California and Quebec’s Carbon Auctions Sail into 2016

The results of California and Quebec’s carbon market auction released today show that the market can operate as designed and continue sailing along.

Participants in the Feb. 17th auction, California and Quebec’s 6th joint auction, had an opportunity to bid on over 81 million carbon allowances. Of those:

  • 71.5 million of those allowances were current vintage allowances (2016 and earlier), which regulated businesses can use this year or in any future year for compliance. 95% of current vintage allowances sold at the minimum floor price of $12.73. In the November 2015 auction, prices anticipated the 2016 floor price and sold at $12.73 although the floor price was about 60 cents less.
  • Just over 10 million of those allowances are only available for use in 2019 and after. 93% of the 2019 vintage allowances sold at the floor price of $12.73.

These results show steady prices and average participation by regulated businesses. It is somewhat unusual that some current allowances did not sell at this auction. However, these auction results demonstrate an important feature of the California-Quebec market that safeguards against large price swings like those seen in other commodity markets: a minimum price floor in every auction that increases steadily each year. Read More »

Posted in California| Leave a comment

6 successes from California and Quebec’s third year of cap and trade

Source: Flickr

Photo Source: Flickr / JoeBehr

The joint carbon market in California and Quebec holds its first carbon market allowance auction of 2016 today.

The auction offers a good opportunity to reflect on some of the notable successes of the market in 2015.

The California-Quebec market is one of the prime examples of a successful carbon market that many countries will look to as they consider how to meet the commitments made in Paris, where countries successfully negotiated an ambitious climate deal that outlines multiple pathways for nations to use markets to meet their long-term goals.

Here are the top six successes of California and Quebec’s carbon market in 2015, in no particular order. Read More »

Posted in California, Emissions trading & markets, United States| Leave a comment

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.

Posted in Aviation, News| Leave a comment

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.

Posted in Aviation, News| Leave a comment

New studies point to a pathway to find India’s most effective climate-smart farming practices

india measurements

EDF-Fair Climate Network science team training a new village volunteer to collect air samples from a groundnut farm. EDF and FCN have collaborated with international research groups to develop new greenhouse gas emission measurement techniques and train local groups to measure emissions during crop production. Source: Environmental Defense Fund, Rakesh Tiwari

Agriculture around the world is already experiencing the effects of the changing climate, including more intense droughts, heat waves, floods, and a growing influx of pests and diseases. This contributes to unstable livelihoods for the world’s 2 billion rural poor who depend on small-scale farms and live on the margins of the poverty line.

With these challenges, the world is increasingly shifting toward climate-smart agriculture, which the Food and Agriculture Organization (FAO) of the United Nations defines as an umbrella of agricultural practices that lead to a “triple win” because they:

  1. sustainably increase agricultural productivity and income;
  2. adapt and build agricultural resilience to climate change; and
  3. reduce and/or remove greenhouse gas emissions.

The FAO’s definition offers initial guidance for climate-smart agriculture. However, for the global scientific community, national policy makers, and those who care about global food security, there remains a need for more solid evidence around how the triple win can be achieved across geographies, crop types, and different farm scales, especially small-scale farms spread across much of the developing world.

Environmental Defense Fund (EDF) has released two new peer-reviewed journal articles that contribute important evidence to support a triple-win approach to feeding the 9 billion people who will be living on this planet in 2050. In the first article, we present a rigorous pathway to measure climate impacts of farming practices, especially in the tropical and developing parts of the world. In the second article, we demonstrate that carefully chosen climate-smart farming practices can improve resource use efficiency, enhance food security, increase farmer savings, and provide better ecosystem services while decreasing greenhouse gas (GHG) emissions.

With our partners, we conducted the research in India, where there is a huge opportunity to implement climate-smart agriculture. India has 100 million small-scale (under 2 acres of land) farming families, which means it’s in the best interest of India and its farmers to learn to adapt in a way that maintains (and preferably improves) crop yields and secures their profitability while also reducing agricultural GHG emissions.

Read More »

Posted in Agriculture, India| Leave a comment

Indonesia could curb deforestation and increase production with Zero Deforestation Zones

By Dana Miller, Research Analyst and Ruohong Cai, Ph.D. Economist

burn_rsized

A smoldering landscape in Central Kalimantan, Indonesia. Credit: Ruohong Cai, October, 2015

You may have seen news stories this fall about Indonesia and the blanket of haze choking the country and neighboring countries Singapore and Malaysia. This haze comes from burning carbon rich forests and peat soils for the production of palm oil and other commodities; burning currently releases more greenhouse gases daily than the entire U.S. economy.

To address deforestation and the fires and haze it brings, companies that control 90% of palm oil production have pledged to eliminate deforestation from their supply chains. Several major palm oil companies have pledged not to clear High Carbon Stock (HCS) lands—high, medium and low density forests—or peatlands for palm oil and other commodities; instead the companies would shift new production to low carbon stock areas, which are young regenerating forest, scrub or cleared or open lands.

The Government of Indonesia pledged to reduce emissions by 26% unilaterally or 41% with international support below a projected "business as usual" baseline by 2020. This year, Indonesia committed to reduce emissions by 29% to 41% below a projected baseline by 2030.

In a new report, Environmental Defense Fund explores how companies could eliminate deforestation from their supply chains by preferentially sourcing palm oil and other commodities from provinces in Indonesia that meet criteria for Zero Deforestation Zones (ZDZs).

ZDZs would be districts or provinces that align public and private sector actors and are on a path to reaching zero net emissions from deforestation across their jurisdiction while increasing agricultural production. ZDZs would have strong policies in place consistent with the framework Reducing Emissions from Deforestation and forest Degradation (REDD+). Then, companies could source commodities such as timber and palm oil from ZDZs.

For provinces in Indonesia to become ZDZs, local and national governments would have to address the root causes of deforestation.  Specifically, Indonesia would need to:

  • Revise laws that allow and even encourage deforestation; strengthen law enforcement; and address conflicting agendas between local and regional governments, ministries, and powerful private sector actors.
  • Create a definition for ZDZs that fits Indonesia’s national context. The definition would need to put provinces on pathways to produce zero net emissions from deforestation and comply with UN decisions on REDD+.
  • Set up monitoring systems that both the government and private sector would use to enforce deforestation policies and clarify disputed land claims by local communities and plantations.
  • Provide essential economic incentives to producers to reduce deforestation, increase yields on existing plantations, and shift new production to degraded lands.

Figure 1. This spatial map shows that the opportunity costs of the land translated into a minimum carbon price (local-specific) needed to eliminate deforestation in Kalimantan, Indonesia, which varies widely by location from $0 to $100 per ton CO2.

Economic Incentives for Reducing Deforestation in Kalimantan Provinces:

A carbon price could generate much needed economic incentives to reduce deforestation. To predict the carbon price needed to reduce emission from deforestation, EDF performed a 10-year simulation of deforestation in Kalimantan, Indonesia, using the historical relationship between palm oil revenues per hectare and deforestation rates to estimate landowners’ responses to economic incentives.  Kalimantan provides a good case study for Indonesia because it contributes one quarter of Indonesia’s palm oil production.

Based on our empirical analysis, the opportunity cost of conserving forest varies widely across Kalimantan. Figure 1 translates the opportunity cost of the land into a price per ton of carbon.

We further compared the cost in terms of dollars per ton of carbon for reducing emissions from deforestation on low carbon stock (LCS, less than 40 t C/ha) and high carbon stock (HCS, more than 40 t C/ha) lands. In Figure 2, at a carbon price of $10/t CO2e, Kalimantan provinces can reduce 75 million tons (Mt) CO2e per year from LCS areas, 185 MtCO2e from HCS areas, and 260 MtCO2e per year from both HCS and LCS areas. In the latter and highest scenario that conserves both HCS and LCS areas, Kalimantan could reduce emissions from deforestation 74-78% below the scenario without a carbon price.

Figure 2. Estimated cost curves for avoiding emissions from deforestation on high carbon stock lands (red), low carbon stock lands (yellow) and all lands (blue) in Kalimantan, Indonesia. This figure shows that more emissions can be avoided if Kalimantan conserves both high carbon stock and low carbon stock lands.

This result indicates that more emissions can be avoided at a lower cost if Kalimantan conserves portions of all lands, not just high carbon stock lands.

To further illustrate this point, the table below shows that Kalimantan could achieve its contribution to Indonesia’s emission reduction goals of 26% to 41% below business as usual by 2020 at a lower price if both high carbon stock and low carbon stock areas are conserved.

This shows that a “Zero Deforestation Zone” approach focused on an entire landscape has the potential to more cost-effectively reduce emissions than an approach focused on just a particular subset of lands.   This analysis does not consider the potential for “leakage” or shifts of deforestation from one location to another.  Incorporating leakage would lend a further argument for a regional approach that would capture shifts in deforestation across an entire zone.

Table_cost_year_reduction_target (1)

 

Indonesia has many hurdles to cross before it can level off its rapid deforestation rate and reduce it to zero. But, the haze, health implications, productivity loss and public outrage that ensue from peat fires might just be the wakeup call that Indonesia needs to address its deforestation.

 

Read more in our paper Zero Deforestation Zones in Indonesia; A proposal to curb deforestation and increase agricultural production.

 

Posted in Uncategorized| Leave a comment
  • Get blog posts by email

    Subscribe via RSS

  • Categories