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With joint action plan, US and Mexico walk the walk on energy and climate

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When President Obama joined Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto in Ottawa last month at the North American Leaders’ Summit to announce ambitious goals on climate and clean energy, EDF President Fred Krupp said that “implementing them will be the true measure of success.”

Today, the United States and Mexico took important next steps towards successful implementation, announcing new details on how the two countries will work together to:

  • curb emissions of methane, a potent greenhouse gas responsible for a quarter of today’s warming, by reducing emissions from the oil and gas sector by 40-45% by 2025;
  • expand clean energy to meet the goal of 50% electricity generation from zero-carbon sources by 2025;
  • promote residential, commercial, and industrial energy efficiency; and
  • align methodologies for estimating the social cost of carbon, a key input into understanding the benefits of reducing carbon pollution.

If the June announcements were the poetry, today’s announcements were the prose — but they are no less important for it. The work plans, workshops, technical dialogues, and regulatory processes laid out in today’s announcement are the nuts and bolts of effective governing. Just as important, the concreteness and specificity of these plans give a clear signal of the countries’ strong commitment to getting these things done.

The two countries also reaffirmed their commitment to work together in the International Civil Aviation Organization (ICAO) for the adoption of a robust market-based measure to limit emissions from international aviation, and to join the Paris Agreement and support its entry into force this year.

Today’s announcement provides yet another illustration of the growing importance of North American leadership on climate and clean energy — one of many recent bright spots in climate action.

The concreteness and specificity of these plans give a clear signal of the countries’ strong commitment to getting these things done.

And it’s not hard to see why. Canada and Mexico are two of the U.S.’s top three trading partners. By advancing together, the three countries can reap the full economic and environmental benefits of a clean energy economy, creating opportunities for clean energy entrepreneurs, low-carbon investment, and sustainable economic development across the continent.

Today’s announcement is a particularly strong signal from Mexico, which — with a well-earned reputation for climate leadership on the international stage — must still demonstrate how domestic policy will match those ambitious targets. Indeed, Mexico itself has much to gain from following through. With a historically oil-dependent economy, the country is already feeling the fiscal pinch of rock-bottom global oil prices. Combine that with the enormous untapped potential and newly opened market for renewable energy generation, and pathway is clear to major opportunities for economic growth through low carbon energy and efficient production.

The path to shared global prosperity is a low-carbon path. By moving from the bold type of headline announcements to the finer print of detailed workplans, the U.S. and Mexico just took a meaningful step in that direction.

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True crime is jeopardizing the future of the Amazon, but indigenous groups and Brazil’s police are fighting back – together

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Indigenous groups and law enforcement in Brazil are working together to reduce illegal mining and logging in the Amazon. About 80% of Amazon timber is produced through illegal extraction, which degrades biodiversity and carbon stocks. Photo: © Brasil2 / istockphoto.com

A new operation against land grabbers and illegal loggers in Brazil’s state of Pará is showing how collaboration between indigenous and forest communities and law enforcement can take on the biggest ongoing threats to the Amazon forest: illegal logging and illegal deforestation for land grabbing.

Launched June 30th, the operation started with an investigation two years ago after leaders from the Kayapô indigenous group reported clandestine deforestation on the western border of their territory to the Brazilian federal environmental enforcement agency, IBAMA. 

Guided by the Indians, IBAMA agents discovered encampments of workers who were clearing the forest in the indigenous territory and on adjacent public land, while leaving the tallest trees; this hid the illegal deforestation from satellite monitoring. The workers, who according to police labored under semi-slave conditions, would then burn the understory and plant pasture grass. Meanwhile, another part of the gang surveyed and forged land registry documents to sell the land. IBAMA agents shut down the camps, detained personnel and issued fines – and brought in the Prosecutor's Office and Federal Police to investigate.

We can protect the Amazon from degradation and deforestation. Both problems have the same solution.

That investigation led to an impressive 24 arrest warrants, nine subpoenas, and 18 orders for search and seizure, in five states, in what Federal Police, Prosecutor’s Office, Internal Revenue Service and IBAMA call the biggest illegal deforestation and landgrabbing mafia in the Amazon. Several of the gang’s leaders have already been imprisoned and face tens of millions of dollars in fines – as well as, potentially, stiff jail sentences.

The gang’s operation shows how the illegal value chains work.

First, the operators deploy semi-slave labor to invade reserves or occupy public land not designated for any particular use. They extract the highest-value hardwoods, then slash and burn the forest, and plant pasture. Meanwhile higher-up gang members draw up fraudulent documentation and sell the land to investors. The bosses of this high-tech organized crime enterprise run the “ranches,” coordinate a marketing group, hire surveyors and remote sensing specialists, and use family networks to launder illegal revenue. Prosecutors estimate that the group had revenues of almost $600 million between 2012—2015.

Organized criminal enterprises like this one are behind most if not all of the high-value illegal activities in the Amazon frontier zone – illegal logging, use of semi-slave labor, illegal deforestation for land grabbing and fraudulent sales, and tax evasion in the approximately 30% of the region under near-term threat of destruction or degradation.

Taking down a gang like the western Pará outfit is better than a two-for-one deal.

Operation Flying Rivers

The now-formalized program that just launched – a joint effort of Brazil’s Federal Police and the Federal Prosecutor’s Office – is called “Operation Flying Rivers,” after the huge quantities of water vapor the Amazon forest releases into the air, responsible for rainfall regimes as far away as California, which by some estimates approximates the volume of water flowing in the Amazon river.

The program is a good example of how effective collaboration between local forest communities and government authorities can be. And “Flying Rivers” goes way beyond stopping a particular invasion here, or apprehending some timber there; it aims to take apart the command structure of an entire criminal enterprise with multiple illegal value chains extending over much of western Pará.

This kind of persistent, integrated, multi-agency, enforcement campaign is central to addressing the real causes of continuing illegal deforestation and forest degradation, as well as land fraud – and critical to establishing the forest governance needed for long-term sustainable use of forests, including at-scale economic incentives for stopping legal deforestation and finance for eliminating illegal forest clearing through carbon markets and other sources.

Deforestation in Brazil

Brazil has made huge progress in reducing deforestation – but momentum has stalled. Since 2011, deforestation has been hovering around 5,000 km²/yr – not heading for zero, as an increasingly solid scientific consensus advises. This is way less than the 19,500 km²/yr average from 1996—2005, but still much too much. And, in lawless frontier regions, like southwestern Pará, illegal logging is degrading biodiversity and carbon stocks over vast areas.

It is generally held that about 80% of Amazon timber is illegally extracted, with the lion’s share sold in Brazil. That is about the same proportion of the Amazon’s current deforestation estimated to be illegal.

But you only have to look at the satellite photos to see why indigenous territories and other kinds of protected forest areas have been so important to Brazil’s success in reducing Amazon deforestation over 70% in the last decade, making it the world leader in reducing greenhouse gas pollution.

Kayapô, Panará indigenous territories and Xingu Indigenous Park (dark green), with fires and smoke plumes on their borders. Indigenous territories and protected areas are effective barriers to deforestation and fires.

Kayapô, Panará indigenous territories and Xingu Indigenous Park (dark green), with fires and smoke plumes on their borders. Indigenous territories and protected areas are effective barriers to deforestation and fires. Photo: NOAA satellite.

EDF’s partners in the Xingu River basin – indigenous and traditional forest communities, including the Kayapô and 17 other indigenous peoples – monitor and defend a continuous area of protected forest more than twice the size of New York state. They have mobilized a lot of successful enforcement operations to stop illegal logging and land grabbing, including the “Flying Rivers” program.

This is why the law enforcement operation launched in Pará is so important and promising.

We can look at it as a version of “bad money drives out good” – no legitimate forestry or agricultural enterprise can compete with unrestrained organized crime. “Flying Rivers” is an excellent example of what’s needed to level the playing field. We can protect the Amazon both from degradation and from deforestation. Both problems have the same solution.

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A bright spot amid Brexit? Growing momentum for global climate action.

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A new era of climate leadership: Mexico, Canada, and the U.S. announced major joint commitments on climate and clean energy on June 29, 2016. Image Source: Presidencia de la República Mexicana

Last week’s vote by the British to leave the European Union has triggered a crisis in political leadership, thrown financial markets into turmoil and prompted eulogies for the European project – even as the ultimate consequences of the vote remain uncertain.

Against that backdrop, a bit of good news may be welcome. And it comes from an unlikely quarter: climate action.

That may sound surprising at first since climate change was hardly a high-profile issue in the Brexit campaign. Voting on the referendum reflected concerns about inequality, immigration, globalization, multiculturalism and an out-of-touch political elite.

Even so, the prospect of the United Kingdom’s departure has raised concerns about impacts on climate and energy policy, including possible delays in finalizing the EU’s 2030 emissions target.

But whatever the implications may be for Britain and the EU, one thing is clear: Brexit can’t derail the overwhelming global momentum on climate action that produced the Paris Agreement.

The Paris Agreement: Strength in numbers

A British exit from the EU would not have any effect on the formal architecture of the agreement, which was approved last December by more than 190 countries and has been signed by 177 – including each of the EU member states.

Given that overwhelming support, the agreement may very well enter into force this year – something that will happen once at least 55 countries representing 55 percent of global emissions formally join the agreement.

To date, 50 countries representing more than 53 percent of global emissions have formally joined or committed to join the agreement this year — closing in on the threshold of 55 countries and 55 percent of emissions needed for the agreement to enter into force. As a result, the agreement may well enter into force as soon as this year, even without the EU (which was not expected to join the agreement this year in any case).

This signals a remarkable shift. A decade ago, Europe was the world’s indispensable leader on climate action – and even temporary uncertainty about the pace of progress in the EU would have had repercussions around the globe.

The Paris Agreement, however, was the culmination of a paradigm shift away from a model of “top-down” climate action concentrated in a handful of countries, and toward more a more decentralized and inclusive approach.

As climate action has become much more broad-based, it has also become more resilient.

Climate leadership beyond the EU

That is not to say that leadership on climate from both the U.K. and the EU is not vital; it is, and will continue to be. Taken as a whole, Europe is still the world’s third-largest emitter. It remains a powerful and valuable voice for ambition.

Fortunately, political support for climate action in the region remains high, with 60 percent of Europeans saying global warming is already harming people around the world.

But we are long past the days when climate progress depended on one bloc of countries. Just consider this:

  • The leaders of the three North American countries met today to announce greater cooperation on climate change – including major new commitments on clean energy and on methane emissions from oil and gas.
  • Under the leadership of President Obama, the United States is now a global leader on climate action, with U.S. emissions in 2014 at 9 percent below their 2005 level, and an ambitious target of reducing emissions between 26 and 28 percent by 2025, relative to 2005.
  • President Xi Jinping of China has made tackling climate change a priority, with a commitment to ratify the Paris Agreement this year, a pledge to peak China’s emissions by 2030, if not before; and a plan to institute a nationwide emission trading program as early as next year.
  • The unprecedented bilateral cooperation between the U.S. and China, culminating in the joint announcements on climate change made by Presidents Xi and Obama in November 2014 and again in September 2015, were a crucial step in laying the foundation for success in Paris.
  • Brazil – although currently engulfed in political turmoil of its own – has reduced emissions over the past decade more than any other country, thanks to the enormous success of its Amazon states in curbing tropical deforestation.
  • India, where the moral imperative of poverty alleviation remains paramount, is committing to renewable energy and experimenting with new models of low-carbon development.

Other factors driving momentum

Underlying these country-level shifts are more fundamental drivers. The impacts of climate change are becoming increasingly more visible, in record temperatures and extreme weather events.

A clean energy revolution is underway: Wind power is competitive with coal in much of the world even without subsidies, the cost of solar panels has dropped 75 percent in less than a decade and new technologies for how we use and store energy more efficiently are transforming markets.

Meanwhile, leading companies are stepping up by reducing their carbon footprints, greening their supply chains and calling for policies such as a price on carbon.

In short, leaders around the world have come to the realization that the path to shared global prosperity is a low-carbon path.

That makes the politics of climate action more resilient now than they ever have been before. And that is good news to keep in mind in these uncertain days.

This post originally appeared June 29 on EDF Voices.

Also posted in Europe, UN negotiations, United States| Leave a comment

California carbon market's latest auction results show continued resilience

Source: Wiki

May 2016 auction results show an ongoing lawsuit challenging California's cap-and-trade program’s allowance auctions is likely impacting market dynamics, but the market is proving resilient. Image Source: Wikipedia

The results of California and Quebec’s latest carbon auction show that an ongoing lawsuit challenging the cap-and-trade program’s allowance auctions is likely impacting market dynamics, but that California’s market is proving resilient, in part due to the strength of its design.

The May 18 auction, the second of 2016, offered 67,675,951 current vintage allowances (available for 2016 compliance) and sold only 7,260,000. Just under one million of the just over ten million future vintage allowances (available for use in 2019 and after) were sold. The unsold California state allowances will go back to the auction holding account and will not be available for sale until the auction clears above the floor price for two consecutive auctions, a critical regulatory feature that removes unexpected, excess supply from the market and provides further price support. Utility allowances that were consigned to auction and did not sell will be offered again for sale at the next auction.

Increased attention to the litigation brought by the California Chamber of Commerce and the Morning Star Packing Co. et al., as well as higher participation in the secondary market, caused lower demand for allowances in the May auction. Secondary market prices have traded as low as 44 cents below the floor price in the last couple of months. But the real story is the positive and stabilizing impact of the floor price itself.

Other markets without such a strong floor price have seen price drops that are much more dramatic when the market receives a disturbance. But in California, the volume of trades on the secondary market has been higher than usual, showing that some entities are taking the opportunity to buy allowances at a discount.

It's worth noting that these results in no way impact the overall performance of California's program, which will continue to incentivize carbon pollution reductions.

EDF’s take on the litigation of the cap-and-trade auction program’s legality

At this critical juncture, opponents continue to litigate and challenge carbon auctions, an integral component of the cap-and-trade program that promotes equity and a healthy carbon market.

We are confident, however, that California courts will ultimately confirm the Legislature’s broad grant of authority to the California Air Resources Board (ARB) to design effective programs to address the imminent threat of climate change, and will reject the claim that auctioning valuable, marketable emission allowance constitutes an unconstitutional “tax.”

In supplemental briefings submitted May 23 to the California court, ARB argued persuasively that, even if the intermediate appellate court were to find a legal flaw in the auction, there would be no valid legal justification for disrupting the cap-and-trade program including its auction components while the state Supreme Court considers the case or ARB develops a suitable solution. This outcome is well-grounded in legal precedent affirming courts’ obligation to avoid remedies that imperil public health and welfare or cause needless disruption to public and private interests that rely on the current status quo.

California’s ability to continue utilizing a cap-and-trade program designed to meet its needs through 2020 and beyond is essential to California and to global climate momentum.

While EDF has a high degree of confidence that the lower court decision rejecting the challengers’ claims will be upheld, even if it is not, settled judicial procedures should help to ensure that the environmentally and economically important cap-and-trade program continues with minimal disruption.

California’s ability to continue utilizing a cap-and-trade program that is designed to best meet the state’s needs through 2020 and beyond is essential not just to California itself, but also to global climate momentum.

We’re at a watershed moment for climate action, and California is at the forefront. The U.S., China, and 173 other countries signed the Paris Agreement last month, and a group of leaders convened by the World Bank and the International Monetary Fund expressed a goal of moving from 12% to 50% of global carbon emissions covered by carbon pricing by 2030. All the while, California is providing one of the most successful examples of economy-wide carbon pricing that is reducing emissions and promoting equity while the state’s economy is thriving.

There is every reason for confidence both in the legality of CARB’s choice to auction allowances and in the commitment of California’s leaders to deliver on California’s climate goals. We expect that a resilient cap-and-trade program will remain at the heart of the state’s increasingly ambitious and effective climate strategy long into the future.

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To understand airplanes’ climate pollution, a picture is worth a thousand words

Thousands of words have been written this week about a new efficiency standard recommended by a technical group of the International Civil Aviation Organization (ICAO). The standard, if adopted by ICAO’s executive council, is intended to require aircraft manufacturers to start producing more efficient airplanes.

But one picture makes clear that even with the new efficiency standard, international aviation still has a huge gap between its anticipated emissions and its own environmental goals.

Graph of aviation's emissions gap

Source: Environmental Defense Fund

The top of the upsloping curve shows how international aviation’s emissions are slated to skyrocket in coming years.

The horizontal red line toward the bottom, labeled “Emissions Cap at 2020 levels,” shows the industry’s own goal of “carbon-neutral growth from 2020.” ICAO has also embraced this goal.

The area below the top of the curve and above the horizontal red line at 2020 is the total amount of emissions that international aviation must deal with to meet this goal.

This week, ICAO’s Committee on Aviation Environmental Protection (CAEP) recommended that ICAO’s Executive Council adopt, at its next meeting in June, a carbon dioxide efficiency standard for aircraft, akin to a fuel economy standard for cars. That’s a step in the right direction.

But how big a slice will this new standard take out of international aviation’s skyrocketing emissions? At best, that’s the blue sliver shown in this picture. (The red sliver aviation hopes to cut through “operational improvements” like better air traffic control.)

That leaves a huge “Emissions Gap” – shown in green – about 7.8 billion tonnes of carbon pollution that international aviation will have to deal with to meet its own climate goals, let alone the kinds of reductions that will be needed if the sector is to bring emissions down to the dashed red arrow, along the lines of the Paris Climate Agreement.

The industry has a long way to go to make carbon pollution go down, not up.

ICAO’s pledged to finalize, this September, a global market-based measure (MBM) with offsetting to drive industry’s net emissions down to the 2020 cap. President Obama has made climate action a centerpiece of his legacy. Success in cutting aviation emissions could help – but that will only happen if the Obama administration takes the lead in the intensive talks now underway in ICAO.

The picture is clear: While the aircraft standard will help, the Administration now needs to keep its eyes on the prize the ICAO decision on the market-based measure in September.

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International action on aviation emissions: What's at stake in ICAO

If international aviation were a country, it would be a top ten emitter of carbon dioxide (CO2), on par with Germany or the United Kingdom. And it’s expected to grow enormously: with more than 50,000 new large aircraft slated to take to the skies, its emissions are expected to triple or quadruple by 2040.

In Paris in December 2015, the world hailed the success of the UN Framework Convention on Climate Change (UNFCCC) in adopting the first broadly applicable instrument to start driving carbon pollution down, with a goal of limiting warming to 1.5-2° C.

But Paris didn’t cover pollution from flights between countries. Why not? Because in 1997, aviation lobbied for, and got, the UNFCCC to defer these to another UN body, the International Civil Aviation Organization (ICAO).

ICAO talked about the issue for fifteen years until 2013, when, with Europe poised to enforce a cap on emissions of inbound/outbound flights, ICAO pledged to act by 2016. Quiet talks are now underway on:

  1. An ICAO CO2 standard for aircraft – akin to a miles-per-gallon standard for cars. In Montreal next week, possibly as early as Monday, February 8, 2016, a technical group is expected to agree a recommendation for this standard.
  1. A cap on international aviation’s total CO2 emissions at 2020 levels. ICAO is slated to vote in September 2016, on the cap and a market-based measure (MBM) to help airlines implement it.

Here’s what’s at stake:

Caption

Source: Environmental Defense Fund

Without any new rules, international aviation’s carbon pollution is expected to skyrocket (top red line). Better air traffic control can trim some pollution (top red wedge). An ambitious CO2 standard would mean fewer emissions per passenger-mile, further slowing the sector’s emissions growth (blue wedge). But because the industry’s overall emissions are expected to far outstrip these per-trip efficiency gains, there’s still a huge gap (green triangle) – at least 6-8 billion tonnes – to get to the goal of an emissions cap at 2020 levels (red horizontal line), or even more ambitious goals along the lines of the Paris agreement (red dashed line).

The real prize is the market-based measure to cap aviation emissions and drive pollution down, not up.

Learn more at edf.org/aviation.

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