2009. This year’s edition relies on data from 2010.

In that year France, the UK and Germany were placed first, third and fifth. Today France is still in first place (thanks largely to its heavy reliance on nuclear power to generate electricity) but the UK has slipped down while Germany, sixth, is out of the top group.

Meanwhile China leapt ahead of its previous placing, and South Korea and Japan continued their strong performance. China is now third, up from seventh.

This is despite China now having supplanted the US as the world’s biggest emitter of greenhouse gases. Though China’s growth in renewables is impressive, its power sector still relies overwhelmingly on coal, with construction of coal-fired power stations continuing at breakneck pace: the country now accounts for nearly 50% of global coal consumption.

The Index measures carbon competitiveness by examining 19 indicators in three areas: sectoral composition (a historical snapshot of the current economy, for example transport and trade emissions intensity); early preparedness (like investment in clean energy and growth in emissions); and future prosperity (e.g. investment in education and infrastructure).

It includes indicators such as industrial efficiency, financial flows into clean-energy production, carbon intensity of trade, and natural-capital depletion.

“Asia, particularly China, is building the capability to prosper in the inevitable low-carbon and clean energy future”, said John Connor, CEO of the Climate Institute, based in Sydney, Australia.

“China’s dramatic improvement is due to its growing investment in clean energy coupled with growing high-tech exports. In 2010 alone, China hosted just under half of total global public equity investment in clean energy.”

Connor added: “Leaders in the global low-carbon economy are those countries which have recognised the inextricable link between economic growth, resource security and climate change and are acting accordingly.

“Despite the economic downturn, a number of EU countries have managed to hold on to their relatively good position to compete in the global low-carbon economy. However, Asian countries, particularly China, are beginning to threaten the EU’s position as a low-carbon leader.”

“Our future world will be one in which the right to produce emissions will become a scarce and valuable resource…”

The report makes it clear that countries which fail to limit carbon emissions and simply pursue economic progress regardless of the pollution they cause risk being left behind, economically and diplomatically as well.

Key findings from the Low-Carbon Competitiveness Index show that the top five countries are France, Japan, China, South Korea and the UK (in descending order).

China has moved from seventh place to third. Germany dropped out of the top five and is now sixth because of decreased investment in clean energy.

The report says the most dramatic decline in performance was achieved by the United States, now down from eighth to eleventh. It says this is mainly because of decreased investment in clean energy, a falling share of high-tech exports, decreased investment in physical capital and growing emissions-intensive air freight.

A blogger on the website China Dialogue wrote in May 2012: “Our future world will be one in which the right to produce emissions will become a scarce and valuable resource, just like minerals, fertile soil, water, financial capital and skilled workers. Countries with higher levels of carbon productivity will be better-placed to provide material prosperity to their residents.

“How each nation adapts to a carbon-constrained world will, to an extent, determine its future economic competitiveness and ability to create prosperity for its residents. Economies that can generate more wealth with less carbon will be the low-carbon winners.” – Climate News Network

Tags: Carbon intensity, East Asia Comments Off

by Jan Rocha

How Beijing is shaping the Amazon

February 21, 2013 in Economy

EMBARGOED until 0001 GMT on Thursday 21 February

The Amazon – losing its trees too fast Image: NASA

By Jan Rocha

China has now replaced the US and Europe as Brazil’s main trading partner. a position which gives it significant influence over what happens in the Amazon forest – and over attempts to protect it. Climate News Network’s Brazil correspondent reports:

SAO PAULO, 20 February – When I arrived in the Amazon in the 60s, there were no roads. The rivers were the highways, crowded with boats of all shapes and sizes.

You travelled on what was available, be it a trading boat, stopping at riverside villages for fishermen to carry aboard giant pirarucu (one of the world’s largest freshwater fish, reaching up to two metres in length), or a precarious canoe powered by an outboard motor, getting soaked in sudden downpours.

I slung my hammock in passenger boats and slept to the sound of the thump-thump-thump of the engines, or in cattle boats, kept awake by the restless shuffle of cows on the way to the slaughterhouse. Once I got a lift on a missionary boat which stopped at a lonely shack for a nervous young priest to give the last rites to a dying man.

Occasionally we would be rocked in the wake of the big Booth Line steamers chugging their way a thousand miles upriver to Manaus after crossing the Atlantic from Liverpool.

In the 70s the military, who had taken power, decided that the vast Amazon region must be “integrated” with the rest of the country, which had developed along the coast, to stop foreign powers occupying it to exploit its natural resources.

They began building roads and moving in Brazilians from other regions to populate what they called an “empty” region, ignoring the existing population of indigenous peoples and descendants of the tappers who had migrated there during the turn of the century rubber boom.

Huge forest loss

Roads now link the Amazon region to the rest of the country, but ironically they have facilitated the penetration of foreign companies into every corner of the rainforest, as well as cattle ranchers, soy farmers, loggers and mineral companies from the more developed parts of Brazil. Almost 20% of the rainforest has been destroyed since the roads came.

The Amazon basin is now China’s No.1 supplier of natural resources, replacing its Asian neighbours as their resources have become depleted. In a relatively short time, China has become Brazil’s major trading partner, overtaking the US and Europe.

But China’s voracious demand for iron ore and timber, as well as soy and beef, is not only fuelling deforestation but negatively influencing Brazil’s environmental protection laws, in the view of researchers.

In a 2012 paper entitled Amazonian forest loss and the long reach of China’s Influence¹, the authors found that “the rapid rise in exports of soy and beef products to China are two of the major drivers of Amazonian deforestation in Brazil”.

The paper further argues that Chinese purchases of agricultural and forest land and Chinese imports of commodities such as timber and aluminium also cause environmental impacts in the Amazon.

Chinese financing and investment in Amazonian infrastructure such as railways and mineral processing facilities have additional impacts. The authors say the “direct impact of commodity exports is only the tip of the iceberg of Chinese influence on Amazonia.”

“Money earned from this trade is strengthening Brazilian agribusiness interests, with profound effects on domestic politics that are reflected in legislative and administrative changes, weakening environmental protection”.

This refers to the recent successful attempt by the agribusiness lobby in the Brazilian Congress to weaken the existing Forest Code, which, although often flouted, has still played an important role in conserving rainforest, rivers and biodiversity.

“Impacts can also be expected from Chinese financing under negotiation for infrastructure such as a railway linking the state of Mato Grosso to a port on the Amazon river”, the authors write.

A bridge too far – cutting through the Amazon Image: Robert Middleton

“Mato Grosso, an Amazonian state twice the size of the US state of California, is a major focus of expansion of soy, cotton and intensified cattle production. Chinese purchases of land for agriculture and timber imply an increasing direct role in commodity production.

“Other impacts come from exports from mining and from the processing of minerals, especially the demands for charcoal for pig-iron smelters and for electricity from hydroelectric dams for aluminium smelters”.

They say Chinese demand for aluminium, an electricity-intensive industry, “contributes to Brazil’s push for a massive increase in building hydroelectric dams in Amazonia over the next decade.”

“Brazil’s 2011–2020 ten-year energy-expansion plan (Ministry of Mines and Energy, 2011) calls for 30 large dams to be built in the Legal Amazon [the greater Amazon basin] by 2020, a rate of one dam every four months.

“The Chinese-Brazilian alumina plant will be an important beneficiary of the Belo Monte dam, now under construction on the Xingu River, with transmission lines planned to connect Barcarena (where the plant is located) directly to the dam near Altamira, Para.”

Belo Monte has environmental and social impacts that extend far beyond the areas that will be directly flooded, and the dam is likely to justify much larger upstream reservoirs to regulate the river’s flow, according to an earlier study by Fearnside in 2006.

He also concluded from other studies that “the dam has functioned as a ‘spearhead’ in creating precedents that weaken Brazil’s environmental licensing system and prepare the way for the many dams proposed under the energy-expansion plan” and that “the influence of both Brazil and China in expanding carbon credit for hydroelectric projects under the Kyoto Protocol’s Clean Development Mechanism has further increased the profitability of dams”.

“It should therefore not come as a surprise that China exerts multiple influences on events in Brazil, often to the detriment of the Amazon forest”, concludes the 2012 paper.

Exploit a cow, save a tree

It notes that Brazil’s boom in agricultural commodities, which earned US$85 billion in 2011, has contributed hugely to the country’s recent economic growth and has reduced its vulnerability to external economic crises.

Meanwhile a recent study produced by Imazon (Amazon Institute of People and The Environment), a well-respected research institute based in Belem, has shown that deforestation could be drastically reduced by increasing productivity.

Traditionally, Amazon cattle farmers have never bothered about productivity, because it has been so easy just to clear more forest. The Imazon study shows that future projected demand could be entirely met without the need to cut down a single tree, if productivity was increased from the present average of 80 kilos of beef per hectare to 300 kilos.

To help farmers learn the new techniques, Imazon suggests that an annual investment of about US$500 million would be enough to pay for technical assistance, reference centres for each region, and model farms to demonstrate good practice. Credit could then be linked to performance.

Imazon points out that if nothing is done to increase productivity a further area of almost 13 million hectares will be cleared to meet demand, leading to an annual deforestation rate three to four times greater than the Government’s target of no more than 380,000 hectares a year until 2020.

Traditionally the Government has relied on applying hefty fines for illegal clearing. This has two big disadvantages: the deforestation is detected only when it has already happened, and because of Brazil`s complex and lengthy judicial process, the fines are almost never paid. In addition, the powerful farmers` lobby in Congress is adept at voting through “amnesties” at regular intervals to pardon unpaid fines.

Now a more intelligent way to inhibit deforestation has been found, this time by the Central Bank. A bank resolution, passed in 2008, compels farmers to prove they are in compliance with environmental laws before they can obtain credit from any official bank.

A study by the Nucleus for the Evaluation of Climate Policies of Rio de Janeiro’s Catholic University, PUC, found that, as a result, between 2008 and 2011 a total of 2,700 sq kms was saved from deforestation, because the farmers, deprived of capital, lacked the funding to extend their activities. The study found the correlation between credit and deforestation was stronger in cattle raising.

The Government recently celebrated new statistics showing a reduction in deforestation, but as these various studies show, there are many variables involved. If China maintains or increases its demand for the natural resources of the Amazon and for the commodities produced in surrounding areas, the threat to the rainforest will continue. – Climate News Network

¹Philip M. Fearnside, Adriano M. R. Figueiredo and Sandra C. M. Bonjour

Tags: Brazil, China, Deforestation, Trade Comments Off

by alex kirby

World Bank head: Climate change hurts the economy

February 17, 2013 in Economy

EMBARGOED until 0001 GMT on Sunday 17 February

Snow in Moscow, November 2012 Image: Petr Magera

By Alex Kirby

The World Bank head has told leading finance ministers that climate change is not a distant threat, but a threat that has real economic consequences today.

LONDON, 17 February – The president of the World Bank says global warming is a real risk to the planet and is already affecting the world’s economy.

Speaking to the G20 finance ministers at their meeting in Moscow the president, Dr Jim Yong Kim, urged governments to “tackle the serious challenges presented by climate change. These are not just risks. They represent real consequences.”

Dr Kim said failing to tackle these challenges risked “serious consequences for the economic outlook… Damages and losses from natural disasters have more than tripled over the past 30 years,” he said. “Years of development efforts are often wiped out in days or even minutes,” and climate change was “a very real and present danger”.

Dr Kim said issues around climate change “do not typically come before finance ministers and central bank governors. This, I firmly believe, is a mistake. And to underscore my point, we need to look no farther than what is happening in our host country.

“This winter, for instance, Moscow has had record snowfalls. Climate scientists tell us that as the Earth warms up we will have more and more bursts of precipitation and other periods of extreme weather.

“Just two-and-a-half years ago, an extreme heat wave in Russia led to 55,000 deaths. So the people of Russia have experienced two once-in-a-lifetime extreme weather events in the last few years, one hot, one cold. We’re not talking about a risk that is 50 years away. We’re talking about risks that are here today.

“No country – rich or poor – is immune from the impacts of climate-related disasters. In Thailand, for example, the 2011 floods resulted in losses of approximately $45 billion, or about 13% of GDP…

“At the World Bank Group we are stepping up our mitigation, adaptation and disaster risk management work. I would welcome more attention from the G20 on what we need to do to face climate change…”

Matching words with deeds

Dr Kim’s words will be welcomed by many people concerned at the mounting evidence of climate change to which he refers.

Last November a Bank report said that the world was “on track to a 4˚C temperature increase by 2100, marked by extreme heat waves and life-threatening sea-level rise”.

“A 4˚C warmer world can, and must be, avoided – we need to hold warming below 2˚C,” said Dr Kim at the time. “Lack of action on climate change threatens to make the world our children inherit a completely different world than we are living in today.”

But the Bank is criticised for failing to match its words with action. The website of the UK development charity Christian Aid, for example, says: “The World Bank was set up to tackle global poverty.

“Yet, in the last five years, its funding for fossil-fuel power stations has risen 40-fold, heightening the threat of climate change that is already derailing development.”

A Christian Aid spokeswoman told the Climate News Network: “We’re pleased to hear the Bank acknowledge the risk that global warming poses, but we remain troubled by what it spends on fossil fuel power. We would like it to reflect its concern about climate change in the types of infrastructure it lends to.”

The Bank Information Center is an NGO which works in developing countries and those with economies in transition to influence the World Bank and other international financial institutions to promote social and economic justice and ecological sustainability.

Last month it expressed its “concern” that the Bank was considering providing US$58 million in support for a new 600- megawatt lignite coal-based power plant in Kosovo and expanding open-cast coal mining there. – Climate News Network

Tags: fossil fuels, G20, World Bank Comments Off

by alex kirby

Fossil fuels ‘may prove worthless’

February 15, 2013 in Economy

EMBARGOED until 0001 GMT on Friday 15 February

Some fossil fuel will have to be left underground Image: Richard Croft

By Alex Kirby

A leading UK university is launching a research programme to help businesses and policy-makers to protect themselves from investments which could be left worthless by climate change.

LONDON, 15 February – The University of Oxford has begun a programme of research to identify high-carbon sectors and assets that could be devalued or written off if the world takes resolute action to limit emissions of greenhouse gases.

It seeks to help investors to avoid sinking money in potentially useless assets that might ultimately lose their entire value, turning into what are known as “stranded assets”.

Assets become stranded if they are replaced by greener alternatives or new technologies, or are subject to new regulations or resource constraints.

In 2012 the International Energy Agency said the world was on course for average temperature rises of at least 4°C, double the limit agreed by world governments. So, it said, a significant part of the world’s known fossil fuel stores would have to stay in the ground to fulfil international climate commitments and reduce dangerous impacts.

The Potsdam Institute for Climate Impact Research has calculated that to reduce the chance of exceeding 2°C warming to 20%, the global carbon budget for 2000-50 is 886 gigatonnes of CO2. Discounting emissions from the first decade of this century leaves a budget of 565 gigatonnes for the remaining 40 years to mid-century.

However, the known fossil fuel reserves declared by energy and mining companies is equivalent to 2,795 gigatonnes of CO2. If the world wants to keep climate change to below 2°C, then, 80% of those reserves can never be burned: they are in fact valueless.

According to the Carbon Tracker Initiative, “this means that governments and global markets are currently treating as assets reserves equivalent to nearly five times the carbon budget for the next 40 years. The investment consequences of using only 20% of these reserves have not yet been assessed.’’

Safer homes for funds

Asset stranding is currently little understood, but the implications are potentially very significant. It could have a direct effect on millions of small savers too, as many universities and pension funds have big investments in hydrocarbon companies (and see our story on 1 February).

The researchers, from Oxford’s Smith School of Enterprise and the Environment, will try to find out which assets and sectors are most at risk and how to respond to the challenges.

The former MP John Gummer, now Lord Deben, chairs the Committee on Climate Change, an independent group which advises the UK Government. Speaking at the School, he stressed the need for businesses and policy makers to adapt to the new economic landscape.

He said: “Investors continue to deploy hundreds of billions of pounds into polluting and unsustainable sectors. In many cases these investments will not be worth what investors think.

“Climate change, scarcer resources and new disruptive technologies will reduce value and strand assets. If investors better understand the risks of investing in these assets they will be attracted to greener alternatives and see them as better business propositions and safer places for their funds.”

Professor Gordon Clark, director of the Smith School, said: “We are looking at how changes in regulation, pricing, technology, society and climate could be a risk to a range of polluting assets.. Our new programme is creating a critically important space for these issues to be understood and for appropriate responses to be developed.”

The four-year research programme’s first project is to focus on the international supply chain for the agricultural sector, examining methods of transport and production. Later projects will probably include transport, power generation, real estate and a range of commodities.

The researchers aim to create new tools to understand and manage the risks of asset stranding. They will also analyse investor portfolios to learn about risk exposures and will compile case studies of best practice.

The programme is being supported by Aviva Investors, Bunge Ltd, Climate Change Capital Ltd and HSBC Holdings plc, with non-financial partners including the Carbon Tracker Initiative, Trucost and WWF-UK. – Climate News Network

Tags: fossil fuels, Investments, Stranded assets Comments Off

by Paul Brown

Europe’s climate forecast: unsettling

February 1, 2013 in Economy

EMBARGOED until 0001 GMT on Friday 1 February

By Paul Brown

Climate change will mean winners and losers in Europe, with the effects likely to be more acute nearer the Mediterranean. But across the continent countries will have to find ways to adapt.

LONDON, 1 February – With the European land surface warming rapidly, rainfall patterns changing and sea levels rising ever faster, southern Europe will suffer most from climate change. But there is an urgent need for countries across the continent to adapt to change, according to the European Environment Agency (EEA).

Temperatures are already 1.3C above the pre-industrial average and are expected to go on rising. This brings gains to some countries in northern Europe, with higher crop yields and lower heating costs, while the south loses.

It is the countries currently struggling most at the moment economically, Greece, Spain and Portugal, that will fare worst under climate change. The EEA says all three countries will lose both harvests and tourists, two of their main economic props, as a result of rising heat and low summer rainfall.

Northern Europe does not escape unscathed. River flooding is already a problem and annual sea level rise, which has already doubled in the last 20 years, and is currently at 3 mm a year, is expected to rise further. All the countries around the North Sea are now vulnerable to storm surges.

It’s real and it’s now

The latest assessment of how climate change is affecting Europe, published every four years by the Agency and due out in March, is the main evidence being used by the European Union to underpin its policy of adapting to a warming world.

Billions of euros will be spent trying to stave off the worst effects of climate change, which the Agency says are already going to happen whatever we do now to mitigate carbon emissions. Temperatures in Europe are expected to rise as much as 4C this century.

Professor Jacqueline McGlade, EEA Executive Director, has said: ”Climate change is a reality. The extent and speed of it is becoming ever more evident. This means every part of the economy, including households, has to adapt.”

While in some places changes are beneficial, for example an earlier spring and longer growing season, the overall effects are negative. The further south in Europe climatologists investigate, the more they see climate change affecting both human and natural populations.

Changes ahead for tourism

Health effects, tick-borne diseases, mosquitoes and heat waves are serious threats. There is evidence that butterflies and other species adapted to living in cooler climes cannot move north fast enough to survive.

Among the predictions is a change in where Europeans will take their holidays, and when. As temperatures increase, more people will take their summer breaks in northern and central Europe, leaving it till the winter to travel south. This, along with loss of snow cover in the lower skiing resorts, is likely to have severe economic impacts in some regions.

The number of days people need to turn on their central heating has already gone down by 16 days a year since 1980. The number of days when air conditioning is needed in the summer has risen.

The increased electricity demand in the summer is likely to cause a power crisis in southern Europe. Low river flows will probably face nuclear and thermal power plants with difficulties because both need large quantities of cooling water to operate efficiently.

The lack of summer hydropower, already a problem in some countries, will become far more noticeable because of the demand for electricity for cooling in the heat.

Crop yields will increase dramatically in some northern and eastern European countries and decrease in the south. The countries worst affected will be Spain, Portugal and Greece, which stand to lose between 15% and 25% of all crops because of a lack of summer rainfall. France, Italy, Albania, Macedonia, Serbia, Bosnia and Bulgaria will also suffer losses of between 5% and 15%.

The gains are mostly in the north, with the Scandinavian countries and Russia increasing yields – more than 5% and perhaps as much as 35% in parts of Norway and Sweden. The Ukraine, already one of the largest grain producers in Europe, is also going to have improved yields.

Along with the effect on agriculture, less rainfall will cause species loss in the Mediterranean, partly due to more forest fires and heat waves. The health of rivers will be affected by low summer rainfall. – Climate News Network

Tags: Agriculture, Impacts, Sea levels, Tourism Comments Off

by Tim Radford

Pyreneans pin hopes on snow

January 29, 2013 in Economy

EMBARGOED until 0001 GMT on Tuesday 29 January

Warming will reduce Pyrenean snowfall
Image: Nathan/Wikipedia

By Tim Radford

Diminishing snowfalls in the Pyrenees could spell trouble for the people of Andorra – and even mechanical aids might fail to retrieve the situation.

LONDON, 29 January – The microstate of Andorra, a tiny Catalan principality in the Pyrenees between France and Spain, could be a victim of global warming. Researchers from the Polytechnic University of Catalonia report, in the journal Climate Research, that a warmer world could mean a shorter skiing season – and economic stress for the citizens of Andorra.

Tourism is big business in Andorra: it survives as a duty free shopping centre and tax haven, enclosed by EU states but not an EU member, and is host to 10 million visitors a year, many of them in winter.

The principality has one of the lowest unemployment rates in the world, and its 85,000 citizens have one of the longest life expectancies. But warming scenarios of 2°C and 4°C could change the picture. Tourism generates 80% of Andorra’s GDP. Snow falls would be unpredictable, and fewer visitors would check into the lower altitude resorts.

“The rapid decrease in glacier mass, quantity and frequency changes of snowfall, level variations and biodiversity distribution are examples of how mountain ecosystems are highly sensitive,” said Marc Pons, leader of the study.

The researchers assessed the snow cover at each of the resorts at altitudes of 1,500, 2,000 and 2,500 metres. To guarantee enough snow to attract snow tourism, the resorts have invested in snow machines.

In the case of a 2°C temperature rise, the ski season would be 30% shorter but only the lower slopes of one resort, Pal-Arinsal, would be affected. In a 4°C scenario all three resorts would suffer badly at the lower altitudes, and not even snow machines could save the situation for Pal-Arinsal. A 15% fall in visitors would cost the Andorrans 50 million euros each season, the researchers calculate. – Climate News Network

Tags: Andorra, Impacts, Winter sports Comments Off

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