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Daily Briefing |

TODAY'S CLIMATE AND ENERGY HEADLINES

Briefing date 29.06.2022
G7 accused of ‘backsliding’ on climate goals over energy security fears

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News.

G7 accused of ‘backsliding’ on climate goals over energy security fears
Financial Times Read Article

The leaders of G7 countries have been accused by campaigners of “backsliding” on climate goals after they watered down pledges to stop fossil fuel investment due to fears over energy security linked to Russia’s invasion of Ukraine, the Financial Times reports. The final communique released by the summit taking place this week described investment in liquefied natural gas as a “necessary response to the current crisis” that was “appropriate as a temporary response” due to “exceptional circumstances”, the newspaper says. In addition, the G7 included a “loophole” to a previous pledge to end investments in overseas fossil fuel projects by the end of this year, stating that there would be an exception “in limited circumstances clearly defined by each country consistent with a 1.5C warming limit”, it continues. According to Climate Home News, at the COP26 climate summit last year, six G7 countries agreed to end public finance for fossil fuel projects overseas by the end of 2022, later joined by the seventh, Japan, in May. Sources told Climate Home that German chancellor Olaf Scholz had proposed the wording around gas investments potentially being necessary, with support from Italy and opposition from the UK and France. Reuters reports that, under pressure from Japan, they also got rid of a commitment to making half of all vehicles zero-emission by 2030, replacing it with a vaguer pledge to “significantly” increase sales. Other pledges in the communique included achieving fully or predominantly decarbonised power sectors by 2035 and “concrete and timely steps” towards the goal of accelerating a phase-out of domestic “unabated coal” power, Reuters says. According to New Scientist, the G7 rejected a proposal from the UK and Germany to lower biofuel production to help ease rising food and fuel prices, but it adds that the two European nations could still make an impact by going it alone on such measures. In a summary of the talks, Politico describes the conclusions as “in some cases…self-defeating and contradictory, such as seeking to lower the prices of oil and gas while simultaneously restating their aims to end the use of fossil fuels”. Bloomberg states that the compromise reached by leaders “shows just how much Russia’s war in Ukraine is causing climate action to come to a standstill”.

Associated Press says the leaders also announced plans to explore steps to cap Russia’s income from oil sales, but Bloomberg reports that Russia is actually getting higher prices for its oil “as strong demand in Asia undermines western powers’ efforts to curb revenues to Moscow’s war machine”. The Financial Times says the proposed cap on Russian oil prices would be imposed via an incentive scheme that the G7 hopes oil-importing countries will sign up to, meaning that if importers want G7 or EU insurance cover and shipping services, they would need to observe the price ceiling.

The Independent reports that the G7 agreed to create a new “climate club” for nations that want to take more ambitious climate action and keep global warming to no more than 1.5C. The move, which it says was championed by summit host Scholz, would involve member countries harmonising their measures and avoiding climate-related tariffs on each others’ imports. According to Politico, the plan “was met with a mix of confusion and curiosity by other G7 partners when it was initially pitched”, but ultimately won through, and in principle is open to any nation that plans to step up its climate efforts.

EU countries reach deal on climate laws after late-night talks
Reuters Read Article

EU countries finalised deals on proposed laws to address climate change following more than 16 hours of negotiations by environment ministers, Reuters reports. It says that they agreed their joint positions on five laws that form the core parts of a broader package of measures to cut the bloc’s emissions by 55% this decade, first proposed last summer by the European Commission (Carbon Brief has a detailed piece examining this package, known as “Fit for 55”). The newswire notes that this deal makes it likely that the proposal will become EU law, as the ministers’ agreements will form their position in upcoming negotiations with the EU Parliament on the final laws. Crucially, Bloomberg reports that the ministers agreed on a contentious 2035 phaseout date for new fossil fuel car sales, after Italy, home to major companies such as Ferrari and Lamborghini, “gave up demands for a five-year delay in the EU’s plan”. Instead, it settled for a “compromise proposed by Germany that could enable the use of carbon-neutral fuels after 2035”. As the news outlet notes, other parts of the package include strengthening the EU Emissions Trading System and bolster its price-control mechanism, and creating a fund to help mitigate the costs of the new cap-and-trade programme for the most vulnerable. Reuters reports on the disputes that took place as ministers tried to clinch the deal. One point of contention was the proposal to introduce costs on polluting fuels used in transport and buildings from 2026, which faced resistance from countries such as Poland who feared it could add even more to soaring energy bills. France, which chaired the meeting, proposed delaying the new carbon market’s launch to 2027 “in a bid to win support from sceptics”.

According to Politico, the EU plan to end the sale of new combustion engine cars by 2035 is “tearing apart” the ruling three-party coalition in Germany, which is home to a large car industry. It links this dispute with the German government’s call for the compromise that means there could be a “loophole for vehicles with engines running on carbon neutral fuels”.

Climate change: UK heading for failure on climate goals – report
BBC News Read Article

Many UK news outlets have reported on the latest progress report from the government’s official advisers, the Climate Change Committee (CCC). BBC News notes that unless policies are “radically improved”, particularly in overlooked areas such as housing and farming, the government is “heading for failure” and will not achieve its target of net-zero emissions by 2050. It says the CCC accused the Department for Environment, Food and Rural Affairs (Defra) of “magical thinking” due to its lack of planning, and noted that “unless policies are radically improved, the government will need to try another tack by persuading people to fly less and eat less meat”. New Scientist notes that a “shocking” failure to insulate homes is “one of the key reasons the UK is set to miss the country’s flagship net-zero target” picked out by the CCC, in its 600-page report to parliament. While the CCC praised the UK’s world-leading climate targets for the coming decade and the government’s attempt to flesh out its plans with last year’s net-zero strategy, reports BusinessGreen, the committee thinks it is performing a risky “high wire approach to net-zero” by failing to drive rapid progress in most sectors. The outlet adds that “credible plans currently only exist for around a third of the emission reductions needed through to the mid-2030s”, according to the new report. Besides home insulation and farming, the Guardian says other key areas identified as problems in the report include transport decarbonisation policies that are still too focused on private cars, and consistent reluctance by the government to ask people to change their behaviour – for example flying less or eating less meat. According to the Financial Times, because not all net-zero policies are likely to deliver as planned, the CCC has recommended that contingency plans are developed. It notes that relying on carbon capture technologies to cover shortfalls would be a “particularly risky” strategy because the government’s net-zero plan “already relies heavily on such technologies”. Reuters notes that the CCC’s report makes more than 300 recommendations to government, many of which would also help the government achieve its aims of curbing soaring energy costs and of cutting reliance on imported Russian fossil fuels. BusinessGreen has an article wrapping up responses from politicians, businesses and campaigners to the report.

Several publications focus on comments by CCC chair Lord Deben about a proposed new coal mine in Cumbria. The Daily Mail reports that prime minister Boris Johnson is heading for a clash with the CCC over these plans after Lord Deben told a press briefing that the proposal was “indefensible”. The newspaper says that this “flies in the face of the prime minister’s recent statement that he wants to supply the steel industry with UK coal”. Bloomberg notes that the CCC thinks the resulting emissions from the mine would “blow holes through the nation’s pledge to reduce emissions by 2050”. The Press Association via the Independent reports that Lord Deben also noted that the coal mine – a decision on which is expected in mid-July – would would damage perceptions of the UK’s leadership on climate change.

The Daily Telegraph opts for a different angle with its reporting of the new outlook from the CCC, focusing on a proposal by the committee that electric cars could be fitted with tracking devices in a pay-per-mile road taxation system, as fuel duty revenues dry up due to petrol and diesel cars being replaced. It says the new report also calls for the cost of renewable projects to be moved from electricity bills into general taxation, “a move it says could cut energy bills by £90”. The i newspaper reports on warnings from industry group the Society of Motor Manufacturers and Traders (SMMT) that without government assistance more than 22,000 jobs in the UK’s car industry are at risk as the nation pivots towards electric vehicles.

Demand for coal heats up in wake of lockdown
The Times Read Article

Coal consumption increased last year in Europe and North America after almost 10 years of declines as economies reopening from lockdowns, according to BP’s annual review of energy, reported in the Times. The review finds that consumption of coal rose by 5.9% in Europe, including a 3.2% rise in the UK, and 13.5% in North America. However, Reuters notes that even as global energy consumption rose by 5.8% in 2021, exceeding pre-pandemic levels, “strong growth in renewable energies chipped away at fossil fuel use”. The newswire notes that the rapid economic recovery also led to a 5.7% increase in emissions from energy use, roughly the same as 2019 levels. Bloomberg says that despite overall fossil fuel use remaining “steady” from pre-pandemic levels, there were “encouraging signs of growth in renewables”, with strong expansion in wind and solar, which accounted for 13% of total power generation.

Meanwhile, Reuters reports that the International Energy Agency (IEA) has warned that major oil-and-gas exporter Norway must do more to prepare for a decline in its dominant industry in the coming decades “as other nations start to free themselves from petroleum dependence”.

Every heatwave occurring today is more intense due to climate change
New Scientist Read Article

There is continuing coverage of a new review paper on the influence of human-caused warming on extreme weather events. According to scientists who pioneered the science of “attribution”, it is “no longer important to use modelling to determine whether a heatwave was made more likely by climate change…because it plays a role in all heatwaves today”, New Scientist reports. According to the Times, the researchers say the impact of climate change on heatwaves is probably being underestimated by insurers, economists and governments. MailOnline also reports on the work, stating that according to the authors climate change is “unequivocally” linked to some extreme weather events such as heatwaves, but its effect on others may be overestimated. It quotes study co-author Dr Friederike Otto of Imperial College London, who said that the impact of global warming on extreme weather events such as droughts was often “overestimated”.

In Japan, Reuters reports that the nation has braced to endure its hottest day yet of a record-breaking June heatwave, with temperatures of around 40C predicted for areas around Tokyo and growing fears about a shortage of electricity to keep air conditioners going. It adds that this heatwave has seen the hottest June in the Japanese capital since 1875. In China, an official has announced that from July to August more extreme weather events are expected across the country following record rainfall in Guangdong, Fujian and Guangxi provinces even as Shandong, Henan and Hebei provinces faced scorching heatwaves, according to Reuters.

Meanwhile, the Independent reports that a team of Met Office scientists have used a rapid attribution methodology to calculate that the chances of June temperatures reaching record-breaking levels in western Europe are 10 times more likely than they were than 20 years ago.

China's Shanxi plans to raise coal output by 107m tonnes in 2022
Xinhua Read Article

China’s “major coal-producing region” of Shanxi plans to raise its annual coal output by “107m tonnes to 1.3bn tonnes” in 2022, reports Xinhua, adding that the move comes as it works to “guarantee energy supply”. The province is also “seeking to increase coal production by a further 50m tonnes” in 2023, bringing its total annual production to 1.35bn tonnes, the state news agency notes, citing a circular issued by the general office of the Shanxi provincial government. Separately, according to data released by China’s National Bureau of Statistics (NBS) on Monday, from January to May in 2022, the total profit from coal mining “increased 1.75 times” year-on-year, and the total profit from oil and gas extraction “increased 1.35 times” year-on-year, reports China Electric Power News.

Meanwhile, an “exclusive” by Reuters says that PetroChina, a Chinese oil and gas company that is the listed arm of state-owned China National Petroleum Corporation, “may sell out from natural gas projects in Australia and oil sands in Canada to stem losses and divert funds to more lucrative sites in the Middle East, Africa and central Asia”, citing “two people with knowledge of the matter”.

Separately, Caixin reports that Shell has announced it has signed a memorandum of understanding with three parties: CNOOC, one of the largest national oil companies in China; Guangdong Development and Reform Commission, a government body; and ExxonMobil. According to the announcement, the memorandum is to cooperate in “pursuing opportunities to build an offshore scale carbon capture and storage cluster research project” in Guangdong, a coastal province of southeast China, the Shanghai-based outlet notes.

Elsewhere, a separate report by Reuters says that China’s Sinopec produced its “first aviation fuel from used cooking oil” at an “industrial-scale” facility in east China, citing the state refining “giant”. Finally, S&P Global Commodity Insights writes that China’s Ministry of Commerce has released “52.56m mt (385.26m barrels) of crude import quotas” to “35 qualifying independent and non-major state-owned refineries” in the “second” batch for 2022, citing sources with those plants on Tuesday. The volume rose “49.2% from the 35.22m mt” allocated in the same batch for 2021, the outlet adds.

Biden administration to hold its first oil drilling lease sales on federal lands
The Hill Read Article

The Biden administration is set to hold lease sales for new oil-and-gas drilling on public lands starting this week, with new regulations for producers, the Hill reports. According to the news outlet, parcels of federally owned land for drilling in seven western states will be auctioned off.  It states that “neither industry nor green groups are particularly pleased with the sales, as industry wanted more land and fewer stipulations while many climate hawks wanted no lease sales at all”. Reuters reports that “Biden had campaigned on a promise to end federal drilling to fight global warming, but has since urged oil producers to rapidly ramp up output to help consumers suffering from record prices at the pumps”.

Meanwhile, in the UK, the Guardian reports that fracking companies are likely to be eligible for tax breaks that could be worth billions, which the government is extending to oil-and-gas companies to encourage new exploration of fossil fuel resources. Finally, the Financial Times reports that UK chancellor Rishi Sunak is “cooling on the idea of a windfall tax on electricity generators” – similar to the one already imposed on oil-and-gas producers – and is increasingly likely to use broader reforms to electricity markets to prevent excess profits in the industry instead.

Germany: Chancellor’s climate reversal
Der Spiegel Read Article

Der Spiegel reports that the German chancellor Olaf Scholz, whose government emphasised at a meeting of the G7 that fossil subsidies “are incompatible with the goals of the Paris Agreement” and whose election posters were emblazoned with “chancellor for climate protection”, made a U-turn in Bavaria. It says that Scholz “advocated closer cooperation with international partners in financing natural gas projects – i.e. for investments in fossil fuels”, adding that he is promoting gas production in Africa. Financial Times reports that Scholz said gas would “be needed for the transition phase” but that Berlin’s climate targets remained intact. “We all agree where the future lies, and it’s not with gas. That’s particularly the case for Germany – we will be carbon neutral by 2045, and that will have consequences for our use of fossil fuels,” he said, according to the FT.

In other news from Germany, Bild reports that a sudden end to gas supplies from Russia would lead to a 12.5% slump in the German economy, according to a study presented by the “Association of Bavarian Business” on Tuesday. Together, this would result in losses of €193bn ($203bn) in six months, adds Bild.

Comment.

A burning question
Editorial, The Daily Mail Read Article

In light of Climate Change Committee (CCC) chair Lord Deben describing plans for a new coal mine in the UK as “absolutely indefensible”, the Daily Mail has an editorial defending the prime minister’s support for the mine. It says that as it stands, the UK’s steel industry relies on Australia, North America and Russia to supply it with coking coal. “So what could be more sensible than opening a coking coal mine in the UK to help fulfil our domestic needs?” it asks. “Other technologies are developing but won’t replace coal for many years. So giving this mine the green light must be the right and logical decision.” [It is worth noting that Lord Deben also pointed out that “80% of what (the Cumbria mine) produces will be exported, so it is not something largely for internal consumption.]

Science.

Quantifying risks avoided by limiting global warming to 1.5 or 2C above pre-industrial levels
Climatic Change Read Article

Human exposure to risks including heat stress, vector-borne diseases and flooding would be reduced by 10-44% globally if warming is limited to 1.5C rather than 2C, new research finds. The authors calculate risk metrics related to the water, agriculture and human health sectors for three climate change scenarios and compare these with projections of global economic damages. They find that, in percentage terms, the avoided risk is highest for river flooding, drought and heat stress, but the absolute reduction in risk is greatest for drought. The authors identify western Africa, India and North America as hotspots for climate change risk in the future.

Extreme weather impacts of climate change: an attribution perspective
Environmental Research Read Article

Heat extremes have increased in likelihood and intensity worldwide due to climate change, with tens of thousands of deaths directly attributable, new research finds. Meanwhile, severe droughts in many parts of the world are not attributable to climate change, it adds. The authors review current knowledge of the influences of climate change on extreme temperatures, heavy rainfall, drought, wildfire and tropical cyclones – and explore the degree to which various impacts are attributable to climate change. They find that many of the impacts of climate change may be underestimated in low- and middle-income countries, due to the limited availability of impact information.

Flood exposure and poverty in 188 countries
Nature Communications Read Article

New research finds that 23% of the world’s population – 1.8 billion people – are directly exposed to 1-in-100 year floods.The authors use state-of-the-art poverty and flood data to present a global estimate of the number of people exposed to high flood risks, and the link between flood risk and poverty. They find that 89% of the exposed people are from low- and middle-income countries, while 1.2 billion live in southern and eastern Asia. Of the 170 million people facing high flood risk and extreme poverty, 44% live in sub-Saharan Africa, the study adds.

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