Climate 411

3 signs we’re entering a golden age for carbon markets

By / Bio / Published: November 19, 2015

This is an adaptation of an essay by Fred Krupp and Nat Keohane for the International Emissions Trading Association’s Greenhouse Gas Market 2015/2016 report. This adaptation was originally posted on EDF Voices.

There was a time when market-based approaches seemed to fall off the radar in discussions of climate policy, but carbon markets are back.

Well-designed emission trading systems offer the combination of flexibility, incentives and guaranteed results that help polluters meet their targets – while leaving it up to the market to figure out the best way to meet them, driving costs down.

This is why so many companies are staunch supporters of emissions trading, and why national and international efforts are taking off.

Here are three indications  we may be entering a golden age for carbon markets and what it means for COP21, the international climate talks that begin in Paris later this month.

1. Carbon markets are going global

Climate progress in the United States and China is changing the global dynamic.

Gone are the days when the two largest emitters blame each other for inaction, and their bilateral progress is inspiring commitments around the world. All told, cap-and-trade programs are in place in more than 50 jurisdictions worldwide that are home to nearly a billion people.

Quebec and California have linked their carbon markets, creating North America’s largest cap-and-trade system, becoming the first example of subnational jurisdictions in different countries launching a joint market. And more programs are in the works.

Ontario, Canada’s most populous province and home to a significant manufacturing base, is developing a cap-and-trade program to launch by 2017 and link to California and Quebec’s market by 2018. Having the largest U.S. state and Canadian province in a formal, linked carbon market will help lay the foundation for further carbon market collaboration in North America and beyond.

China, meanwhile, is set to open a national carbon market in 2017, the world’s largest.

2. Next: International aviation and tropical forests

One of the most exciting opportunities is in international aviation.

The International Civil Aviation Organization (ICAO) is developing a market-based mechanism for consideration at its next Triennial Assembly in 2016 to help the sector meet its stated commitments to carbon-neutral growth from 2020 and a 50-percent cut by 2050.

That would cap emissions from a global sector that accounts for roughly 2 percent of carbon emissions, and growing fast, and would set a powerful precedent for international cooperation on climate change.

Another opening is in the forest sector.

Tropical forests are not only crucial to stabilizing the climate – they are critical to sustainable economic development for the communities and nations that rely on them. Carbon markets can play a key role in driving a new model of green growth in the tropics.

By allowing jurisdictional REDD+ credits (short for Reducing Emissions from Deforestation and forest Degradation) into their compliance markets, California – and, perhaps soon, the ICAO – have the opportunity to create positive economic incentives for forest protection at a landscape scale.

3. Existing markets are thriving

Since 2006, when California’s climate change program was signed into law, the state has received more clean tech venture capital investment than all other states combined. Bloomberg News recently ranked the Golden State the best place in the U.S. to do business, citing the state’s visionary leadership on climate change as one of the markers of its success.

A good illustration of how market-based policies can promote greater ambition is the landmark U.S. cap-and-trade program for sulphur dioxide. This program reduced national average concentrations of the pollutant by 76 percent since 1990 – taking an enormous step toward solving the problem of acid rain ahead of schedule and well below the estimated cost while creating hundreds of billions of dollars in annual benefits.

And despite well-publicized ups and downs – attributable in large part to the worst recession since the 1930s – the European Union’s emissions trading system is now performing well. It has over-achieved its goals, leading to more reductions at lower cost than expected.

To COP21 in Paris…and beyond

How can we capitalize on this political moment and build on the momentum we are seeing, to keep carbon markets growing around the globe?

A durable climate regime established by the Paris agreement will be one that harnesses market forces in the hunt for solutions, mobilizes private sector energies, enhances national self-interest and, through rigorous and transparent reporting, allows countries to demonstrate to each other that they are meeting their commitment.

A United Nations agreement is only one of many tools available to address climate change. It will take continuing strong action by leading emitters and leading carbon market jurisdictions to spur the technological, political and institutional transformations that will support more ambitious action in the years to come.

Posted in Economics, News / Comments are closed

4 undeniable signs we’re making progress on climate change

By / Bio / Published: September 11, 2015

Seven months ago, I made a strong statement that may have left some people shaking their heads. I said that we can turn the corner on climate change – end the centuries-long rise in greenhouse gas emissions and see them peak and begin to decline – in just five short years.

As it turns out, 2015 is shaping up to be a year of giant steps toward that goal.

In a deeply reported New York Magazine piece, political writer Jonathan Chait calls it “the year humans finally got serious about saving themselves.” Says Chait, “The world is suddenly responding to the climate emergency with – by the standards of its previous behavior – astonishing speed.”

I agree. Here are four reasons I believe we’re headed in the right direction:

1. America is tackling greenhouse gas pollution

The United States remains among the world’s largest per-capita emitters of carbon dioxide and other heat-trapping pollutants. But thanks to this year’s action by the Environmental Protection Agency, America now has a Clean Power Plan that will cut emissions from power plants, our single largest source of carbon, by 32 percent over the next 15 years.

The era of unlimited climate pollution is over.

On the heels of the EPA’s Clean Power Plan came a proposed rule to cut methane from newly built facilities in the oil and gas industry. More needs to be done, but this is an important step in dealing with a potent greenhouse gas that accounts for 25 percent of Earth’s current warming.

These climate laws will help the U.S. meet our target to reduce emissions by 26-28 percent below 2005 levels by 2025, a commitment we made to the international community that is key to getting other large polluters to do their share.

We’ll need further reductions, but this is a very significant start.

2. China is building momentum for global action

The world’s No. 1 greenhouse gas emitter, China submitted its climate plan to the United Nations in June, confirming it will let emissions peak by 2030 – and possibly sooner. I know from my colleague Dan Dudek in China that “sooner” is possible because this is a country that’s serious about climate action.

Pollution is choking Chinese cities and threatening economic growth, but the country’s leaders also see opportunity in the emerging clean energy industry. China has pledged to have 20 percent of its energy come from wind, solar and other non-fossil energy sources within 15 years – a massive investment in a nation of 1.4 billion.

This year alone, China is expected to add 18 gigawatts of new solar capacity. By comparison, the U.S. recently surpassed 20 gigawatts total.

To have China and the U.S. making such significant commitments has transformed the dynamic going into the U.N. climate summit in Paris. Instead of making excuses for inaction, the leading emitters have launched a virtuous cycle of increasing ambition.

That changes everything.

3. Clean energy is lifting people out of poverty

One billion people worldwide still have no energy, and more than 1 billion live in extreme poverty. Turning the corner on climate cannot mean that economies can’t develop.

But just as some developing economies adopted cellular technology without ever having land lines, some will leap-frog the dirty energy phase of economic development and go straight to clean.

In fiscal 2014, the World Bank more than doubled lending for renewable energy projects to nearly $3.6 billion – or 38 percent of its total energy lending.

As Rachel Kyte, the bank’s vice president and special envoy for climate change, recently said, what poverty-stricken people of the world need now is a “a low-carbon revolution.”

And this is starting to happen. In 2014, the emerging economies of China, India, Brazil and South Africa invested $131 billion in clean energy, just 6 percent less than the developed world did.

4. Pope Francis is galvanizing world opinion 

When Pope Francis released his much-anticipated encyclical on environmental stewardship in June, he made an urgent moral appeal to the world.

As my colleague Paul Stinson noted at the time, “A leading voice without political boundaries, the pope has the ability to reach people who previously could not or would not face the reality of climate change.”

Pope Francis called on us to push harder to replace fossil fuel with renewable energy sources – and people are listening.

The day he speaks to Congress later this month, a climate rally is expected to draw many thousands to the nation’s capital in a unified call for action. Environmental Defense Fund will be there, too.

The momentum is growing. We’re on our way to turn the corner on climate change – and the race of our lives is on.

This post originally appeared on our EDF Voices blog.

Posted in Clean Air Act, Clean Power Plan, Energy, Greenhouse Gas Emissions, International, Policy, Science, Setting the Facts Straight / Comments are closed

The Clean Power Plan: A ticket to the top

By / Bio / Published: August 6, 2015

(This post originally appeared on EDF Voices)

Paxson Woelber

With the Environmental Protection Agency’s Clean Power Plan now final, the era of unlimited carbon pollution from America’s power plants is finally coming to an end.

That’s excellent news, because climate change has put us in the race of our lives – and the countries that move the fastest toward clean energy will be the most competitive, create the most jobs and have the healthiest air. It’s a race to the top, and the Clean Power Plan gives the United States a better chance of winning.

Below are excerpts from an op-ed in today’s Wall Street Journal where I lay out the opportunities this groundbreaking initiative will bring to our nation.

It will put power in consumers’ hands

Photo: Save the Ozarks

“States should use this watershed moment to remove existingbarriers to energy freedom and consumer choice. Outmoded rules in many states make it harder for homeowners to install solar panels – and Americans across the political spectrum have made it clear that they want more control over the electricity they use.

It ramps up the clean energy market

“Driving down carbon emissions will ramp up the energy transformation that is already happening across America. What once seemed exotic electric cars, highly efficient appliances, competitively priced clean energy is becoming commonplace.

“In 2014, the clean-energy market in the U.S. expanded by 14 percent, to almost $200 billion. That is bigger than the domestic airline industry.

It builds a more prosperous future

Photo: Duke Energy

“The EPA’s plan gives companies the incentive to make investment decisions that focus on cleaner energy. For the customer in states that lower emissions by creating opportunities for more efficient use of energy, the plan will mean that home electric bills will be lower and individual control of electricity use will be higher.

“Bill Gates recently said, ‘If we create the right environment for innovation, we can accelerate the pace of progress, develop and deploy new solutions, and eventually provide everyone with reliable, affordable energy that is carbon free.’

I believe that the Clean Power Plan will help establish that environment for innovation and lead us to a cleaner, healthier and more prosperous future.”

Posted in Clean Power Plan, News / Comments are closed

New Carbon Pollution Standards Will Protect Health, Drive Innovation

By / Bio / Published: September 20, 2013

Source: The Guardian

(This post originally appeared on EDF Voices)

The Environmental Protection Agency announced the nation’s first-ever carbon pollution standards for new power plants this morning—a major victory in the fight against climate change. Right now, there are no limits at all on carbon pollution from power plants, the single largest source of this pollution in the United States.

These standards are a necessary, common sense step that will ensure cleaner power generation that helps protect our children from dangerous smog and our communities from extreme weather. They will also drive innovation, so that America can continue to lead the world in the race to develop cleaner, safer power technologies.

Anticipated direct health consequences of climate change include injury and death from extreme weather events and natural disasters, increase in climate-sensitive infectious disease, increases in air pollution-related illness, and more heat related, potentially fatal, illness. Within all of these categories, children have increased vulnerability compared with other groups.

Scientists warn that the buildup of greenhouse gases and the climate changes caused by it will create conditions, including warmer temperatures, which will increase the risk of unhealthful ambient ozone levels. Higher temperatures can enhance the conditions for ozone formation. Even with the steps that are in place to reduce ozone, evidence warns that changes in climate are likely to increase ozone levels in the future in large parts of the United States.

If physicians want evidence of climate change, they may well find it in their own offices. Patients are presenting with illnesses that once happened only in warmer areas. Chronic conditions are becoming aggravated by more frequent and extended heat waves. Allergy and asthma seasons are getting longer. . . . Rising air and water temperatures and rising ocean levels since the late 1960s have increased the severity of weather, including hurricanes and droughts, and the production of ground-level ozone. That means more asthma and respiratory illnesses, more heat stroke and exhaustion, and exacerbation of chronic conditions such as heart disease.

Cost-effective, low-carbon energy solutions are already helping spur the economy, create good jobs and reduce harmful pollution in red and blue states across the country. Industries are recognizing that these smart power solutions are not only good for people and the environment, but also very good for business.

Many major power companies have recognized the need to address carbon. When these standards were initially proposed, the CEO of PSEG, Ralph Izzo, said, “[t]he Agency’s action establishes a logical and modest standard for new electric power plants and provides the industry with much needed regulatory certainty. The EPA provides a framework for the industry to confront this problem in a cost effective manner.” And the CEO of American Electric Power, Nick Akins, said in June that the new Climate Action Plan can be carried out “without a major impact to customers or the economy.”

Wind topped all new power deployed in 2012, with especially strong growth in Kansas, Texas, Iowa, Colorado, Illinois, Minnesota and Oklahoma.  So-called “microgrids”—local generation networks that can run independent of the grid—are unlocking on-site clean power that expands clean energy choices for communities and consumers. And new financing models are driving more efficient use of energy at scale, cutting pollution while saving businesses and families money.

We know we must act now.

The costs of climate inaction are hitting home across the country as extreme weather events batter our communities. From the recent heartbreaking severe floods in Colorado to last year’s devastation from Superstorm Sandy in the Northeast, from crippling drought to terrible wildfires in the West, extreme weather is here and made worse by rising temperatures. The two million Americans who supported the EPA’s initial proposal last year know that doing nothing about climate change is not free. We are paying costs now and will inflict even greater costs on our children and future generations if we do not begin taking aggressive action to reduce carbon emissions.

As Energy Secretary Ernest Moniz said earlier this week, “every ton we emit you can check it off against our children and grandchildren.” The naysayers, as always, are out in force and will do everything they can to derail action on climate. Please join Americans across our nation and lend your voice of support during this crucial time. Together with health and environmental groups, businesses, parents and states – red and blue – we can work together to meet this challenge.

Posted in Energy, Greenhouse Gas Emissions, Jobs, Policy / Comments are closed

The President takes the lead on climate change

By / Bio / Published: June 27, 2013

(This post first appeared on Tuesday, June 25th on EDF Voices)

From whitehouse.gov

Today President Obama took an important step toward meeting the promise of his inaugural address to “respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations.”

In a Climate Action Plan announced at Georgetown University, the President laid out his vision for putting in place common sense policies that will cut carbon pollution while driving innovation, cutting energy waste and energy bills, creating jobs, and protecting public health. The President’s Plan pledged to:

  • Cut carbon pollution in the United States by putting in place tough carbon pollution standards for new and existing power plants, accelerating investments in renewable energy, energy efficiency and innovative technologies, reducing emissions of highly potent greenhouse gases such as methane and HFCs, and putting in place fuel-saving standards for medium and heavy-duty trucks;
  • Work with local communities and vulnerable sectors of the economy to prepare for climate impacts that can no longer be avoided; and
  • Couple action at home with leadership internationally to forge a truly global solution to this global challenge. (Read more about the international aspects of the plan on ourClimate Talks blog.)

The President’s decision to focus his administration on addressing the serious problem of methane’s contribution to climate change is an additional, welcome part of his announcement.

He is in step with most Americans, who have moved past the old debates about climate change and are now dealing with the impacts. Reducing carbon pollution will help drought-stricken farmers in the Midwest, coastal residents from Florida to Connecticut rebuilding after storms, communities ravaged by wildfire in the West, children suffering from asthma, and taxpayers everywhere who have to foot the bill for the impacts of climate change.

Most Americans would be shocked to know that there are no current limits on carbon pollution from power plants. By setting the first standards in history for carbon pollution from power plants in the United States – which produce 2 billion tons of this pollution each year, or about 40% of the nation’s total – the President will help modernize our power system, ensuring that our electricity is reliable, affordable, healthy and clean. He can do so in a way that can give industry the flexibility it needs to make cost-effective investments in clean energy technologies.

I’m seeing plenty of reasons for hope these days. California recently put in place nearly economy-wide limits on carbon pollution – in the ninth largest economy in the world. Two weeks ago, the United States and China agreed to work together to reduce powerful greenhouse gases known as HFCs. And last week in the city of Shenzhen, the Chinese launched the first of seven emissions trading pilot programs.

But U.S. leadership is needed to help build on this progress and secure the reductions in carbon pollution scientists tell us we need at home and around the world. And the President today showed leadership, aligning common sense action with a vision of the future that will create a stronger America for our children and grandchildren.

We expect Members of Congress to strongly support the President. We know the usual naysayers will soon be claiming that we can’t afford to deal with this problem. The truth is we can’t afford not to. Those who oppose the President’s actions today apparently want no limits at all on carbon pollution. That’s a highly irresponsible position in the face of a scientifically established threat. In fact, failure to act now will only saddle our children’s generation with huge additional costs. Those who say they are concerned about the burden of fiscal deficits on coming generations should also worry about the enormous, and growing, costs of climate change.

Thanks to the President, the days of silence and inaction on climate are over. This plan could become an important part of his legacy.

We still have a long way to go. Now it’s up to all of us to join with the President in confronting the defining challenge of our time.

Posted in Greenhouse Gas Emissions, News, Policy / Comments are closed

New Report: Ambition Is the Key to Reaching Climate Goals

By / Bio / Published: February 6, 2013

Ambition matters.

We all know this, because America is a nation of strivers — innovative, creative people who understand that ambition and drive can make the difference between success and failure. It’s true in business. It’s true in life.  And it’s true in environmental protection.

Today the World Resources Institute (WRI) released a report that shows how crucial national ambition is when it comes to charting an effective pathway for climate action.

The report — Can the U.S. Get There From Here? — is a searching examination of the potential for reducing carbon pollution under existing federal laws and with state leadership.

It finds that, with ambitious action by the federal government and the states to curb carbon pollution, the United States can cut its emissions to 17 percent below 2005 levels by 2020.

That hopeful news comes not a moment too soon, because the bad news about climate change is all around us.

The National Oceanic and Atmospheric Administration recently announced that 2012 was the tenth warmest year on record for the planet, continuing the trend of rising global temperatures in which each decade has been hotter than the one before.

In the continental United States, 2012 was the warmest year on record, with the second most extreme weather — record-breaking high temperatures, the devastation of Hurricane Sandy, widespread drought, rising corn prices, and grim wildfires. Eleven weather disasters in 2012 carried a greater than $1 billion price tag, with the recovery efforts from Hurricane Sandy expected to top $60 billion. And while our cities are flooding, crops are dying, and forests are burning, Congress is fiddling.

So let’s look more closely at WRI’s hopeful news about what we can achieve under existing laws.

The new report finds that progress in four key areas will be essential:

  1. Implementing rigorous federal carbon pollution standards for new and existing power plants, transitioning the power sector towards a cleaner, more modern, and more resilient electricity generation system
  2. Eliminating use and emissions of hydrofluorocarbons, extremely potent heat-trapping gases
  3. Developing comprehensive federal emission standards to stop the methane leaks in oil and gas extraction and transport processes
  4. Improving the energy efficiency of our economy

Leadership by states to cut emissions and invest in clean energy and efficiency will be needed to compliment and amplify action at the federal level.

The analysis also demonstrates that no matter how rigorous our nation is in carrying out existing laws to cut carbon pollution, we will need new legislation to achieve the deeper emission reductions climate science demands by mid-century.

In the meantime, there is much that we can do. Now. And with these actions, we can start to transform our aging energy infrastructure and forge a prosperous clean energy, low-carbon future.

This is my favorite sentence of the report:

[T]he single most important factor influencing emissions reductions is political and policy ambition.

Ambition matters. So let’s be ambitious here, where it matters so very much to our future, our children’s futures, and our planet’s future.

Posted in Greenhouse Gas Emissions, Partners for Change, Policy, What Others are Saying / Read 1 Response