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Nuclear subsidy deal ‘will kill renewables’

April 7, 2014 in Energy, Europe, Nuclear power, Renewables, Subsidies, United Kingdom

EMBARGOED UNTIL 1101 GMT ON MONDAY 7 APRIL

Hinkley Point nuclear power station, up for renewal: But on what terms? Image: Barbara Cook via Wikimedia Commons

Hinkley Point nuclear power station, up for renewal: But on what terms?
Image: Barbara Cook via Wikimedia Commons

By Paul Brown

The battle over the UK’s plan to subsidise nuclear power will decide Europe’s energy mix for the next 50 years, say critics.

LONDON, 7 April – The United Kingdom’s plans to build heavily subsidised nuclear power stations have come under withering attack from a coalition of Members of Parliament, academics, energy industry experts and environmental groups.

Evidence has poured into the European Commission, which is investigating whether the deal with the giant French nuclear company EDF breaks EU competition rules. The evidence from many objectors, whose submissions had to be made by today, claims that if the contract goes through it will wreck Europe’s chance of building up renewable energies to avert the worst impacts of climate change.

They say renewables will have to compete in an unfair market where one generator, nuclear, is guaranteed to be able to sell all its electricity at a stable price and with a built-in profit until 2058.

The UK Government has agreed a minimum price of £92.50 (US $153) a megawatt hour from a new nuclear power station at Hinkley Point in the west of England from 2023 – roughly double the existing price of electricity in Britain. The price will rise with inflation and runs for 35 years, a deal unprecedented in the energy sector, and not available to renewable energies like wind and solar. The guarantee will continue for all future nuclear stations too.

The Government has gone further, guaranteeing loans for construction, and providing insurance and compensation payments if policies change for any reason. It claims that the deal will save £75 a year on the average consumer’s bill if electricity prices rise by 2023, as it forecasts. If they do not, then consumers will be paying far more for their electricity than they would otherwise.

EU test case

No-one involved in the investigation into whether the deal constitutes unfair state aid doubts that climate change is a severe threat and needs to be tackled. The argument is about which is the best set of technologies to help deal with the problem.

There are 12 states in Europe interested in nuclear power generation, slightly under half the EU’s members. All see the UK subsidies investigation as a test case into whether they also will be able to give state aid to nuclear stations.

One of the submissions, from the Nuclear Consulting Group, with more than 100 signatures from MPs from six parties in the UK and European Parliaments, plus engineers, academics and energy experts, says the proposed aid to guarantee nuclear’s profitability is incompatible with EU State Aid rules. The NCG says it unfairly discriminates in favour of nuclear and will damage renewable energies with far greater potential.

Given that this level of support is unavailable to other low carbon technologies, it is certain to significantly distort competition and strongly affect trade between member states.

“The development of sustainable and affordable low carbon energy remains a growing economic sector with huge potential for job creation. To seek to delimit this diversity through particular State Aid support of nuclear power at the expense of other, potentially more flexible, safe, productive, cost-effective and affordable technologies seems, at the very least, unwise,” says the submission.

It says the British Government has also not been completely honest about the prospects for existing nuclear power stations. In its announcement about subsidies the Government claimed that all but one of the eight existing nuclear power stations were due to close about the time the new Hinkley Point plant is finished in 2023.

In fact EDF, which owns the plants, and is also building the new one, intends to keep them open until 2030 or even longer if safety conditions allow. If the Government’s current power station-building plans succeed, then more than 50% of Britain’s electricity would be generated by subsidised nuclear stations, effectively cutting out renewables.

Delays and cost over-runs

One big problem for the UK’s plans, apart from the European Commission inquiry, is that the building schedule for the European pressurised water reactors (EPRs) planned for Hinkley Point, and for Sizewell in eastern England, is in doubt.

The first two prototypes, under construction in Finland and France, are subject to severe construction delays and cost over-runs. The Finnish Olkiluto 3 EPR was due to be completed in 2009 at a fixed price of €3 billion (US £4.1 bn), but the cost has now escalated to €8.5 bn and completion has been put back to 2018. The French new build by EDF at Flamanville is already four years behind schedule and the cost has more than doubled to €8.5 billion.

Other groups objecting to the UK subsidy plan also say that rather than promoting a diversity of supply, as ministers claim, the decision to back nuclear will reduce the scope for other technologies.

Bad value

Friends of the Earth says that currently there are seven to ten viable renewable energies being developed in the UK, among them wind on and off shore, solar, biogas, wave, under-sea turbines, small-scale hydro, biomass, and hot rocks, all of which could contribute to the energy mix if nuclear had no guaranteed unfair advantage.

These were all comparatively new technologies, where the price of generation was coming down all the time. In contrast, FoE says, nuclear has been operating for 60 years and still requires a 35-year price guarantee.

By the time Hinkley is in operation, solar and on-shore wind will be far cheaper, with costs falling fast, and it is likely that offshore wind will be in a similar position. The nuclear subsidy “represents extremely bad value for money for UK citizens,” the submission concludes. – Climate News Network

Corporates weigh risks, opportunities of changing climate

April 5, 2014 in Adaptation, Banking, Business, Climate risk, Economy, Europe, Resource shortages

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Swings and roundabouts: For many enterprises, climate change can have a silver lining Image: User:klip game via Wikimedia Commons

Swings and roundabouts: For many enterprises, climate change can have a silver lining
Image: User:klip game via Wikimedia Commons

By Kieran Cooke

While politicians dither about what action to take on climate change, it appears that the corporate world – in Europe at least – is taking the issue seriously and adapting its operations.

LONDON, 5 April – Europe’s company board rooms are very much alive to the risks posed by climate change – and are also busy analysing business opportunities it might provide.

That’s among the findings of a survey by the Carbon Disclosure Project (CDP), an EU-based non-profit organisation specialising in corporate environmental information, and Acclimatise, a consultancy group which gives business advice on climate change adaptation and management.

Altogether 270 of Europe’s largest companies from across 20 countries were contacted concerning their attitudes to a changing climate.

The resulting report on the survey, Climate Change Resilience in Europe, indicates that a majority of companies see climate change having a negative impact on their operations: companies identified 780 risks to their finances compared with 379 opportunities that might be available as a result of climate change.

Risk to reputations

The biggest risk foreseen is a reduction or a disruption in production capacity. “Extreme weather, drought and flooding may disrupt the supply of certain produce and products”, says one respondent, a spokesperson for the Maersk shipping and industrial conglomerate.

“This can directly affect the revenue of our supply chain but also can have a negative impact on our reputation and create a demand for more local sourcing.”

There are other expected risks: a large banking group in the Netherlands is concerned that climate change-related flooding could have an adverse impact on  its data centres.

Energy companies worry about higher temperatures disrupting the operation of power plants, while banks are concerned about their investments in companies exposed to rising sea levels.

Boost for business

“Many of the essential conditions on which businesses rely are changing, leading to increasing prices, as well as shortfalls in the quality and supply of goods and services provided to customers”, says Steven Tebbe, managing director of CDP Europe.

Yet not everyone in Europe’s corporate world is pessimistic. The report says more than 40% of companies look forward to a growing demand for their services as a result of climate change.

Construction companies in some regions of Europe might benefit from a warming climate. “Shorter and milder winters with less snow and cold can increase the productivity at some construction sites, as construction activity may experience less potential delays due to snowfall”, says Skanska AB, the Sweden-based building group.

Adaptation is key to maintaining the health of corporate finances. “Through the development of financial instruments such as catastrophe bonds, especially for regions of Africa which are particularly impacted by climate change, the financial risks posed by natural disasters and droughts can be avoided”, says Barclays, the banking group.

Staying healthy

Meanwhile Diageo, the drinks conglomerate, says that by replacing barley in its beer with less thirsty, more climate change-resistant raw materials it can gain a competitive advantage on its rivals.

“To stay competitive, business leaders must account for climate impacts and work to understand if, how and where climate risks are material to their bottom line”, says John Firth, CEO of Acclimatise.

Steven Tebbes of CDP sees a direct link between an awareness of the impact of climate change and the financial well-being of a company.

“Industry environmental transparency and performance is today a prerequisite for attracting new investments and creating new jobs – there’s increasing evidence of the links between how well a company manages environmental and climate issues and its financial performance or access to capital.” – Climate News Network

Old Greek plays record halcyon days

March 8, 2014 in Climate, Europe, History, Weather

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The theatre at Epiidaurus, where many of the leading dramatists' plays were performed Image: plusgood via Wikimedia Commons

The theatre at Epiidaurus, where many of the leading dramatists’ plays were performed
Image: plusgood via Wikimedia Commons

By Tim Radford

History and literature provide evidence of consistently mild mid-winter weather in ancient Greece, helping climate scientists to reconstruct the past and so understand the future.

LONDON, 8 March – In fifth century Athens, in January at least, the skies were clear and the rain stayed away. The days, to use a classical reference, were halcyon.

Two Greek researchers have combed the great plays of Aeschylus, Sophocles and Euripides and the bawdy comedies of Aristophanes to deliver a long-term weather report for mid-winter days from 458 BC to 401 BC. They report in the Royal Meteorological Society’s journal Weather that, clearly, the city was a good place to hold open-air stage productions in mid-winter. Sophocles, in his masterpiece Oedipus at Colonus, actually says so:

“A distant music, pure and clear rises from green secluded vales. The constant trill of nightingales deep in their haunts of tangled vine, of sacred ivy, dark as wine, thick is the god’s inviolate wood; rich in berries and rich in fruit, the sun is curtained; the wind is mute, in winter.”

To understand the climate of the future, scientists must reconstruct the patterns of the past, long before the first formal weather records. They do this by examining pollens in lake beds, growth rings in ancient trees, ice cores and ocean muds to deliver circumstantial evidence of bygone seasons.

Balmy mid-winter

But there are also indirect references in human records: in naval log books, in medieval tax records, in monastic manuscripts, and in chronicles from Baghdad in the golden age of Islamic scholarship.

Christina Chronopoulou of the National and Kapodistrian University of Athens, and a colleague from Panteion University in the same city, decided to comb 43 surviving works performed during the Lenaia celebrations in mid-winter. They found seven clear direct and indirect references to the beneficial halcyon days of mid-winter.

The halcyon days are now a cliché but once referred to the myth of Alcyone, the grieving widow who was turned into a kingfisher by the gods, and who nested on the beach at midwinter.

But the fact the ancient Greeks routinely watched and expected to watch drama in open amphitheatres during the Attic month of Gamelion, which ran from 15 January to 15 February, provides indirect confirmation of good weather. Halcyon days, say the authors, are “atypical winter-time weather periods characterized by sunny and calm conditions” and the result of a stagnant high-pressure system that dominates the area at such a time of year.

Observant dramatists

And, as they worked through some of the great plays, they found enduring references to clear skies: in Agamemnon, by Aeschylus, in 458 BC a character spends his nights on the roof “to know thoroughly the throng of stars…” Aristophanes in The Birds in 414 BC describes a wedding.  Attic weddings lasted for three days and were performed in the open air, another indicator of mellow conditions. The Birds also contains references to a “skiadeion”, a parasol, an umbrella to provide shade from the sun, rather than shelter from the rain.

Euripides in Medea in 431 BC mentions “the temperate and sweet breezes” while Aristophanes in The Frogs in 405 BC actually addresses “you halcyons who chatter by the ever-flowing waves.”

“Combining the fact that dramatic contests were held in mid-winter without any indication of postponement, and references from the drama about clear weather and mild winters, we can assume that those particular days of almost every January were summery in the 5th and maybe the 4th centuries BC,” said Dr Chronopoulou. – Climate News Network

Europe’s flood risk may double by 2050

March 2, 2014 in Europe, European Union, Extreme weather, Flooding, Weather Systems

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Floods submerge St Mark's Square in Venice: The prospect is for worse to come Image: Wolfgang Moroder via Wikimedia Commons

Floods submerge St Mark’s Square in Venice: The prospect is for worse to come
Image: Wolfgang Moroder via Wikimedia Commons

By Tim Radford

As much of Europe recovers from the severest winter in several centuries, scientists say average annual flood losses could be almost five times greater by mid-century.

LONDON, 2 March – The catastrophic floods that soaked Europe last summer and the United Kingdom this winter are part of the pattern of things to come. According to a new study of flood risk in Nature Climate Change annual average losses from extreme floods in Europe could increase fivefold by 2050. And the frequency of destructive floods could almost double in that period.

About two thirds of the losses to come could be explained by socio-economic growth, according to a team led by Brenden Jongman of the University of Amsterdam in the Netherlands and Stefan Hochrainer-Stigler of theInternational Institute for Applied Systems Analysis in Austria.

That is because more development and investment means there is more at risk from any flooding. But the other third of the increase will be delivered by climate change, and a shift in rainfall patterns in Europe.

From 2000 to 2012, floods in European Union countries averaged €4.9 billion (US $6.8 bn) a year in losses. In the floods of June 2013, losses tipped €12 bn (US $16.6 bn) in nine countries of Central and Eastern Europe. The annual average losses could increase to €23.5 bn (US $32.4 bn) by 2050.

Unprecedented floods like those of 2013 occur on average once every 16 years now. By 2050, the probability will have increased to once every 10 years.

Floods widespread

The team looked at monthly peak river discharges in more than 1,000 river sub-basins to begin making their estimates: they also matched these peak flows with atmospheric circulation patterns. The point of the study was to deliver more accurate information.

“We brought together expertise from the fields of hydrology, economics, mathematics and climate change adaptation, allowing us for the first time to comprehensively assess continental flood risk and compare the different adaptation options,” said Brenden Jongman.

And Dr Hochrainer-Stigler said the new study for the first time accounted for the correlation between floods in different countries. Risk-assessment models tended to consider river basins as independent entities. “But in actuality, river flows across Europe are closely correlated, rising and falling in response to large-scale atmospheric patterns that bring rains and dry spells to large regions.”

All of this points to greater strains on the pan-European Solidarity Fund that finances recovery from disaster within the European Union. “If the rivers are flooding in Central Europe, they are also likely to be flooding in eastern European regions,” he said. – Climate News Network

US fracking revolution dilutes EU climate & energy plan

January 23, 2014 in Economy, Emissions reductions, Energy, Europe, Policy, Renewables, UNFCCC, USA

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Spanish protest: Fracking divides opinion in Europe Image: By Zarateman via Wikimedia Commons

Spanish protest: Fracking divides opinion in Europe
Image: By Zarateman via Wikimedia Commons

By Kieran Cooke

Tackling climate change comes off second best in the European Union’s latest package of climate and energy targets. Instead, maintaining economic competitiveness – particularly with the US – is the priority.

LONDON, 23 January – On the face of it, this week’s EU climate and energy package, with its targets for cutbacks in emissions of greenhouse gases (GHG) and the uptake of renewable energy up to the year 2030, looks impressive.

The central element in the package is a binding EU-wide 40% reduction in GHG emissions over 1990 levels by 2030. Significantly, this has to be achieved “through domestic measures alone” – meaning member states can’t meet emissions reductions obligations by making offsetting GHG cutbacks in other countries.

There’s also a binding target of achieving at least a 27% share of the European energy mix from renewables by the same year and plans for a major overhaul of the EU’s ill-performing Emissions Trading System (ETS), with the aim of lifting the market price for carbon and encouraging emission reductions across the industrial sector.

“If all other regions were equally ambitious about tackling climate change, the world would be in significantly better shape”, says Connie Hedegaard, the EU Climate Commissioner.

Yet while the figures might impress, it’s clear the fracking revolution in the US has the EU’s energy strategists on the run. According to the European Commission, US gas prices fell by 66% between 2005 and 2012 while in Europe they rose by 35% over the same period.

‘No contradiction’

Reflecting intense lobbying by Europe’s industrialists and several governments, the EU package repeatedly emphasises the need to retain economic competitiveness.

“Climate action is central for the future of our planet, while a truly European energy policy is key to our competitiveness” says Jose Manuel Barroso, the EC President.

Barroso insists that tackling the two issues simultaneously is not contradictory, but the EU’s critics say the latest package is designed more to satisfy short-term economic aims than to seriously tackle climate change.

The long-term goal of EU climate and energy policy is to reduce GHG emissions by up to 95% by 2050, limiting the rise in global average temperature to 2°C over pre-industrial levels and so hopefully averting runaway climate change.

Climate scientists and green groups within the EU say the 2030 targets are not nearly ambitious enough and make the 2050 goal very difficult, if not impossible, to achieve.

“We ask questions as if the science is in any real doubt. It is not.”

“We have to take into account that the 40% target is the death knell of 2°C and probably much more aligned with 4°C once all the trading/CDM/offsetting scams are factored in”, says Kevin Anderson, professor of energy and climate change at the University of Manchester in the UK and deputy director of the Tyndall Centre for Climate Change Research.

“As a climate community, we continually forget that not acting now has repercussions that in themselves change what the future will be – we ask questions as if the science is in any real doubt. It is not.”

The EU’s target for renewables has also come under fire, with critics saying the Commission has once again given in to powerful EU fossil fuel, nuclear and shale gas lobby groups.

Goal optional

Earlier proposals by a number of countries, including Germany, called for a 2030 renewables target of at least 30%.

At the insistence of countries such as Britain, which has both announced plans for a large-scale expansion of nuclear energy and is giving incentives to encourage the fracking industry, and Poland, which is heavily reliant on coal for its power and is also intent on exploiting shale gas, the target was lowered.

Furthermore the 27% goal for renewables is binding only on an EU-wide basis and not on individual member states: the result is likely to be that some countries will choose to reduce or opt out of meeting the target figure, leaving others to make up the shortfall by dramatically upping renewables use. In such circumstances, arguments could quickly develop.

By contrast, the present EU renewables target – a 20% share in the energy mix by 2020 – is binding on individual states.

Door open for shale

Ultimately, it is the need for Europe to maintain its economic competitiveness that is dominating EU strategy. That has meant scaling back on emissions cutbacks and renewable ambitions – and opening the door to the shale gas industry.

EC President Barroso says shale gas is changing the energy landscape in a dramatic way. Many in Europe are fiercely opposed to shale gas, yet the EU has stood back from imposing any EU-wide regulations on the industry, only issuing guidelines in its new package covering health and safety issues.

“It’s a good demonstration of the role the EU should play, setting the cross-border rules for environmental health and safety but not meddling in the energy mix that is chosen by member states”, says Barroso.

The package of EU proposals will now move on to be discussed by Europe’s leaders in March. – Climate News Network

Swiss wildlife heads uphill fast

January 13, 2014 in Adaptation, Europe, Temperature Increase, Wildlife

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Plants are moving uphill because of rising temperatures - like this Leopard’s bane (Doronicum clusii) Image: Jörg Schmill

Plants are moving uphill because of rising temperatures – like this Leopard’s bane (Doronicum clusii)
Image: Jörg Schmill

By Tim Radford

Wildlife in Switzerland seeking relief from warming temperatures by moving further up the mountainsides is proving surprisingly mobile.

LONDON, 13 January – Alpine ecosystems are on the rise. Between 2003 and 2010, plants have managed to scramble up another eight metres of mountain slope. On the way up, they were overtaken by butterflies, which collectively gained another 38 metres of higher ground.  Alpine birds in turn fluttered an average of 42 metres higher.

Tobias Roth and colleagues from the University of Basel and the Petite Camargue Alsacienne research station at St Louis in France report in PLOS One, the journal of the Public Library of Science, that, at least in the short term, alpine landscapes offer safe habitats in a warming world.

“An average of eight metres difference in eight years and across all plant species is quite impressive for the often not very mobile plant communities”, said Valentin Amrhein, one of the authors.

“The results show that the biological impacts of climate change will not only become apparent in the long term. Animals and plants are already today adapting to the rising temperatures at a surprising pace.”

Parallel from the UK

British researchers have just confirmed that British butterflies have been moving north as average temperatures increase. But, as always with surveys of biodiversity, the picture is complicated by other factors.

Natural cycles of explosive growth and dramatic failure are regular features of bird and animal populations, driven by the numbers of predators and the availability of prey.

Habitats change, and so do farming practices, and these changes too affect species numbers. But average temperatures also affect farming practices and natural habitats. So the Swiss research was another attempt to try to disentangle some of the influences on local fauna and flora.

The researchers worked their way through data collected from 214 sample plots between 2003 and 2010, between altitudes of 500 and 3,000 metres, covering all the major ecosystems of the region.

Puzzles remain

Between 1995 and 2010, summer temperatures rose in Switzerland by about 0.07% each year at all altitudes. The researchers found no decrease in the variation of ecological communities in their temperature niches, which, they say, suggests that global warming has not led to more homogenous ecosystems.

At low altitudes, there was a shift towards warm-dwelling species for all three groups. The high altitude birds continued to move uphill, but plants and butterflies showed no significant changes above the tree line, for reasons that remain puzzling.

“It is possible that land-use related changes in habitats near the tree line outweigh the effects of climate warming. For example, many alpine pastures have been abandoned in recent years”, said Tobias Roth.

“It is also possible that alpine plants are better protected against changing climatic conditions, due to the highly varied surface of alpine landscapes.” – Climate News Network

Parts of Europe ‘ 5°C warmer’ by 2100

January 11, 2014 in Adaptation, Drought, Europe, European Environment Agency, Temperature Increase, Water

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A dry river bed in a peat upland in northern England: Not just southern Europe will be affected Image: Catherine Moody via imaggeo.egu.eu

A dry river bed in a peat upland in the north of England: Not just southern Europe will be affected
Image: Catherine Moody via imaggeo.egu.eu

By Alex Kirby

Severe temperature rises in parts of Europe by the end of the century will be accompanied by much more frequent droughts, scientists say.

LONDON, 11 January – With exquisite timing, as parts of Europe endure the worst storms for decades, researchers have issued a highly topical warning.

By the end of this century, they say, summer temperatures in parts of southern Europe are expected to be up to 5°C higher than they were from 1961 to 1990, with droughts inevitably becoming more frequent and intense, because of both climate change and increased water use.

The researchers, from the European Commission’s Joint Research Centre (JRC) and the University of Kassel in Germany, have published their findings in Hydrology and Earth System Sciences, an open access journal of the European Geosciences Union (EGU). The scientific article is available online, free of charge.

“Our research shows that many river basins, especially in southern parts of Europe, are likely to become more prone to periods of reduced water supply due to climate change”, says Giovanni Forzieri, a researcher in climate risk management at the JRC and lead author of the study. In Europe the cost of drought over the last three decades has totalled over €100 billion (£83 bn).

The researchers wanted to find out if and where in Europe increasing temperatures and intensive water consumption could make future droughts more severe and long-lasting.

Marked regional differences

To do this they analysed climate and hydrological models under different scenarios up to 2100. They then used these projected conditions to drive a hydrological model that mimics the distribution and flow of water on Earth. By running this model until 2100 for all river basins in Europe, they could evaluate how drought conditions may change in magnitude and severity over the 21st century.

The research shows that southern Europe will be the most affected. Stream and river minimum flow levels may be up to 40% lower, with periods of water shortage up to 80% more frequent because of climate change alone in the Iberian Peninsula, the south of France, Italy and the Balkans.

Higher temperatures will result in more water evaporating from soil, trees and water and will also mean more frequent and prolonged dry spells. The emission scenario used in the study predicts that average global temperature will increase by up to 3.4°C by 2100 above the years 1961 to 1990.

But regional rises are liable to be significantly greater, as for example in the case of the Iberian Peninsula, says Luc Feyen, a hydrologist at JRC and co-author of the paper.

Spreading effects

Apart from climate warming, intensive water use will also worsen drought conditions by 10-30% in southern Europe, as well as in the west and centre of the continent, and in some parts of the UK.

In 2010 a study by the US National Center for Atmospheric Research projected serious drought impacts by the 2030s, and suggested those by the end of the century could surpass anything in the historical record.

In 2012 a report by the European Environment Agency, Vulnerability to Water Scarcity and Drought in Europe – ETC/ICM Technical Report 3/2012, said there had been an observable increase in the number of countries affected by drought each decade from 1971 to 2011.

The occurrence of drought had increased significantly in the decade from 2001, not only in southern and central parts of the European Union, but in the northern and eastern parts of the bloc as well. – Climate News Network

Carbon trading slides again

January 4, 2014 in Business, Carbon Trading, Climate finance, Economy, Europe

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Emissions from an Estonian power station: Without ambitious climate targets, carbon prices will remain low Image: By Ivo Kruusamägi via Wikimedia Commons

Emissions from an Estonian power station: Without ambitious climate targets, carbon prices will remain low
Image: By Ivo Kruusamägi via Wikimedia Commons

By Kieran Cooke

Carbon trading has been lauded by some as a key way to cut back on climate-changing greenhouse gas emissions. Trouble is, the market has been stuck in the doldrums for years.

LONDON, 4 January – The performance of the world carbon market continues to disappoint.

According to the latest figures from Thomson Reuters Point Carbon, a specialist group analyzing carbon market activity, a total of €38.4 bn worth of carbon allowances and credits was traded last year – a decline of nearly 40% on the 2012 figure.

The value of trading in the market has now declined for three years in a row – in 2011 trades were valued at €96 bn. 2013 also saw the volume of emissions units traded around the world drop for the first time since 2010.

“The main explanation for the falling prices in carbon markets around the world is the very modest emissions reduction targets adopted for the period up to 2020”, says Anders Nordeng, senior carbon analyst at Point Carbon.

“Without ambitious climate targets there is no need for deep emission reductions and carbon prices will remain at low levels.“

Too cheap to work

The EU’s Emissions Trading System (ETS) dominates the world’s carbon trading, accounting for 94% of the market’s total value and 88% of the volume of emission units traded.

The scheme, which has been in operation since 2005, was set up with the aim of reducing CO2 emissions by requiring companies such as energy suppliers and other industrial conglomerates to pay for their emissions through the buying and selling of allowances or “pollution permits.”

Initial market mismanagement resulted in a chronic over-supply of tradeable permits. In recent years Europe’s economic crisis lessened economic activity and reduced the demand for allowances.

Allowances, based on the market price of a tonne of carbon, are now trading at around the €5 mark though at one stage in 2013 the price dropped to under €3.  Market analysts say a price of at least €25 is needed in order to persuade companies to decarbonise and for carbon reduction targets to be achieved.

Point Carbon says it’s not all gloom in the market. While the ETS continues to underperform, other carbon markets are developing. Trading in North America, driven by activity in California, in north-eastern states in the US and Quebec in Canada, grew both in value and volume last year.

Chinese potential

“2013 was the year the North American carbon markets blossomed”, says Olga Chistyakova, a Point Carbon analyst.

China is also stepping up carbon trading, having launched the first of seven proposed regional trading schemes in mid-2013.

“Although the traded volumes are still modest, the sheer size of some of the covered provinces and cities (Guangdong, Beijing, Shanghai) points to a great potential”, says Point Carbon.

Meanwhile, the ETS has undergone some limited changes aimed at shoring up carbon prices. After months of wrangling between states, the sale of 900 million ETS allowances has been postponed. And what’s billed as a comprehensive structural reform of the ETS is due to be announced in mid-January.

There are also signs that the corporate sector, particularly in the US, is adopting carbon trading as part of business strategy. A recent survey by the Carbon Disclosure Project found that many large US corporations are setting their own internal carbon pricing in anticipation of future environmental legislation and to assess the value and risk of various investment projects. – Climate News Network

Carbon market looks a little livelier

December 27, 2013 in Carbon Trading, CDP, Emissions reductions, Europe

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Carbon emissions from industry and power plants could be reined in by the new measures Image: DavidB via Wikimedia Commons

Carbon emissions from industry and power plants could be reined in by the new measures
Image: DavidB via Wikimedia Commons

By Kieran Cooke

In Europe the immediate prospects for attempts to cut climate emissions from industry look a little brighter, while many US companies are adopting their own internal carbon pricing systems.

LONDON, 27 December – Don’t put any bets on it – but at long last the world-wide trade in carbon looks set to improve, if only just a little.

In mid-December the European Union adopted an emergency law designed to  firm up prices in its Emissions Trading System (ETS). Many people see carbon trading as a key weapon in the battle against climate change, though others say it has so far been ineffective in tackling the problem.

The ETS, the world’s biggest carbon trading scheme, seeks to reduce CO2 emissions by requiring companies such as energy suppliers and oil and gas conglomerates to pay for their pollution.

But the ETS, which has been operating since 2005, has underperformed. Market analysts say carbon allowances or so-called “pollution permits” need to be traded at a price of at least €25 in order to reflect the true cost of emissions and persuade companies to decarbonise.

Recently allowances, based on the market price of a tonne of carbon, have been trading at around the €4.50 mark.  At one stage earlier in 2013, prices dropped to under €3.

Mishandling of the market led to a chronic over-supply of tradeable allowances. Europe’s economic crisis also lessened economic activity and reduced the demand for allowances.

Comprehensive reform

The EU’s new law postpones the sale of 900 million ETS carbon allowances: the move, referred to as “backloading”, aims to lift prices from levels which the EU admits are too low to encourage companies to invest in low-carbon technologies.
It came after 18 months of political wrangling between member states, with some saying the ETS market should be allowed to find its own price levels, without intervention by Brussels.

Various non-governmental organisations, while welcoming the change as a step in the right direction, say the measure – which is only temporary – is only  “a patch-up solution”.

They say at least 2.2 billion allowances need to be permanently removed from the ETS by 2020 if decarbonisation goals are to be met. In mid-January 2014 the EU is scheduled to announce proposals for a comprehensive structural reform of the ETS.

Meanwhile a report by the Carbon Disclosure Project (CDP) indicates that other moves are under way which could breathe new life into the moribund carbon market.

Less reluctant

The CDP, investigating the carbon policies of a number of large companies in the US, says many firms are setting their own internal carbon pricing as “a core element in their ongoing business strategies”.

For some companies internal carbon pricing is aimed at being ready for future environmental legislation. Internal carbon pricing is also used to assess the value of projects and calculate the risk of various investment decisions.

Some of these companies might have previously been reluctant to become involved in carbon pricing or discussions of climate change.

“Such carbon pricing has become standard operating practice in business planning, in that companies acknowledge the process of ongoing climate change – including extreme and unpredictable weather events – as a key relevant business factor for which they wish to be prepared”, the report says.

Interestingly, internal pricing set by the US companies is often considerably higher than that in the ETS. Exxon Mobil, in setting its own carbon market, anticipates a price of US$60 by 2030. BP and Shell at present use a price of US$40.

At the other end of the scale, Google uses a price of US$14, while the Walt Disney organisation, which has set itself the long-term goal of “zero net greenhouse gas emissions”, uses prices of between US$10 and US$20. – Climate News Network

Researchers study shellfish success

December 24, 2013 in Adaptation, Antarctic, Europe, Fish, Marine ecology, Ocean acidification

FOR IMMEDIATE RELEASE

Scottish musel beds: The European research will be globally relevant Image: Copyright and courtesy of SAMS

Scottish mussel beds: The European research will be globally relevant
Image: Copyright and courtesy of SAMS

By Alex Kirby

The British Antarctic Survey is leading a research programme aimed at helping the European fishing industry and monitoring the effects of climate change on several shellfish species.

LONDON, 24 December – If you like the occasional plate of grilled scallops or fancy an oyster now and then, read on and ponder. The health of several species of European shellfish is under threat.

The bad news is that the shellfish face an uncertain future as the oceans become warmer and more acidic because of the changing climate. But there is some better news too: the European Union is funding an international research team to work out how these changes will affect several species vital to the European fishing economy and to marine biodiversity.

Scientists do not fully understand how shellfish like oysters, mussels, scallops and clams produce their shells, or how a change in environment will affect their populations. To address this the EU is funding a €3.6 million (£3 m) programme called CACHE (Calcium in a Changing Environment). Shellfish are an important part of the European marine economy which provides an estimated 5.4 million jobs.

Coordinated from the British Antarctic Survey (BAS) in Cambridge, UK, the programme will research how the animals produce their shells. The scientists will also try to identify populations which are resilient to climate change.

These relatively small animals are important as part of the wider pattern of marine biodiversity. And, as they make their shells from calcium carbonate, they also help to absorb the greenhouse gas CO2 from seawater.

Biotech applications

The risk to them comes from their dependence on calcium carbonate – a substance which dissolves under acidic conditions.  As the oceans become warmer and more acidic their shells will either thin, or the animals will have to expend more energy on producing thicker shells.  This will affect their population sizes and the quality of their flesh, directly affecting fisheries and consumers.

How shellfish produce their shells also matters to the biotech industry, which is interested in imitating (in a process known as bio-mimicry) the way in which shellfish take a soluble compound like calcium to make solid, robust structures.

A better understanding of this could reduce the carbon footprint of producing construction materials and create the potential for “fixing” CO2 into the building process.

The species the research team is looking at are the king scallop, the Pacific oyster, the blue mussel and the soft shell clam. It will also study the native oyster to help conservation plans, as it is listed as a priority species in the UK.

Iceberg protection

Dr Melody Clark of BAS, the programme coordinator, told the Climate News Network: “The programme is driven by the science. We really don’t know the fundamentals of how shellfish respond to changing environments.

“We do know that, in response to environmental conditions, they can change how much shell they produce, for example growing thicker shells in response to predators. In the Antarctic, inter-tidal limpets grow much thicker shells than sub-tidal ones, because they are bashed by icebergs.

“And we don’t know just how they make their shells, whether with calcium from their food, or from the seawater.

“On bio-mimicry, this research may let us start to develop ways of producing more robust structures without carbon, and with little energy.

“We’re researching shellfish in European waters, but we’re recruiting the researchers worldwide, and the results will be relevant beyond Europe.” – Climate News Network