Blog

Why dread, not dollar losses, decrees how we react to climate risks

  • 06 Jun 2014, 15:00
  • Ros Donald

More is spent in the US on planning for earthquakes than for wildfires, even though both are dangerous to populations. So how can decisionmakers do better? A new paper aims to incorporate what we know about the psychology of risk to overcome biases and find a better way of planning for natural hazards. 

Disaster planners normally use estimates equivalent to how much money could be lost when making decisions about what to spend on dangers like hurricanes, earthquakes and forest fires. But experts from the University of Colorado say this approach fails to take into account how people view natural hazards. 

Read more

Intensity, pragmatism & flexibility: Three key components of Obama’s carbon pollution plan

  • 05 Jun 2014, 15:55
  • Mat Hope

CC: Greg Goebel

President Obama's plan to cut US emissions was launched with great fanfare earlier this week. Analysts are now scratching their heads trying to work out the details. Here are three of the plan's key components.

Carbon intensity

Monday's  announcement led to a spate of headlines declaring the plan would cut power plant emissions by 30 per cent by 2030. But while that's the potential outcome of the plan, it's not the goal.

The EPA is not telling states how much their power sectors can emit. It is telling them how much they can emit per unit of power generated. The EPA calls this  a "pollution-to-power ratio", but it's more often called carbon intensity.

Based on expected demand for power, it thinks these limits will add up to a 30 per cent power sector emissions cut compared to 2005. But its expectations of demand could be wrong. So emissions could go up even if states meet their carbon intensity targets.

Read more

Could rebranding environmentalism help tackle climate change?

  • 04 Jun 2014, 15:40
  • Mat Hope

Floyd Wilde

Politicians have been trying to address climate change for two decades now, with limited success. Given the scope and urgency of the problem, cirumstances suggests the environmental movement has failed. That means it's time for a new environmentalism.

Or so the argument goes. But does the environmental movement really need rebranding?

Defining failure

The starting point of any movement's next iteration is the old one's inadequacies. New environmentalism is no different.

A couple of years ago, BusinessGreen editor James Murray argued that "environmentalism is in crisis". What was needed, he argued, was "a different response to those that have been tried and proved wanting in the past". That response can be described as  "new environmentalism".

But the crisis message has caveats. Speaking at the New Environmentalism Summit held in Brussels yesterday, UN Environmental Programmes executive director Achim Steiner - who identifies himself as a new environmentalist - warned not to underplay the environmental achievements of the last 20 years. From establishing a global deal to curb global warming to two degrees, to renewable energy accounting for  19 per cent of the world's energy consumption, "while not having solved the problem, [environmentalists] have an extraordinary record of success to point to".

Yet for all the environmental movement's success, global emissions continue to rise. Countries have failed to agree a new global deal to replace the Kyoto protocol that was due to expire in 2012. And green groups widely condemned world leaders' last major effort to do so - the Copenhagen conference in 2009 - as a  failure.

So how might new environmentalism address past deficiencies?

Read more

The IEA weighs in on stranded assets - not just a green conspiracy?

  • 04 Jun 2014, 15:00
  • Simon Evans

CC2.0 Bryan Burke

 Demand for fossil fuels would fall dramatically if the world gets serious on climate change, according to projections from the International Energy Agency.

That would leave major oil firms unable to recoup money invested in new supplies, the IEA says. Their fossil fuel assets could lose all value and become 'stranded'.

Smaller slice of the (energy) pie

Fossil fuels' share of the global energy mix will fall from the current 82 per cent to 76 per cent in a 4 degree world, the IEA says. That is a world the IEA calls its 'new policies scenario'. Fossil fuels' share of the global energy mix would fall still further to 65 per cent if we avoid dangerous climate change of 2 degrees - the IEA's 450 scenario.

Gas consumption would be higher than it is today in either case (purple line, below). But serious action to tackle climate change would see oil consumption peak before 2020 (red line). And coal use (brown line) would drop particularly sharply after peaking around 2015, the IEA scenario suggests.

IEA fossil fuel share

This means that in a 2 degree world - according to the IEA - around $300 billion of investment in fossil fuel assets could be "stranded". This figure could increase further if there is a lack of clear policy in the interim which leads to investment in exploration or generating capacity that is not needed.

Read more

IEA: The marginal cost of two degrees

  • 03 Jun 2014, 17:00
  • Simon Evans

CC2.0 Calma/IAEA

The world needs to spend $48 trillion between now and 2035 in order to keep the lights on and meet rising demand for energy, the International Energy Agency says in its World Energy Investment Outlook. The bad news is that if you spend all of that money, the IEA's best guess is you get a 4 degree world.

The good news is that if we can collectively muster another $5 trillion - then we can keep the lights on and avoid dangerous climate change, according to the IEA.

IEA chief economist Fatih Birol says:

"The difference is not big… The main issue is not to raise additional capital but to reallocate investments… The world that we would like to see depends on the right investment decisions."

How much does the world need to spend?

Whatever happens to the climate, the world's energy systems have huge investment needs over the next two decades.

The IEA thinks we will need to spend nearly $25 trillion on new coal, oil and gas supplies between now and 2035 (far left, below).

That's to meet its 'new policies scenario' where countries make some new efforts to tackle emissions but there is no global concerted action on climate.

Another $16 trillion will need to be spent on power stations and the transmission networks that distribute power to homes and businesses (blue columns, centre). And $8 trillion will be needed to make homes, cars and factories more efficient (below right).

IEA 1Source: IEA World Energy Investment Outlook

 

Read more

Q&A: Obama’s plan to cut coal and gas emissions

  • 02 Jun 2014, 15:35
  • Simon Evans

Today marks President Obama's boldest attempt yet to tackle US greenhouse gas emissions. At his request, the US Environmental Protection Agency has published a Clean Power Plan to cut emissions from coal and gas plants.

What is the plan?

The plan aims to cut the emissions of the US power sector 30 per cent on 2005 levels over the next sixteen years. It is open for comment for 120 days and the EPA aims to have final rules in force by June 2015.

Each state in the US will be set their own target. States will have until 30 June 2016 to submit plans explaining how they will meet this target. The EPA says it might allow states to plead for up to two years' extra time.

The proposal covers emissions from 1,600 existing coal and gas-fired power stations across the US. Regulations limiting emissions from new power stations are already in the pipeline.

Why is President Obama doing this?

President Obama has pledged to cut US emissions by 17 per cent of 2005 levels by 2020, 42 per cent by 2030 and 83 per cent by 2050.

The Clean Power Plan does not increase US climate ambition but it does give Obama a better chance of meeting his existing pledges.

He has tried to get the US Congress to pass cap-and-trade laws to regulate emissions before, but every time he has been rebuffed by his political opponents.

He is now relying on executive powers that bypass Congress, and allow the EPA to regulate power sector emissions directly.

Read more

Obama’s new coal rule: Bold climate leadership, a lawsuit waiting to happen, or both?

  • 30 May 2014, 13:30
  • Mat Hope & Simon Evans

Matt H. Wade

On Monday President Obama is  expected to announce draft plans that would aim to cut emissions from coal-fired US power plants by up to 20 per cent.

The plan will make use of executive powers under the Clean Air Act, avoiding the need to get approval from the US Congress. The Obama administration is in the process of using these powers to introduce rules limiting emissions from new power stations.

Now America's existing fleet of coal plants is in the firing line. To soften the blow, US states are expected to be given leeway to meet their share of a national coal emissions target through carbon trading, renewables or energy efficiency.

Here's what the media on both sides of the Atlantic had to say.

US

The  New York Times says the rule will be Obama's "most forceful effort" to make the US tackle climate change. News analysis website  Vox says the rule shows the president has the strength to act without Congress' approval. It's almost as if the Environmental Protection Agency is now Obama's personal legislative branch, complains  Fox News - which is no fan of either.

The plan is also being watched keenly from afar. The  New York Times says foreign governments are seeing it as a test of the US's seriousness about combating climate change. Former UN climate chief Yvo de Boer  tellsRTCC that the plan is a "critical moment" on the road to a global climate deal.

Read more

How President Obama will tackle US coal emissions

  • 29 May 2014, 17:25
  • Simon Evans

The White House

Next Monday President Obama will unveil a new regulation that would aim to cut carbon emissions from coal-fired power stations by up to 20 per cent, the New York Times reports.

It will be the boldest move yet in his efforts to force America to take climate change action, despite opposition from the US Congress.

In a speech this week, Obama denounced those that "deny" climate change. He said:

"American influence is always stronger when we lead by example. We cannot exempt ourselves from the rules that apply to everyone else… cooperation must energize the global effort to combat climate change."

Next Monday's proposal stems from Obama's Climate Action Plan, published last summer. This aims to back up a pledge to take US emissions 17 per cent below 2005 levels by 2020 and to cut them 42 per cent by 2030.

Hard-won powers

At the President's request the US Environmental Protection Agency (EPA) finalised an emissions limit for new power stations last autumn, using hard-won powers to regulate carbon under the Clean Air Act. The EPA is working towards a 1 June 2014 deadline for a similar rule tackling emissions from existing power stations.

The standard for new plants sets a limit of 500 kilograms of carbon dioxide per megawatt hour of electricity for plants that burn coal, meaning that they would have to fit carbon capture and storage equipment capturing a portion of their emissions in order to operate.

The limit is similar to one that opposition MPs tried, but failed to introduce into the UK's Energy Bill last year. It is about half the emissions of a typical coal plant.

The EPA won't be able to introduce a similar rule for existing plants because it would force almost all of the country's 600 coal-fired generators to shut down. These plants provide around two-fifths of US electricity.

Instead, media reports suggest the rule would aim to reduce coal emissions by 20 per cent at the national level rather than applying directly to individual stations.

Read more

The state of carbon pricing: Around the world in 46 carbon markets

  • 29 May 2014, 16:20
  • Mat Hope

Sarah Ackerman

Carbon markets, designed to make polluters pay and reduce emissions, are more common than ever. But the economic slump and the structural flaws mean they're stumbling, a new report suggests. We take a whistlestop tour of the schemes.

As eight new markets opened in 2013, and both the US and China established programmes, there was some hope that carbon pricing was coming of age. But only 12 per cent of the world's emissions are covered by the projects. And the last 12 months have been tough for some flagship schemes.

Nonetheless, the World Bank's  annual review of carbon markets shows they are now present on almost all the world's continents in some form:

Screen Shot 2014-05-29 At 10.53.27

Europe

Some countries have a carbon tax where the government sets a price for each tonne of carbon dioxide emitted. Others have cap-and-trade systems where the governing body sets a gradually reducing limit on emissions covered by the scheme, and let the market set the price.

The European Union's emissions trading scheme (ETS) is the world's largest cap-and-trade scheme, covering about half the bloc's carbon dioxide emissions. But the ETS has hit trouble in recent years.

The European Commission scrambled to boost the price after it plummeted to record lows in 2013. Its plan to temporarily remove 900 million permits - known as  backloading - is only a temporary fix, however.

The commission has introduced a new proposal that would allow it to tinker with the number of permits, known as a strategic reserve. But experts remain  unconvinced the reform would be able to save the market.

Read more

Will the surge in support for UKIP and other eurosceptics damage EU climate policy?

  • 29 May 2014, 09:00
  • Simon Evans

CC2.0 European Parliament

Eurosceptic parties like the UK Independence Party have made gains across Europe, election results show, winning the largest share in the UK, France and several other member states.

These parties are generally opposed to environmental rules and regulations, preferring a focus on jobs, growth and immigration.

So it's no surprise to see speculation that this will damage the EU's climate agenda. More unexpected is the idea that the rise of the eurosceptics will be good for climate policy. We take a look at the main arguments.

Analysts Thomson Reuters Point Carbon said climate and energy policy would be "significantly influenced" by the shift in the balance of power, and they don't mean in a good way.

In a press release Marcus Ferdinand, head of EU carbon analysis for the firm said:

"With the increased share of eurosceptic Parliamentarians, the majority in favour of tighter energy and climate policy - as well as a more ambitious EU emissions trading scheme - is likely to become more unstable."

Read more