China Announces Cap-and-Trade Program

October 1, 2015
The Nicholas Institute for Environmental Policy Solutions at Duke University

The Nicholas Institute for Environmental Policy Solutions at Duke University

On his visit to Washington last week, Chinese president Xi Jinping announced that his country, the world’s biggest carbon polluter, will launch a national cap-and-trade scheme in 2017. The move would make China the world’s biggest carbon market and could strengthen global efforts to put a price on carbon.

The planned emissions trading program will consolidate China’s seven existing regional carbon markets and cover industries not currently regulated for carbon in the United States: iron and steel, chemicals, building materials, and paper manufacturing.

China has yet to announce specifics of its cap-and-trade plan, which will face political and technical challenges. “The devil of course is in the details,” said Timmons Roberts, a professor of environmental studies at Brown University. “It really does matter what the actual cap is.” He added that limits leading to a pre-2030 emissions peak would be a huge move.

Frank Jotzo, the director of the Center for Climate Economics and Policy at the Australian National University in Canberra and a close tracker of developments in China said the national emissions trading scheme will have a major signaling effect. “The world’s second-largest economy puts in place a price on carbon emissions, and this will be noted the world over,” he said. “If successful, it can grow into playing a major role in facilitating China’s objectives for a cleaner energy and industrial system.”

Jinping’s announcement occasioned this ironic observation in The Atlantic in reference to Republicans’ rejection of a cap-and-trade proposal in Obama’s first term, which led to enactment of climate control policy through regulation of the electric power industry in the form of the Clean Power Plan: “China, the largest self-avowedly communist nation in the world, has created a market to reduce its carbon emissions. And the U.S., the anchor of global capitalism, will limit them through government command-and-control.”

China also made a substantial financial commitment to help poor countries fight climate change—$3.1 billion.

U.N. Sustainable Development Goals Adopted

The United Nations General Assembly agreed to 17 new sustainable development goals, which expand on the eight Millennium Development Goals. The new goals are broken down into 169 specific targets each country has committed to achieve over the next 15 years. They focus on everything from eradicating extreme poverty and climate change to providing energy access for all.

Goal 7 is to ensure access to affordable, reliable, sustainable and modern energy for all. Two targets to put the world on this path are to increase the share of renewable energy in the global energy mix and to double the rate of improvement of energy efficiency by 2030.

World Energy Council Secretary General Christoph Frei welcomed the agreement on the goals. “The adoption of energy among sustainable development goals is timely, critical, and historic,” he said. “Timely because we need to master the energy transition at a time of greatest uncertainty in the energy sector. Critical because we will not solve energy access or achieve energy efficiency objectives without moving the agenda from those who want to those who can. Historic because the development community for the first time recognizes the fundamental role energy is playing in the achievement of most of the other sustainable development goals.”

Goal 13 is to take urgent action to combat climate change and its impacts. A few targets to get there—integrate climate change measure into national policies, strategies and planning as well as advance the Green Climate Fund—requiring developed countries to follow through on commitments to provide $100 billion by 2020 to aid developing nations’ efforts to adapt and mitigate climate-related disasters.

With the adoption of the 17 goals, attention now turns to the U.N. climate negotiations in Paris—where member states hope to adopt a global climate agreement. In a CNN editorial, U.N. Secretary General Ban Ki-Moon, said all could take a lesson from Pope Francis’s message on climate change.

“Pope Francis, in his recent encyclical, clearly articulated that climate change is a moral issue, and one of the principal challenges facing humanity,” said Ban Ki-Moon, mentioning the Pope’s recent visit to the U.S. where he address the U.N. and Congress. “He rightly cited the solid scientific consensus showing significant warming of the climate system, with the most global warming in recent decades mainly a result of human activity.”

Shell Suspends Arctic Drilling

Royal Dutch Shell suspended its search for oil and gas off the coast of Alaska for the “foreseeable future,” saying that Arctic oil reserves were insufficient and that the regulatory environment was too unpredictable to continue.

“Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the U.S.,” said Marvin Odum, president of Shell USA. “However, this is a clearly disappointing exploration outcome for this part of the basin.”

Although the decision was celebrated by some environmental activists who had protested Shell’s decision to drill offshore, it should give people on both sides pause, Mike LeVine of Oceana told U.S. News and World Report.

“Meaningful action to address climate change is almost certainly going to mean we can’t keep looking for oil in remote and expensive places,” he said. “Rather than investing in programs like this, we need to figure out how to transition away from fossil fuels and toward sustainable energy.”

Alaska House of Representatives member Ben Nageak told the Associated Press that the state must act quickly to find another source to fill its 800-mile trans-Alaska oil pipeline.

“We stood on the cusp of another economic boom that could have propelled our young people and their children to better futures,” Nageak said. But “a draconian and poisoned federal government” shut it down.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

GOP Candidates: Government Action on Climate Change Will Hurt Economy

September 24, 2015
The Nicholas Institute for Environmental Policy Solutions at Duke University

The Nicholas Institute for Environmental Policy Solutions at Duke University

Last week’s Republican debate drew opinions of several candidates on climate change, namely on how government action to address the problem will hurt the economy. During the four-minute exchange, Florida Sen. Marco Rubio and New Jersey Gov. Chris Christie dismissed the idea of enacting former Secretary of State George Schultz’s proposed “insurance policy” to guard against global warming risks such as sea-level rise.

When debate moderator Mark Tapper asked about the insurance policy, Rubio responded, “Because we’re not going to destroy our economy the way the left-wing government that we are under now wants to do,” and Christie said, “I agree with Marco. We shouldn’t be destroying our economy in order to chase some wild left-wing idea that somehow us by ourselves is going to fix the climate.”

Rubio said he’s not a climate skeptic but that he opposes policies to reduce emissions that he believes will hurt the U.S. economy and fail to affect global temperatures. He suggested that there is little point in the United States reducing its emissions because “America is not a planet.”

Wisconsin Gov. Scott Walker, who suspended his campaign on Monday, concurred with Rubio and referenced the U.S. Environmental Protection Agency’s Clean Power Plan to reduce carbon dioxide emissions from power plants, although not by name.

“I’m going to echo what Senator Rubio just said,” the governor said. “This is an issue where, we’re talking about my state, it’s thousands of manufacturing jobs. Thousands of manufacturing jobs for a rule the Obama administration, its own EPA has said will have a marginal impact on climate change.”

Christie went on to say that “massive government intervention” to deal with climate change is unnecessary, and that New Jersey had already reached its clean air goals for 2020. But ArsTechnica noted that he did not mention that state’s renewable energy standards, net metering, and solar renewable energy credits all required government intervention.

Christie did note that he’d taken New Jersey out of the Regional Greenhouse Gas Initiative, a now nine-state emissions trading arrangement recently shown to have generated both emissions reductions and economic benefits. Carbon allowances sold by the initiative have just set a new record high. Participating states will use the revenues for energy conservation, renewable energy, and direct bill assistance programs.

Pope Visits United States; Talks Climate Change

The day after arriving in the United States for a six-day visit, Pope Francis acknowledged, in a brief speech at the White House, efforts by the Obama Administration to curb carbon emissions.

“Mr. President,” Francis said in English, “I find it encouraging that you are proposing an initiative for reducing air pollution. Accepting the urgency, it seems clear to me also that climate change is a problem which can no longer be left to a future generation.” He added “To use a telling phrase of the Reverend Martin Luther King, we can say that we have defaulted on a promissory note and now is the time to honor it.”

The papal visit follows the release of his encyclical on the environment, and Francis’s talks about climate change during the visit may very well touch on the concept of carbon markets. The encyclical says markets are “not good” for rationing natural resource use. “This is where many economists who study environmental markets and carbon markets might take exception to the pope,” the Nicholas Institute’s Brian Murray told American Public Media’s Marketplace. He said markets to limit carbon emissions do curb those emissions, and he attributed the Vatican’s negative view of markets to a failed attempt to use them to go carbon neutral, which used carbon offsets from a voluntary action that did not materialize. A market driven by an enforced cap on emissions, however, would not produce the same risk of failed reductions.

Today, Francis became the first pope to address a joint session of Congress. On the topic of climate change, Pope Francis addressed the divided Congress: “We need a conversation which includes everyone, since the environmental change we are undergoing, and its human roots, concerns and affects us all.”

He echoed words in his June encyclical, calling for “courageous and responsible effort to ‘redirect our steps’ and to avert the most serious effects of the environmental deterioration caused by human activity,” Francis said. “I am convinced that we can make a difference and I have no doubt that the United States—and this Congress—have an important role to play … Now is the time for courageous actions and strategies, aimed at implementing a culture of care and an integrated approach to combating poverty, restoring dignity to the excluded, and at the same time protecting nature.”

Reports: Carbon Pricing Schemes Gain Momentum

The World Bank reports that around the world carbon pricing schemes have nearly doubled (from 20 to 38) since 2012, and the Carbon Disclosure Project (CDP), a non-profit that gathers environmental data for investors, reports that the number of companies putting a price on their greenhouse gas emissions for internal planning in 2015 almost tripled (from 150 to 437), with the biggest increase in Asia, where China is slated to launch a national carbon market and South Korea has just introduced one.

According to the CDP report, companies said that carbon prices create incentives for energy efficiency projects and switches to less-polluting fuels. In the United States, utilities cited expected emissions costs as motivation for low- or no-carbon generation investments

The World Bank study estimates that carbon pricing instruments cover about 12 percent of all greenhouse gas emissions and that the combined value of those instruments in some 40 nations and 23 cities, states, and regions is $50 billion a year—$34 billion from markets and $16 billion in taxes. It showed that carbon prices, ranging from less than a dollar a ton of carbon dioxide in Mexico to $130 a ton in Sweden, are for the most part “considerably lower” than needed to help limit temperature rises to a United Nations goal of 2 degrees Celsius above pre-industrial times to avoid the most devastating effects of climate change. Nations gather for international climate negotiations Nov. 30 to Dec. 11 in Paris—a meeting intended to produce a deal that would commit all nations to reducing greenhouse gas emissions in the hopes of meeting this goal.

The study notes that ex-post analysis of the European Union Emissions Trading System, presently the world’s largest cap-and-trade system by traded volume, has not led industries to move to jurisdictions with comparatively low emissions costs on any significant scale but that the risk of carbon leakage remains as long as carbon price signals are strong and differ significantly among jurisdictions. According to the study, this risk, affecting a limited number of exposed sectors, can be effectively mitigated through policy design.

A parallel report by the World Bank and the Organisation for Economic Co-operation and Development, with input from the International Monetary Fund, identified new principles for carbon pricing that it called FASTER: Fairness, Alignment of policies and objectives, Stability and predictability, Transparency, Efficiency and cost effectiveness and Reliability and environmental integrity.

Last week, the European Union urged UN envoys to adopt international carbon market rules and emissions accounting systems by 2017. Negotiations on such systems are not expected to progress far at this year’s climate summit in Paris.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

McCarthy: States Must Comply with Clean Power Plan

March 19, 2015
The Nicholas Institute for Environmental Policy Solutions at Duke University

The Nicholas Institute for Environmental Policy Solutions at Duke University

On Tuesday, a lawyer hired by the world’s largest coal mining company told the House Energy and Commerce Subcommittee on Energy and Power that proposed requirements to reduce carbon dioxide emissions from power plants are reckless, and Senate majority leader Mitch McConnell of Kentucky, in an op-ed, said states should ignore them, but U.S. Environmental Protection Agency (EPA) administrator Gina McCarthy warned that the regulations will be enforced whether or not states chose to cooperate.

“The EPA is going to regulate. Mid-summer is when the Clean Power Plan is going to be finalized,” McCarthy said, noting that the EPA is developing a federal implementation plan that will apply to states that fail to submit their own compliance plans. “If folks think any of those pieces aren’t going to happen and [the Clean Power Plan] isn’t going to be implemented, I think they need to look at the history of the Clean Air Act more carefully. This isn’t how we do business.”

A new policy brief by Duke’s Nicholas Institute for Environmental Policy Solutions offers a compliance pathway for the EPA’s proposed Clean Power Plan that allows states to realize the advantages of multistate and market-based solutions without mandating either strategy. Under the common elements approach, states develop individual-state plans to achieve their unique emissions targets and give power plant owners the option to participate in cross-state emissions markets.

“States wouldn’t necessarily have to mandate market-based approaches or even endorse the approaches,” said Jonas Monast, lead author and director of the Climate and Energy Program at the Nicholas Institute. “What it would require is the states using a common definition of what a compliance instrument is and ensuring that somehow the credits are verified and tracked.”

The common elements approach would allow cross-state credit transfers without states’ negotiation of a formal regional trading scheme, leave compliance choices to power companies, build on existing state and federal trading programs and maintain traditional roles of state energy and environmental regulators.

Carbon Footprint of Crudes Varies Widely

A first-of-its-kind oil-climate index, produced by the Carnegie Endowment for International Peace’s Climate and Energy Program in collaboration with Stanford University and the University of Calgary, captures the huge spread between the most and least intensive greenhouse gas (GHG) oils. By calculating the carbon costs of various crudes and related petroleum products, the authors suggest that companies and policymakers can better prioritize their development.

The index reflects emissions from the entire oil supply chain—oil extraction, crude transport, refining, marketing, and product combustion and end use—and reveals an 80 percent spread between the lowest GHG-emitting oil and the highest in its sample of 30 crudes, representing some 5 percent of global oil production. That spread will likely grow when more types of crude oil, particularly oil from unconventional sources, are added to the index.

The lead emitter? China Bozhong crude, followed by several Canadian syncrudes derived from oil sands-extracted bitumen.

A blog post for the Union of Concerned Scientists suggested that the wide emissions spread should give rise to “more responsible practices like capturing rather than flaring gas” and that in some cases “the dirtiest extra-heavy resources are best left in the ground.”

The index, which highlights that attention to the entire lifecycle of a barrel of crude is critical to designing policies that reduce its climate impacts, was released days before the International Energy Agency reported that for the first time in 40 years of record keeping, carbon dioxide emissions from energy use remained steady in 2014. The halt, the report states, is particularly notable because it is not tied to an economic downturn.

More Renewables, Tougher Standards for Public Lands

Secretary of the Interior Sally Jewell previewed plans to make energy development safer on public and tribal lands and waters in a speech outlining priorities for the Obama administration’s final years.

“…our task by the end of this Administration is to put in place common-sense reforms that promote good government and help define the rules of the road for America’s energy future on our public lands,” Jewell said. “Those reforms should help businesses produce energy more safely and with more certainty. They should encourage technological innovation. They should ensure American taxpayers are getting maximum benefit from their resources. And they should apply our values and our science to better protect and sustain our planet for future generations.”

Among the measures to be unveiled in coming months: tightened spill prevention standards for offshore drilling, increased construction of solar and wind installations and a raise in royalties from coal mining.

Jewell also hinted at plans “in coming days” to propose rules governing hydraulic fracturing on public lands, which are believed to hold about 25 percent of the country’s shale reserves.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

EPA Delays Release of Carbon Emissions Rules for Power Plants

January 8, 2015
The Nicholas Institute for Environmental Policy Solutions at Duke University

The Nicholas Institute for Environmental Policy Solutions at Duke University

The Environmental Protection Agency (EPA) is delaying the release of carbon emissions rules for all power plants and will publish them for new as well as existing plants at the same time mid-summer.

“It’s become clear to us … that there are cross-cutting topics that affect the standards for new sources, for modified sources and for existing sources, and we believe it’s essential to consider these overlapping issues in a coordinated fashion,” said Janet McCabe, the EPA’s acting administrator for air quality.

McCabe also announced that the EPA will begin drafting a “model rule” for states that do not submit individual plans to meet emissions reduction targets in the existing power plant regulations.

Under the proposed regulations for new sources, the EPA has functionally required new coal power plants to include carbon-capture technology, which critics of the emissions rules say lack proof of efficacy on a large scale and have a high cost to implement. In 2011, the American Electric Power Company reported that including carbon-storing processes at a West Virginia plant would cost an estimated $668 million.

California Cap-and-Trade System Includes Oil and Gas Sector

California’s cap-and-trade program—the country’s first multi-sector carbon emissions trading program—now requires gasoline and diesel producers to supply lower-carbon fuels or to buy carbon allowances—pollution permits—for the greenhouse gases emitted when those fuels are burned.

Key program stakeholders, industry leaders, public officials and environmental advocates agree that consumers will see a rise in gas prices, but the amount remains uncertain.

“There’s a very large universe of variables which could affect gas prices on a daily basis, and we don’t set fuel prices,” said California Air Resources Board spokesperson Dave Clegern. He added, “We don’t see them going up more than a dime, at the most, based on any current cap-and-trade compliance costs.”

It is estimated that 25 percent of secured funds from the emissions trading program will be allotted to the state’s high-speed rail project.

California’s program includes an allowance reserve initially proposed by Nicholas Institute and Duke University researchers that prevents carbon allowance prices from reaching levels beyond the scope of purchasers.

Congress Prepare to Vote on Keystone XL Pipeline

The Senate Energy and Natural Resources Committee has cleared legislation to approve the Keystone XL pipeline, which would deliver some 830,000 barrels of oil a day from Canada’s oil sands to Gulf Coast refineries. But White House press secretary Josh Earnest, citing the Obama administration’s “well-established” review process, said, “If this bill passes this Congress, the president wouldn’t sign it.”

The pipeline has become a flash point in the debate over climate change and economic growth.

In a December 19 press conference, the president said, “I want to make sure that if in fact this project goes forward, that it’s not adding to the problem of climate change, which I think is very serious and does impose serious costs on the American people, some of them long term, but significant costs nonetheless.”

Critics of Keystone have pointed to the carbon intensive production of the crude it will carry. In an op-ed in The Hill, the new president of the Natural Resources Defense Council, Rheh Suh, called production of oil from Canadian tar sands an “environmental disaster.”

Supporters argue that Keystone will be a source of economic stimulus. In a statement, Energy and Commerce Committee Chairman Fred Upton said, “After six years of foot-dragging, it’s time to finally say yes to jobs and yes to energy. It’s time to build [this pipeline].”

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

World Sees Some Tangible Outcomes from U.N. Climate Summit

September 25, 2014
The Nicholas Institute for Environmental Policy Solutions at Duke University

The Nicholas Institute for Environmental Policy Solutions at Duke University

World leaders gathered in New York this week for the United Nations Climate Summit, a meeting aimed at raising carbon reduction ambitions and mobilizing progress toward a global climate deal. In speeches at the summit, President Obama and other leaders recognized that countries across the world are feeling climate change effects, particularly extreme weather.

“In America, the past decade has been our hottest on record,” said Obama, who also announced the launch of new scientific and technological tools to increase global climate resilience and extend extreme weather risk outlooks. “Along our eastern coast, the city of Miami now floods at high tide. In our west, wildfire season now stretches most of year. In our heartland, farms have been parched by the worst drought in generations, and drenched by the wettest spring in our history. A hurricane left parts of this great city dark and underwater. And some nations already live with far worse.”

Like Obama, representatives of other major nations had their own news. The European Union unveiled a commitment to reduce greenhouse gas emissions 40 percent from 1990 levels by 2030, and China shared plans to set aside $6 million for U.N. efforts to boost South-South cooperation on global warming.

Other summit outcomes included a commitment by several countries and nearly 40 companies to support alternatives to deforestation, ending the loss of forests—which accounts for 12 percent of all global greenhouse gas emissions—by 2030.

“Forests represent one of the largest, most cost-effective climate solutions available today,” the declaration said. “Action to conserve, sustainably manage and restore forests can contribute to economic growth, poverty alleviation, rule of law, food security, climate resilience and biodiversity conservation.”

More than $1 billion in new financial pledges were made to the Green Climate Fund, which was established at the 2009 Copenhagen Summit to help developing countries ease their transition away from fossil fuels and fight climate change.

The climate summit came on the heels of news that many countries are missing their emissions targets and that avoidance of runaway climate warming is slipping out of reach. A report by the U.N.’s Intergovernmental Panel on Climate Change that says the world is dangerously close to no longer being able to limit global warming to 2 degrees Celsius above pre-industrial levels—the threshold the U.N. declared as necessary to avoid dangerous consequences of climate change. Another study published Sunday in the journal Nature Geoscience put 2014 world carbon emissions at 65 percent above 1990 levels and further suggested that the U.N.’s two-degree Celsius goal was becoming unobtainable.

Obama Announces New Solar Efficiency Measures

The White House announced new steps intended to increase deployment of solar and other energy efficiency measures to cut carbon pollution by nearly 300 million metric tons through 2030. The efforts are predicted to save $10 billion in energy costs.

Among the measures:

  • The U.S. Department of Energy (DOE) is launching the Solar Powering America website, providing access to a wide range of federal resources to drive solar deployment.
  • The U.S. Department of Agriculture will award $68 million in loans and grants for 540 renewable energy and energy efficiency projects, 240 of which will be solar projects.
  • DOE and Lawrence Berkeley National Laboratory are releasingthree new studies showing that the cost of solar energy continues to fall across all sectors, which indicates that initiatives targeting soft costs are starting to work.
  • DOE is updating itsGuide to Federal Financing for Energy Efficiency and Clean Energy Deployment. The guide will highlight financing programs located in various federal agencies, such as the Treasury, Housing and Urban Development, and the U.S. Department of Agriculture, which can be used for energy efficiency and clean energy projects.
  • A new program will train veterans to install solar panels.

The Transition to Clean Energy

Despite these clean energy plans, data from the U.S. Energy Information Administration shows just how far the United States is behind Europe in its pursuit of non-carbon electricity.

“While most of the countries that produce at least half of their power from zero-carbon sources rely heavily on nuclear and hydroelectric power, the U.S. has been slow to convert its power sources to renewables like wind, solar, or biomass,” Slate reports.

A new report suggests Canada’s investment in clean energy is lagging—with the country spending $6.5 billion in renewable energy transition last year compared to the $207 billion spent worldwide.

“While other economics have made clean-energy industries and services a trade priority, some of us cling to the notion that our carbon-based fuels constitute our only competitive advantage,” the report says.

In the U.S., states like New York have plans to grow their clean energy contributions. New York State Energy and Research Development Authority submitted its plan for a new Clean Energy Fund—roughly $5 billion to grow clean energy programs in the next decade by continuing a utility bill surcharge.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

EPA Considering Lower Ozone Standard, Methane Strategy

September 4, 2014
The Nicholas Institute for Environmental Policy Solutions at Duke University

The Nicholas Institute for Environmental Policy Solutions at Duke University

In its Policy Assessment for the Review of the Ozone National Ambient Air Quality Standards report—released Friday—the U.S. Environmental Protection Agency (EPA) suggests revising the health-based national ambient air quality standard for ozone.

“Staff concludes that it is appropriate in this review to consider a revised primary [ozone] standard level within the range of 70 ppb [parts per billion] to 60 ppb,” the report said (subscription). “A standard set within this range would result in important improvements in public protection, compared to the current standard, and could reasonably be judged to provide an appropriate degree of public health protection, including for at-risk populations and life stages.”

The report is part of the normal EPA process to consider changing air quality standards. It recommends tightening current smog rules—now at 75 parts per billion—somewhere between 7 and 20 percent, echoing findings of the EPA’s science advisory committee in June. A final decision lies with EPA Administrator Gina McCarthy, who has a Dec. 1 deadline to issue a proposal on whether to retain or revise the existing standard.

Earlier in the week, McCarthy announced plans to issue a methane strategy emphasizing efficiency and reducing the need to flare gas—a strategy that could force oil and gas producers to cut emissions.

“We’re going to be putting out a strategy this fall and we hope everybody will pay attention to that effort,” McCarthy said at the Barclays Capital energy forum on Tuesday. “It will be addressing the challenges as well as the opportunities.”

Whether or not actual regulations for the industry will be issued is still being decided. McCarthy noted that the agency is “looking at what are the most cost-effective regulatory and-or voluntary efforts that can take a chunk out of methane in the system.”

This effort follows on the heels of an announcement by the White House that directed the EPA to develop an inter-agency strategy to combat methane emissions from oil and natural gas systems. If issued, rules to cut methane emissions would take effect in 2016.

China Eyes Carbon Market

Reuters reports that China will launch the world’s largest carbon market in 2016, although some provinces would be allowed to join later if they lacked the technical infrastructure needed to participate at the outset. “We will send over the national market regulations to the State Council for approval by the end of the year,” Sun Cuihua, a senior climate official with the National Development and Reform Commission (NDRC), told a conference in Bejing.

Confirming the earlier statement by Cuihua, Wang Shu, an official with the climate division of the NDRC said “We’ve brought forward this plan because it’s been prioritized in the central government’s economic reforms. The central government is pushing reforms, so everything is speeding up.”  According to Reuters, as in other carbon markets, power plants and manufacturers would face a cap on the carbon dioxide they discharge.  If an emitter needs to exceed its cap, it will have to purchase additional permits from the market to account for such emissions.

Court Finds BP Grossly Negligent in 2010 Gulf Spill

A U.S. District judge on Thursday ruled that BP was “grossly negligent” in the 2010 Deepwater Horizon explosion that killed 11 men and allowed millions of barrels of oil to flow out of the Macondo oil well into the Gulf of Mexico.

“The court concludes that the discharge of oil was the result of gross negligence or willful misconduct,” by BP, the ruling from U.S. District Court Judge Carl Barbier said. He found that BP was at fault for 67 percent of the spill. Two other companies involved—Transocean and Halliburton—were responsible for 30 and 3 percent, respectively.

“The law is clear that proving gross negligence is a very high bar that was not met in this case,” BP said in a statement. “BP believes that an impartial view of the record does not support the erroneous conclusion reached by the District Court. The court has not yet ruled on the number of barrels spilled and no penalty has been determined. The District Court will hold additional proceedings, which are currently scheduled to begin in January 2015, to consider the application of statutory penalty factors in assessing a per-barrel Clean Water Act penalty.”

Judge Barbier’s ruling could result in as much as $18 billion in fines under the Clean Water Act, according to The Hill.

Bacteria Used to Make Alternative Fuel

A study in the journal Nature Communications suggests that Escherichia coli, or E. coli bacteria, which is widely found in the human intestine, can be used to create propane gas that can power vehicles, central heating systems and camp stoves.

“Although this research is at a very early stage, our proof of concept study provides a method for renewable production of a fuel that previously was only accessible from fossil reserves,” said Patrik Jones, a study co-author. “Although we have only produced tiny amounts so far, the fuel we have produced is ready to be used in an engine straight away. This opens up possibilities for future sustainable production of renewable fuels that at first could complement, and thereafter replace fossil fuels like diesel, petrol, natural gas and jet fuel.”

Commercial production is still five to 10 years away—the level of propane produced by the team is 1,000 times less than that needed to make a commercial product. The process, which needs further refinement, uses E. coli to interrupt a biological process to create engine-ready propane rather than cell membranes.

“At the moment, we don’t have a full grasp of exactly how the fuel molecules are made, so we are now trying to find out exactly how this process unfolds,” Jones said.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Senate Clears Way for Keystone XL Pipeline

June 19, 2014
The Nicholas Institute for Environmental Policy Solutions at Duke University

The Nicholas Institute for Environmental Policy Solutions at Duke University

Editor’s Note: The Climate Post will not circulate next week. It will return July 3.

The U.S. Senate Energy and Natural Resources Committee voted 12 to 10 on a bill Wednesday approving the long-debated Keystone XL oil pipeline. The pipeline, which would transport oil from Canada to the U.S. Gulf Coast, requires presidential approval as it crosses international boundaries. Without a commitment from Senate Majority Leader Harry Reid to bring it to a vote by the full Senate, the bill is likely to languish.

Even so, Forbes deemed the vote “more than symbolic,” saying “It serves to tell the truth about Keystone XL, the need for new pipelines in this country, and for making our future energy security our top priority.”

Others, like Natural Resources Defense Council attorney Anthony Swift, disagreed. “This latest vote on the Keystone XL tar sands pipeline is all about politics and bad policy,” he said. “Locking ourselves into a massive infrastructure to move the dirtiest oil on the planet for the next 50 years would greatly worsen carbon pollution—at a time when we’re facing growing and grievous costs wrought by climate change.”

Another Canadian pipeline did get the official green light—the Northern Gateway project. Just as controversial as Keystone XL, the Northern Gateway pipeline would carry 525,000 barrels of oil a day from Alberta to British Columbia, where it would be loaded on supertankers for shipment to Asia through sensitive waters in the Pacific’s shipping lanes. Before construction can begin on the Northern Gateway pipeline, Enbridge must meet about 100 conditions imposed by the regulator. Inside Climate News focuses on the “eerie” parallels between the debates on each pipeline project.

As the United States Grapples with EPA Rule, Japan Considers Carbon Trading

The U.S. Environmental Protection Agency’s proposed rule to reduce greenhouse gas emissions from existing power plants has made it into the pages of the Federal Register, an event marking the start of a 120-day comment period.

In the weeks since the rule’s release, there has been closer examination of how states can meet emissions standards cost effectively. Some say energy efficiency is the answer. Another potential solution: wind and solar. In an op-ed in The Hill, representatives of the American Wind Association and the Solar Energy Industries Association point to the technologies’ cost decreases and significant carbon reduction benefits. Others like Ed Throop, director for the Sikeston Board of Municipal Utilities, are not so convinced. “The wind doesn’t blow all the time and the sun doesn’t shine all the time,” he said. It’s good, clean energy, but it’s not what you’d call baseload energy. You can’t call on it anytime you need it.”  

Japan has its own strategy for reducing greenhouse gas emissions. According to unnamed government sources, the country may have plans to agree to a carbon deal with India. Japanese companies would install carbon-cutting technology in India and in return receive carbon credits that can be used to offset their country’s emissions under the joint crediting mechanism. So far, Japan has signed agreements with 11 countries to launch the joint crediting mechanism. Several news outlets reported the likelihood of a bilateral agreement in early July during annual talks by Japanese Prime Minister Shinzo Abe and Indian Prime Minister Narendra Modi.

Ocean Sanctuary Would Close Parts of Pacific to Energy Exploration

President Barack Obama on Tuesday announced his intent to expand a U.S. sanctuary in the central Pacific Ocean. Slated to go into effect later this year, the proposal extends protection around the Pacific Remote Islands Marine National Monument to 200 miles and limits fishing and energy development. The White House said it will consider input from lawmakers and fishermen before making any final decisions about the geographic scope of the sanctuary.

In video remarks, Obama said climate change, overfishing and pollution have threatened economic growth opportunities in the ocean.

“We cannot afford to let that happen,” Obama said. “That’s why the United States is leading the fight to protect our oceans. Let’s make sure that years from now we can look our children in the eye and tell them that, yes, we did our part, we took action, and we led the way toward a safer, more stable world.”

Marine reserves, Smithsonian Magazine reports, can mitigate some of these problems by increasing the size and number of marine creatures within its borders and helping species deal with climate change.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.


States, Studies React to EPA Rule Release

June 12, 2014
The Nicholas Institute for Environmental Policy Solutions at Duke University

The Nicholas Institute for Environmental Policy Solutions at Duke University

On the coattails of the U.S. Environmental Protection Agency’s proposed rule for regulating carbon dioxide emissions from existing power plants, the White House issued a report on the health effects of climate change. The seven-page report outlines six major risks linked to rising temperatures—asthma, lung and heart illnesses; infectious disease; allergies; flooding-related hazards and heat stroke.

But one week after release of the EPA rule, most conversation centered on how the states will undertake their role in executing it. States in the Regional Greenhouse Gas Initiative were hopeful their participation in the carbon trading program would help meet the requirements of the new rule. Lawmakers in at least eight states approved anti-EPA resolutions. Kentucky has enacted a new law that could block the state from complying with the rule, and West Virginia sent a letter to the EPA requesting the agency to withdraw the rule.

The proposal, which assigns each state interim and final emissions goals and asks the states to develop plans to reach them, accounts for the regional differences that affect how hard it will be to reduce emissions. The differences are both practical—how expensive one energy source is compared to another—and political. The proposal does say it “anticipates—and supports—states’ commitments to a wide range of policy preferences,” including decisions “to feature significant reliance on coal-based generation.”

States using a more traditional regulatory approach to execute their plans may be choosing a more costly approach than putting a price on carbon. New research from the Massachusetts Institute of Technology finds that a regulatory standards approach cut less carbon at a higher price than emissions reductions that could be achieved under a cap-and-trade system (subscription).

“With a broader policy, like cap-and-trade, the market can distribute the costs across sectors, technologies and time horizons, and find the cheapest solutions,” said a study author Valerie Karplus. “So the market encourages emissions reductions from sectors like electricity and agriculture, and requires reductions from vehicles and electricity at a level that makes economic sense given an emissions target. On the other hand, narrow regulations force cuts in ways that are potentially more costly and less effective in reducing emissions.”

According to a Bloomberg national poll, Americans—by nearly a two-to-one margin—are willing to pay more for energy if it helps combat climate change. A recent Rasmussen Reports poll had similar findings, showing that most voters approve of the EPA’s new regulations even if there is a rise in energy costs.  Here at the Nicholas Institute for Environmental Policy Solutions, we looked ahead to the possibility of a further expansion of Clean Air Act standards limiting carbon dioxide emissions from other sectors. In particular, a new policy brief identifies key differences between the electric power and refining industries, highlighting their potential significance for regulating the refining industry. A companion working paper more deeply examines policy design as well as options for maximizing cost effectiveness while accounting for differences among refineries.

Study: Agricultural Emissions Can Be Curbed

Worldwide, agriculture accounts for about 80 percent of human-caused emissions of nitrous oxide, a greenhouse gas with 300 times as much heat-trapping power as carbon dioxide. Overuse of nitrogen fertilizer is increasing these emissions.

A study in the journal Proceedings of the National Academy of Sciences found that soil microbes were converting nitrogen fertilizer (subscription) into nitrous oxide faster than previously expected when fertilizer rates exceeded crop needs. In fact, the change was happening at a rate of about one kilogram of greenhouse gas for every 100 kilograms of fertilizer.

“Our specific motivation is to learn where to best target agricultural efforts to slow global warming,” said Phil Robertson, author of the study and director of Michigan State University’s Kellogg Biological Station. “Agriculture accounts for 8 to 14 percent of all greenhouse gas production globally. We’re showing how farmers can help to reduce this number by applying nitrogen fertilizer more precisely.”

The study offers proven ways to reduce nitrogen use—applying fertilizer in the spring instead of fall and placing it deeper in the soil for easier plant access. It also provides support for expanding the use of carbon credits to pay farmers for improved fertilizer management.

This week, the first agricultural greenhouse gas emissions offsets were issued to a Michigan farmer whose voluntary decrease of nitrogen fertilizer use on corn crops reduced nitrous oxide emissions.

Crude Oil Production to Increase

U.S. crude oil production will reach its highest level—9.3 million barrels per day—in 2015, according to the latest Energy Information Administration (EIA) forecast, issued Tuesday. The EIA estimates 8.4 million barrels per day for 2014—the United States averaged 7.4 million in 2013.

The increase will not have a dramatic effect on gas prices. The EIA reports that the U.S. average price for gasoline is expected to fall to $3.54 a gallon in September and to $3.38 a gallon in 2015.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Study Says United States Tops List of Global Warming Offenders

January 16, 2014
The Nicholas Institute for Environmental Policy Solutions at Duke University

The Nicholas Institute for Environmental Policy Solutions at Duke University

A new study by Canadian researchers finds the United States, Germany, the United Kingdom, China, Russia, and developing nations Brazil and India were responsible for more than 60 percent of global temperature changes between 1906 and 2005. The U.S. alone was responsible for 22 percent of the warning; China followed at 9 percent and Russia at 8 percent. Brazil and India each contributed 7 percent; the U.K. and Germany were each responsible for 5 percent. The findings, authors said, are particularly important for diplomats working toward a deal in 2015 to limit emissions.

“A clear understanding of national contributions to climate warming provides important information with which to determine national responsibility for global warming, and can therefore be used as a framework to allocate future emissions,” researchers said in their paper, published in the journal Environmental Research Letters.

To restrict warming to U.N. targets of 2 degrees Celsius, rising world emissions would need to drop 40 to 70 percent by 2050, Reuters reports. U.N. Framework Convention on Climate Change Executive Secretary Christiana Figueres said number two historic emitter China is taking the right steps to address global warming with its energy-efficiency standards for buildings and other renewable energy commitments. In the U.S. carbon emissions from energy fell 12 percent between 2005 and 2012, but the U.S. Energy Information Administration estimates a 2 percent increase in these emissions in 2013.

Global Energy Demand Growth, Renewable Investment Slowing

Global energy consumption continues to grow, but slowly. The fourth annual edition of the BP Energy Outlook 2035 pegged growth at 41 percent compared with 55 percent the last 23 years. Although demand from emerging economies is predicted to rise steadily, energy demand elsewhere will slow through 2035.

The U.S., the report said, will be able to provide for its own energy needs in the next two decades with the acceleration of shale oil and gas production. Natural gas, in particular, will overtake oil as the country’s most used fuel as early as 2027—accounting for 35 percent of U.S. consumption by 2035. Oil, however, will be the slowest growing of the major fuels with demand rising on average 0.8 percent annually. Still, U.S. oil imports are expected to drop 75 percent through 2035.

In Europe, the energy market is predicted to rise just 5 percent by 2030 and to become more dependent on imports of gas. China’s energy production will rise 61 percent with consumption growing 71 percent by 2035.

The release of BP’s Energy Outlook comes the same day Bloomberg New Energy Finance revealed that global investment in clean energy fell 12 percent last year.

“Global investment in clean energy was USD 254 billion last year, down from a revised USD 288.9 billion in 2012 and the record USD 317.9 billion of 2011,” a release from Bloomberg stated. In Japan, clean energy investment spiked as a result of small-scale solar installations.

RGGI States Reduce Emission Cap in 2014

States participating in the Regional Greenhouse Gas Initiative (RGGI) dropped their carbon dioxide emissions cap for power plants 45 percent for 2014 to 91 million tons. The initiative, which partners New York, Delaware, Maryland, Connecticut, Massachusetts, Rhode Island, Vermont, New Hampshire and Maine, aims to reduce these states’ power plant pollution by half of 2005 levels.

“RGGI has once again proven that state leadership provides the laboratory for innovation,” said Kenneth Kimmell, commissioner of the Massachusetts Department of Environmental Protection and RGGI chair. “RGGI is a cost-effective and flexible program that can serve as a national model for dramatically reducing carbon pollution for other states throughout the nation.”

Within the program, each power plant is assigned an amount of carbon dioxide it can release, but the plants can buy and sell allowances to increase or decrease their emissions. At the first allowance auction under the new limits March 5, states will offer up 18.6 million carbon dioxide allowances.

Appellate court arguments surrounding New Jersey’s 2011 exit from the trading program began this week.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Carbon Markets Show Glimmers of Recovery in 2014

January 9, 2014
The Nicholas Institute for Environmental Policy Solutions at Duke University

The Nicholas Institute for Environmental Policy Solutions at Duke University

A year after the launch of its cap-and-trade program, California formally linked its emissions trading scheme with Quebec’s—enabling carbon allowances and offset credits to be exchanged between participants in the two jurisdictions. The linkage, which marks the first agreement in North America that allows for the trading of greenhouse gas emissions across borders, is designed to escalate the price on the amount of carbon businesses can emit.

There is a “potential for this market to serve as an example for other North American subnational jurisdictions to follow if it can prove to be successful,” said Robin Fraser, a Toronto-based analyst with the International Emissions Trading Association.

Meanwhile, the European Union (EU) opted to beef up its carbon trading system. Carbon prices are poised to rebound from a three-year decline after the 28-country bloc decided to back a stopgap plan to reduce the number of pollution permits that have flooded the market. As a result, the cost of emitting carbon dioxide may increase more than 50 percent on average to $10.54 a metric ton by the end of 2014.

The “backloading” plan aims to remove 900 million permits from the EU market between now and 2016. The date on which the law is formally adopted will drive the quantity of permits that can be withdrawn from auctions this year.

“If the auction calendars can still be adapted by end-March, a total of 400 million allowances will be backloaded for 2014. This amount will be reduced to 300 million if backloading is initiated in April, May or June,” according to the European Commission.

The move, The Economic Times reports, may help to lead global carbon market recovery in 2014. Last year, global carbon markets’ value dropped 38 percent to $52.9 billion.

EPA Power Plant Rule Open for Public Comment

The U.S. Environmental Protection Agency’s (EPA) draft proposal limiting carbon emissions from new power plants was published in the Federal Register Wednesday, triggering a 60-day public comment period.

The delay between the Sept. 20 announcement of the rule and the Jan. 8 Federal Register inking had prompted speculation about whether the agency was reconsidering the controversial rule requiring plants be built with carbon capture and storage (CCS) capabilities if they burn coal (subscription). The rule has drawn criticism from coal industry supporters, who say that CCS technology is not viable. EPA Administrator Gina McCarthy, sees things differently.

“We have proven time after time that setting fair Clean Air Act standards to protect public health does not cause the sky to fall,” McCarthy said in September. She noted that the proposed rule, “rather than killing the future of coal, actually sets out a certain pathway forward for coal to continue to be part of a diverse mix in this country.”

Another EPA rule that’s meant to remove potential obstacles to implementation of CCS was also published in the Federal Register. This rule, according to the EPA, is expected to “substantially reduce” the uncertainty associated with identifying carbon dioxide streams under the Resource Conservation and Recovery Act as well as to facilitate deployment of geological sequestration.

Eruption of “Supervolcano” Could Have Global Climate Effects

A new study suggests that the magma chamber beneath one famous national park is 2.5 times larger than previously known and that it could have the potential to erupt with a force 2,000 times greater than Mount St. Helens in 1980.

Although there isn’t enough data to predict the timing of another Yellowstone eruption—the last one happened about 640,000 years ago—study scientists say instruments monitoring seismic activity would provide some warning. That eruption would leave volcanic material and gases lingering in the atmosphere that could result in a global temperature decrease.

“You’ll get ashfall as far away as the Great Plains, and even farther east,” said University of Utah scientist James Farrell of the findings presented at the American Geophysical Union’s fall meeting.

Two separate studies in the journal Nature Geoscience suggest just how the magma in “supervolcanoes” like the one in Yellowstone blow sky high: the buoyancy of the magma exerting pressure on the magma chamber walls eventually causes the chamber roof to collapse. Though rare, supervolcano eruptions have a devastating impact on the Earth’s climate and ecology, reports BBC.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.