UN Accord, ex USA, Reached on Biodiversity Protections

After a week of hopes and tensions, international delegates to the UN agreed to a landmark treaty to protect global biodiversity. Key aspects of the agreement include:

• Protection of 17% of land & inland waters globally, up from 13% currently
• Protection of 10% of coastal & marine waters globally, up from 1% currently
• Rules governing how countries share in benefits derived in forests & sea, e.g., drugs developed from genetic material found in Amazon rain forest.
• The US declined to join the biodiversity convention and thus are not a party to this agreement.
• Japan is contributing $2B over the next 3 years to developing countries to help them preserve ecosystems.

Despite those naysayers who argue this agreement falls short of necessary protection levels, the fact that 193 nations were able to agree on such important environmental issues provides a glimmer of hope on the carbon front. Although not obvious from press reports, it's possible that the biodiversity accord may have created common ground and frameworks to tackle the challenge of carbon interdependency. Nevertheless, the absence of the US, in Kyoto like fashion, may only further alienate the US from the international community.

Biodiversity, not Emissions, the Focus in Japan

International delegates gathered this week in Nagoya, Japan, to continue the dialog on global climate issues. The specific focus of this convention was not to debate emissions reductions, but rather to promote the urgency of biodiversity conservation. Because a significant percentage of GDP in poor nations is reliant upon fragile ecosystems such as fresh water, corral and forests, the UN group is discussing potential conservation targets.

In Japan, conservation groups also pleaded with UN representatives to cease geo-engineering projects as they are risky and counterproductive to the focus on emissions reductions and the spirit of conservation. Geo-engineering project proposals have included fertilizing the ocean to create CO2 consuming phytoplankton, injecting seawater into the atmosphere, placing solar reflectors in space, spurring artificial volcanoes and storing carbon dioxide underground (CCS).

This week as well in Japan, Prime Minister Kan restated his country’s opposition to extending the terms of the Kyoto Protocol in lieu of a global climate agreement, as China and allies support such an action.

Other carbon articles of note:

· Mexico’s Foreign Minister says conditions not met for a climate deal in Cancun later this year.

· Achieving carbon emission targets is stretching Mexico financial resources without the specter of international aid.

· Europe on track to meet Kyoto emissions targets, but emissions from imported goods up 40%. Highlights the environmental and moral hazard of regional carbon regimes.

· Czech president claims climate change is not a threat or result of man.

· Canadian provinces seriously concerned about outcome of California’s Prop 23 vote.

Memoirs from Tianjin - Are We Moving Backwards?

Climate negotiators reconvened in Tianjin, China this past week in the hopes of healing the growing divide between industrialized and developing nations leading up to Cancun in December. Secretary Figueres pleaded with nations to find common ground even for a non-exhaustive agreement, and the UNFCC claimed that progress was made by week’s end. However, this rosy view is mostly spin and hopeful language from the UN as 3 major challenges lurk as large as ever – Kyoto expiration, BASIC emissions trajectory and technology transfer.

Finger pointing in the aftermath seems to be reaching new heights. US Envoy Todd Stern directed harsh words toward China suggesting that the world’s largest emitter is treating the Copenhagen as purely informational and merely exemplary actions to take place. Contrarily, China is blaming the richest countries for not committing to drastic enough cuts and for attempting to renegotiate the terms of Kyoto. China does not plan to set an emissions peak any time soon, but it is claiming near victory on its 5-year goal to reduce energy consumption per unit of GDP by 20%.

Other carbon articles of interest:

· The US vocalizes ambitions for “logical” US-India climate & technology coalition as Chinese relations flounder.

· Obama suggests passage of energy reform may come in form of multiple pieces of legislation. A patchwork solution to patchwork regulation ...

· New deforestation framework may be one of few agreements to result from Cancun.

· UN’s Figueres calls for grassroots movement to force global treaty. (Recall 2 weeks ago she was asking business to sway their governments too.)

· Political wavering on Australia’s carbon tax plan.

· Island nations drowning from international gridlock on climate change.

Lowering Expectations for Cancun - Why Am I Not Surprised

Large developed and developing companies met this past week in New York City at the Major Economies Forum to discuss the components and prospects of a successful climate deal. Some are blaming the US’s inability to pass domestic climate legislation, but few are hopeful, including US climate envoy Todd Stern, that “in any way [there will be] a legal treaty to be done in Cancun this year” at the December meetings. However, Stern is standing by the US’s pledge to cut GHG emissions by 17% by 2020 compared to 2005 levels.

In the most recent attempt to yield US legislative progress, Senators Bingaman (D-NM) and Brownback (R-KS) have proposed the Renewable Energy Promotion Act, which includes a 15% renewable generation standard (including efficiency), in the hopes of passing such during the lame duck session post the November elections.

Elsewhere in NYC at the launch of the Carbon Disclosure Project’s Global 500 and S&P 500 report results, UN climate chief, Christiana Figueres, suggested that strong support for a climate treaty from businesses lobbying their governments is essential to progress. She cited the huge appeal of certainty and business opportunities for corporations the world over. An article from the Huffington Post warns about allowing business to lead on climate change regulation.

• George Soros calls for trillions in private financing to combat climate change rather than relying on government supp
• China and India should have legally binding emissions targets, suggests US envoy Stern.

The Slow Plod to Cancun - Will Business Lead Government?

Here are the latest carbon soundbytes of the last few weeks:

· Leaders of global energy companies convened at a conference in Montreal to discuss the state of current carbon / climate negotiations. Former chief UN climate negotiator, Yvo de Boer, was a keynote for the event. He encouraged the industry to support a binding global treaty, including market-based mechanisms. Of no surprise, energy companies desire an environment with certainty in order to make long term investment decisions.

· Leaders from 17 major economies will meet this Monday & Tuesday in New York City to discuss climate change and clean energy. The meeting is part of Obama’s The Major Economies Forum, which facilitates dialogue between the most influential developed and developing economies.

· The UN climate negotiator, Christiana Figueres, supports a shift in emphasis to CDM projects promoting renewable energy, energy efficiency and transportation, rather than industrial projects cutting hydrofluorocarbons, which have accounted for half of CDM emission reductions to date.

· Australia’s prime minister, Julia Gillard, was pleased by BHP Biliton’s proposal of a domestic carbon tax. This renewed interest in carbon legislation comes after the former PM fell out of favor as he attempted to pass a cap-and-trade scheme.

Most Agree on Need for Climate Finance, But from Where?

Since Copenhagen, there has been little constructive movement in negotiations regarding emission reductions by developed and developing nations. If anything, some developing economies are “backtracking” by demanding more “new” money while others are suggesting carbon reduction requirements only apply to developed nations, says US lead climate negotiator, John Pershing.

The tone of meetings in Geneva, Switzerland, this week has been of productivity on the climate finance front. To refresh, wealthy nations agreed in Copenhagen to fast-track $10B a year between 2010 and 2012. This appears to be “found” money already, but potentially not “new” since Japan had already committed $15B to the cause prior to Copenhagen. The bigger challenge and focus is on achieving $100B of climate aid annually by 2020. While a mix of private and public funding sources is expected, the method of accumulated such substantial amounts is very much in debate as is the identity of the administering body for the funds. Developing countries are adamantly opposed to the World Bank allocating the monies; rather, they support an entity such as the UNFCC.

Negotiators and pundits have suggested potential funding source such as a carbon tax, airplane fare levies and fees on carbon credit trading. Unfortunately, private investment in carbon reduction projects producing carbon credits declined 54% in 2009 because of uncertainty about the existence and value of carbon reductions post-Kyoto. Therefore, it will be difficult to agree on and identity financing sources, if carbon credit fees are utilized, without the specter of a ratifiable global carbon accord.

Other Carbon News:

· Infamous "skeptical environmentalist” Bjorn Lomborg alters his stance on climate change in a new book, suggesting climate change is “undoubtedly one of the chief concerns facing the world today" and a "challenge humanity must confront." Lomborg also supports substantial funds to secure climate solutions, including geo-engineering, as long as these funds are spent wisely.

· Senator Harry Reid (D) hopes to find some Republican votes for an energy bill after the November elections.

Sell [Carbon Agreements] in May and Go Away

Since our last column, the future for global carbon unfortunately has not turned a corner. Negotiations on the international level are slow leading up to the year-end Copenhagen repeat in Cancun. A recent session in Bonn proposed optimism for country specific commitments on financing, technology transfer and capacity building and adaptation plans for the poorest countries.

In the US, any hope for federal legislation involving cap-and-trade have all but vanished as Obama’s and sympathetic democrats’ political capital seems to have been fully utilized on issues of health care, financial reform and even immigration. Chances of legislation passing with any carbon cutting teeth before, or even after, the November elections appear unlikely, due to or despite of Sen. Kerry’s beltway compromises.

Meanwhile, several European governments are reducing renewable energy investment incentives in the coming year. These subsidies have successfully impacted the carbon content of the generation mix in the already lower-carbon intensity region, as well as aiding the growth and maturation of the renewable energy industry.

In our country, state-enacted renewable portfolio standards may prospectively contribute to a lower carbon future (see largest utility generator of renewable energy, NextEra Energy) in lieu of federal mandates.