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Daily Briefing |

TODAY'S CLIMATE AND ENERGY HEADLINES

Briefing date 05.10.2022
Germany′s Scholz defends energy support plan as ′justified′

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News.

Germany′s Scholz defends energy support plan as ′justified′
Deutsche Welle Read Article

Germany’s chancellor Olaf Scholz has defended his government’s multi-year €200bn energy support package saying it is “justified” and that similar steps were being taken elsewhere, reports Deutsche Welle. The outlet adds: “The ‘defensive shield’ includes a gas price brake and a cut in fuel sales tax. It is aimed at protecting businesses and households from the impact of rising energy prices.” But following criticism from some EU partners, German finance minister Christian Lindner has sought to reassure his counterparts at talks in Luxembourg yesterday, it notes, quoting him saying: “There had been a misunderstanding…Our package…is proportionate if you compare the size and the vulnerability of the German economy.” Politico says “Scholz’s blinkered focus on German rather than EU priorities in the energy crisis is blowing up on European Commission president Ursula von der Leyen, whose all-important French and Italian commissioners are now breaking ranks to cry foul about Berlin’s behaviour.” It adds: “Facing heavy pressure from industry and consumers – and voters in regional elections in Lower Saxony on Sunday – Scholz is taking a go-it-alone approach to pouring up to €200bn into the German economy to help cushion the impact of soaring energy prices. That huge cash injection sparked howls of protest from the Italian and French commissioners to the EU, Paolo Gentiloni and Thierry Breton, putting von der Leyen’s Commission in the excruciating position of having to distance itself from two of her most senior officials, from the bloc’s second-biggest and third-biggest economies.” An editorial in the Financial Times argues that Germany’s “double ka-boom” is “clearly a challenge to the EU unity that Vladimir Putin seeks to undermine”.

Separately, Reuters reports that Germany’s largest power producer RWE has announced it is “bringing forward its coal phase-out by eight years and is ready to end lignite-based electricity generation in 2030 as part of a deal reached with the government”. (RWE owns more than a quarter of Germany’s remaining coal-fired power stations.) Politico carries a news feature headlined: “Germany’s coal exit deal pits Greens against climate activists.”

Meanwhile, EurActiv reports that “EU finance ministers reached a deal on Tuesday (4 October) to raise €20bn from the bloc’s carbon market to support the transition away from Russian energy, opening the way for talks with the European Parliament to finalise the plan”.

UK power companies threatened with legislation to limit revenues
Financial Times Read Article

The Financial Times says that “UK government has threatened energy companies with a cap on the revenues they make from sky-high wholesale power prices – unless they strike voluntary deals with the state”. It continues: “Prime minister Liz Truss’s government has been in talks with renewable and nuclear energy generators for weeks about how to reduce wholesale power prices, which closely track those of natural gas. The government has been hoping to persuade electricity generators to agree voluntarily to 15-year fixed price contracts well below current wholesale rates for their output as a first step towards wider market reform…The fixed price agreements are partly designed to replace agreements previously used by the government to incentivise renewable energy that reward generators with a subsidy on top of wholesale rates. These legacy ‘renewables obligations’ have led to some energy companies making huge profits as wholesale electricity has followed gas prices and risen to record levels since Russia’s invasion of Ukraine…The government is keen to have a deal with generators in place in time for winter, according to three people involved in the discussions. But negotiations have been complicated by the fact that most energy companies have already sold in advance significant proportions of their expected production for the next two years, and would incur severe financial penalties to unwind those agreements with customers…Some electricity generators have privately expressed the view that a windfall tax on profits…would be preferable to a compulsory limit on wholesale prices.”

Meanwhile, another Financial Times story reports that “Britain could end up locked in expensive long-term energy deals under proposed arrangements to secure gas from countries including Norway and Qatar, Treasury officials have privately warned”. The article adds: “Senior government figures told the Financial Times that the UK would have to pay a ‘security premium’ to foreign states in return for boosting the country’s future energy security, alongside other measures to increase domestic production…About half of the gas used in the UK comes from abroad, with Norway accounting for two-thirds of imports last year. Long-term gas supply contracts can typically run from 10 to 25 years, meaning the UK could end up paying elevated prices for years to come – even if the wholesale price were to drop in the future.” The Sun says: “Liz Truss could borrow billions of pounds more to sign a 20-year-long gas deal with Norway. In a move which risks spooking nervous markets even more, the PM admitted ministers are eyeing up a mega deal to help shore up supplies for years to come.” The Times adds: “Ministers are in talks with Norway and Qatar to enter into long-term gas contracts in a gamble that could leave consumers facing higher energy bills for years to come.”

Separately, the Guardian carries the views of outgoing Shell chief executive Ben van Beurden, who says governments may need to tax energy companies such as his to fund efforts to protect the “poorest” people from soaring bills. Sky News also has the story.

Liz Truss will go to climate summit COP27 next month – but without King Charles
The Sun Read Article

The Sun reports that, contrary to earlier reports, Liz Truss will now attend COP27 in Egypt – despite reportedly “advising” that King Charles should not go. The newspaper says: “Despite claims from critics that she would ditch BoJo’s [Boris Johnson’s] green agenda and could water down her policies, the PM will go to Egypt next month. Insiders previously thought she would make the G20 international conference in Bali her main event on the world stage, where she will press the flesh with leaders. But now she is set to stop off in Egypt as part of her international efforts.”

Separately, the Times reports that “Truss has been urged by one of her cabinet ministers to attend next month’s crucial COP27 climate summit and to let the King do so too, in the latest sign of growing divisions at the top of government”. It adds: “[COP26 president Alok] Sharma said that he hoped there would be a rethink on the King’s presence at the environmental meeting. ‘I would certainly welcome the king’s attendance at COP27. I know that many people around the world see him as a leader in this area,’ he said.” BBC News also carries the story: “Sharma said the King had championed the environment for decades and other countries wanted him to attend…[He] told BBC Radio 4’s The World Tonight programme: ‘He is head of state in the UK, but he is also head of state in other countries, some of which are very much on the front line of climate change.’”

Meanwhile, in other COP27 news, Reuters reports that “about 90 heads of state” have confirmed their attendance at the conference. A senior Egyptian official has said that topics for the leaders’ roundtables held on 7-8 November at COP27 would include the “development of green hydrogen, water and food security, achieving a just energy transition towards renewables, and vulnerable communities”. Finally, BBC News says that climate activists are “baffled” over Egypt’s decision to have Coca-Cola – a “major plastic producer” – sponsor COP27. The Guardian also covers the story.

Rees-Mogg attacks ‘idiotic’ green levies on UK steel industry
The Daily Telegraph Read Article

There is widespread coverage in the UK media of developments at the Conservative party conference taking place in Birmingham, with new business and energy secretary Jacob Rees-Mogg seemingly acting as a one-man news generator. The Daily Telegraph says that he “launched a stinging broadside against ‘idiotic’ green levies that put Britain’s steel producers at a disadvantage to foreign competitors, in a strong hint that the business secretary could scrap the taxes”. (Steelmakers are already compensated for the vast majority of these costs and the government has been consulting on going further.) The Daily Mail reports that Rees-Mogg has “suggested” that living near a nuclear power plant means residents should get free electricity. The Guardian carries the contents of leaked emails from Rees-Mogg’s department showing that “ministers are actively examining ways to evade legal, environmental and public scrutiny of new oil and gas projects including fracking”. A separate Guardian article visits Rees-Mogg’s neighbourhood in Somerset to ask locals what they make of his comments this week that he’d support fracking in his “back garden”. The newspaper says locals “fail to share” his enthusiasm. Relatedly, Deeside.com reports that “a petition to prevent fracking on the Wirral side of the Dee Estuary has been signed by nearly 60,000 people in just five days”. And the Daily Express says that “new polling has found a majority of Britons have said that they would be proud to vote for a party that boosted renewable energy in the UK…[while] only 29% of those surveyed said that they would be proud to vote for a party supporting large-scale fracking in the UK, while 48% said they would be ‘embarrassed’ by such a policy”.

Separately, the Daily Express carries comments made by the minister for development Vicky Ford at the Conservative conference in an article headlined: “Aid is critical in climate crisis.” She said that the UK needs to ensure the “eyes of the world” remain on the countries worst impacted by climate change.

Finally, DeSmog has been out and about at the conference investigating the influence of fossil-fuel and climate-sceptic lobbyists. Yesterday, it attended a a panel on fracking run by Net Zero Watch, “the campaign arm of the Global Warming Policy Foundation, the UK’s main climate science denial group”. DeSmog says it “drew an audience of about 10”. Another DeSmog article is headlined: “PR firm with deep ties to big oil is a major presence at Tory conference.”

Pakistan out of money for flood recovery, UN boosts aid request – minister
Reuters Read Article

Reuters reports the comments of Pakistan’s climate change minister Sherry Rehman, who says the country is “out of money” to spend on recovery from devastating floods. Her comments come as the UN “ramped up five-fold” – $160m to $816m – its aid for the nation. “We have no space to give our economy a stimulus package, which would create jobs, and provide people with the sustainable incomes they need,” the newswire quotes Rehman telling a conference in Geneva aimed at seeking aid for Pakistan. The newswire says she urged the developed world to accelerate funding for the ongoing domestic climate-linked disaster, terming it “the meta-climate event of a century”.

Separately, Reuters covers comments made by Cardinal Michael Czerny, a Canadian who heads the Vatican’s development office, who said yesterday that recent extreme weather events, such as the hurricane that devastated parts of Florida, show that the time for climate change “scepticism and denial” is over. He said: “The time is over for speculation, for scepticism and denial, for irresponsible populism. Apocalyptic floods, mega droughts, disastrous heatwaves, and catastrophic cyclones and hurricanes have become the new normal in recent years; they continue today; tomorrow, they will get worse.”

Meanwhile, Bloomberg reports that a “landmark $8.5bn deal to help wean South Africa off its dependence on coal is hanging in the balance amid fraught negotiations with rich donor countries over how the funds should be spent”. It adds: “The climate finance deal, unveiled at UN-led talks in Glasgow last year, was hailed as a prototype for helping other coal-dependent developing countries transition to cleaner energy sources. Its success or failure could have a knock-on effect at next month’s COP27 summit in Egypt, which is expected to focus on the financing needs of poorer countries adapting to a warming atmosphere.” One of the factors hampering the deal, says Bloomberg, is “concern about the UK’s commitment given the recent change in leadership and radical changes to economic policy that have shattered confidence in its currency and government bond markets”. It quotes Jake Schmidt, senior strategic director of the international climate program at the Natural Resources Defense Council, who says there are “legitimate concerns about whether or not the UK actually has money”. He adds: “The underlying question is does this new government want to continue to put money into international climate stuff and will they stick to their end of the bargain.”

Japan moves to fill Asia’s $40tn energy funding gap in China’s stead
Financial Times Read Article

Japan is “ready to exploit a sharp decline in China’s overseas lending” by “helping” Asia-Pacific countries “address the $40tn cost of combating climate change”, says the Financial Times. It adds that Japan’s “efforts to take the lead in rulemaking for green financing in Asia” come amid “a global debate about how quickly countries should shift to cleaner forms of energy in the wake of the war in Ukraine and the energy crisis”. Pakistan, which has been “devastated by floods linked to climate change”, has “received long-term financing under China’s Belt and Road Initiative as well as emergency loans from Beijing” in recent years, the outlet says, adding that the country said it “would welcome Japanese investment if it provided competitive pricing for its projects”.

Meanwhile, CNBC says that China’s dual “ambitions” of carbon peaking and neutrality are “spawning companies that could one day become global leaders in their fields”. It adds that, according to analysts, Beijing’s “top-level emphasis on climate has fuelled a policy push to try to support businesses focused on renewable energy and reducing carbon emissions”. Separately, China Energy News, a state-run industry newspaper, carries an article on the decarbonisation of the country’s petrochemical industry, based on the views of Sun Lili from the Chinese Academy of Engineering.

The South China Morning Post reports on a study led by Chinese researchers which has “documented the relationship between coal production and China’s methane emissions, highlighting the importance of integrating policies to reduce the harmful gas into the nation’s climate targets”. The outlet adds that reducing its methane emissions in this decade will be “critical if China is to achieve its climate target of carbon neutrality by 2060”. Methane emissions reduction is also one of the “key issues China and the US have agreed to cooperate on to combat climate change”. China Dialogue has an article titled: “Methane, a threat and an opportunity.” Its author, Catherine Early, says: “Marcelo Mena, chief executive of the Global Methane Hub, points out that China has a bilateral agreement with the US that includes action on methane. However, cooperation has been frozen since August due to disagreement between the two over Taiwan.” Additionally, Xinhua reports that UN secretary-general Antonio Guterres said on Monday “called on all countries to make climate action the global priority”.

Elsewhere, Bloomberg reports that Bank of China International sees gas “as the star performer in an otherwise bleak commodities outlook, with zinc and aluminium offering the best prospects among metals”. Finally, Reuters notes that Chinese refiners are “likely to boost refined oil products exports” in the last two months of 2022 and into early 2023 after “receiving the biggest allocation from Beijing” this year, citing trade sources and analysts.

US: Senate liberals press Biden for climate emergency declaration
The Hill Read Article

In the US, the Hill reports that a “group of eight Democratic senators are renewing a push for President [Joe] Biden to declare a national climate emergency, saying the idea would ‘build off’ recent legislative victories”, such as the Inflation Reduction Act (IRA). The letter from the senators has been signed by prominent climate-action advocates such as Sheldon Whitehouse, Ed Markey, Elizabeth Warren and Bernie Sanders. They write: “We will only achieve these targets if you build off the momentum of the IRA with strong executive action. We urge you to take the important next step of declaring a climate emergency and unlocking the full tools at your disposal to address this crisis…A president’s emergency powers should not be used wantonly. What we cannot afford, however, is to shy away from tackling the climate crisis just because President Trump misused the National Emergencies Act. If ever there is an emergency that demands ambitious action, climate chaos is it.” The Hill says the White House has not yet responded to the letter.

In other US news, the Guardian says that, according to state officials, “California has witnessed its three driest years on record and the drought shows no signs of abating”. Following the damage caused by Hurricane Ian in Florida last week, the New York Times carries an article headlined: “Florida leaders rejected major climate laws. Now they’re seeking storm aid.” And the Financial Times reports that “Saudi Arabia is seeking to raise oil prices at a crucial meeting in Vienna, in a move set to anger the US and aid Russia”.

Comment.

The Tories have led on climate – until now
Pilita Clark, Financial Times Read Article

Writing in the Financial Times, columnist and former environment correspondent Pilita Clark says: “In her first chaotic weeks in office, Liz Truss has taken steps that have rattled those Tories who have been rightly pleased that their party has been a climate leader among the global centre-right…What almost no one saw coming though was the decision to order a review of how the UK’s net-zero commitments are delivered…And while the inquiry is being led by a staunch net-zero advocate, MP Chris Skidmore, who says it ‘100%’ won’t lead to the goal being delayed or ditched, it will still have consequences for the very sectors it is supposed to benefit…Truss’s review is due to report by the end of December. Let’s hope it is worth the cost of waiting even longer for action on a threat that grows more evident every year.”

In the Times, senior property writer Martina Lees argues: “With the billions we’re spending on caps and tax cuts and rebates, we are renting our future. We should invest in it – in insulation, clean heating and renewable energy for every home.”

Somalia drought: The fight for survival as famine looms
Andrew Harding, BBC News Read Article

In a special report that led BBC News at Ten last night, Andrew Harding, the BBC’s Africa correspondent, reports from Baidoa in Somalia, where the country’s worst drought in 40 years is causing a major famine. He says: “A succession of droughts, turbo-charged by climate change, is now threatening to end a pastoral way of life that has endured for centuries across the Horn of Africa.” He opens with the story of Fatuma Omar, whose second son died of starvation two weeks ago. She tells Harding: “I cannot grieve for my son. There is no time. I need to find work and food to keep the others alive.”

Meanwhile, Henry Fountain, a climate reporter, and Saumya Khandelwal, a photographer, have travelled across India to examine the causes and consequences of its changing monsoon for the New York Times. They write: “South Asia’s monsoon is inextricably linked, culturally and economically, to much of Asia. Climate change is making it increasingly violent and erratic”. Graphics in the piece show the current pattern of India’s monsoon, indicating why and where the rainfall will intensify as the climate warms. (See this recent Carbon Brief guest post for more on how the south Asian monsoon is changing in a warming climate.)

Science.

Observed changes in China’s methane emissions linked to policy drivers

New research finds an “unexpected” increase in methane emissions from rice cultivation over east and central China – a factor not currently accounted for in current emission inventories. The authors use satellite and surface observations to quantify the country’s methane emissions over 2010-17. They find contrasting methane emission trends in different regions, due to “China’s energy policy of closing small coal mines (decreases in south-west) and consolidating large coal mines (increases in north)”. The paper concludes that recent changes in China’s methane emissions are linked to energy, agricultural and environmental policies.

Circum-Arctic release of terrestrial carbon varies between regions and sources
Nature Communications Read Article

The Eurasian Arctic releases five times more terrestrial carbon than the American Arctic, according to new research. The authors use the “Circum-Arctic Sediment Carbon Database” – which is based on carbon isotope and carbon accumulation data – to reveal differences in terrestrial carbon release from soils and permafrost across the Arctic. They find that 61% of terrestrial carbon release across the Arctic comes from near-surface soils, while 30% stems from Pleistocene-age permafrost.

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