by Jules Evans | Mar 23, 2009 | Climate and resource scarcity, Economics and development
There looks likely to be another acrimonious debate in the US over President Obama’s plan to auction 100% of the carbon permits generated if the US signs up to a cap on its emissions at the Copenhagen summit.
Big US utilities, particularly coal-powered ones, say they want the permits to be given them for free, otherwise, they say, the cost will be handed on to consumers:
Some cap-and-trade corporate allies and lawmakers from both parties say the plan would amount to a tax increase falling most heavily on consumers whose power comes from coal, the most polluting power source.
“It was wrong-headed thinking,” said Michael Morris, chief executive officer of American Electric Power Co, the biggest U.S. electricity producer from coal. “Don’t call it cap-and-trade when it’s really a tax,” he said in an interview.
The Columbus, Ohio-based utility wants no-cost permits at the outset. Congress faces “an awfully long debate” if a bill imposes all those costs on companies, he said.
Speaking last week with a group of CEOs in Washington, Obama indicated he may budge from his 100 percent auction stance. He said he will work with companies to “find a structure that arrives at that right balance” between giving permits away and selling them. “We are not going to be able to move this in an effective way without partnership with the business community.”
Come again?
Phase One of the EU carbon trading system handed out free permits to European utilities, who still passed on the cost to their consumers, and pocketed the record profits. It was punishing consumers, and rewarding pollutors with a multi-billion-euro windfall.
That’s why the EU has moved to an auction system in Phase 2 – indeed, it’s holding an auction tomorrow.
Obama should stick to his guns.
Meanwhile, the EU is debating whether to set a reserve price for carbon permits, after the price of carbon collapsed from Eu30 per tonne in the middle of last year, to Eu10 now.
PWC is the latest to call for governments to set a floor price below which they won’t sell.
More opposition from Barclays Capital, which is by far the biggest trader in the carbon market, and a good reply from John Hawksworth, the author of PWC’s report:
Trevor Sikorski, a director in Barclays Capital’s carbon trading division, said that any attempt to impose a floor price would represent “a market distortion that is unneeded”. He added that even a floor price would not guarantee investment in low-carbon technologies, arguing that the role of prices was not to assign capital expenditure but instead “equilibrate markets by putting a price on the scarcity of the commodity… if the market needs investment to equilibrate, then it will signal this.”
However, Hawksworth said that while imposing price floors and ceilings would serve to distort conventional markets, the artificial nature of the carbon market meant that it represents an exception to the rule.
“Normally you would say that if a price is low, it is low for a reason,” he admitted. “But in this instance the market has been created for the specific reason of bringing down emissions and that is difficult to achieve if the price gets too low, so governments need the flexibility to address excessive price volatility.”
by Jules Evans | Mar 17, 2009 | Climate and resource scarcity
There’s a climate change protest in Coventry this Thursday lunchtime, led by NASA scientist James Hansen, and organised by Christian Aid. It is partly protesting against the proposed new coal-fired power station at Kingsnorth. Hansen’s participation is a notable example of the new stridency and political activism among climate change scientists:
Prof Kevin Anderson, the research director at the Tyndall Centre for Climate Change Research in Manchester, said: “Scientists have lost patience with carefully constructed messages being lost in the political noise. We are now prepared to stand up and say enough is enough.”
by Jules Evans | Mar 14, 2009 | Climate and resource scarcity
Political leaders are driven by a desire for power. They will tend to follow whatever is politically expedient in order to gain power. Right now, it is politically expedient only to make token efforts to try and prevent climate change, without making the electorate fore-go habits to which they have become accustomed.
But leaders are also driven by vanity, and have a powerful desire to be seen well by ‘posterity’ or the ‘history books’. Just look how long Tony Blair spent, while leaving office, in trying to explain his ‘legacy’, or at George W. Bush’s mea culpa last press conference.
This, it seems to me, is one way political leaders might be persuaded to take dramatic action now on climate change: scientists explain to them very clearly what will happen if the level of CO2 does not fall, they explain very clearly the huge loss of life this will cause,and the actions that need to be taken now if this situation is to be avoided.
And then you tell them that history will judge them. If you consider the infamy in which Adolf Hitler is now held: Hitler was responsible for the deaths of, how many, 40 million people?
That is, unfortunately, a drop in the ocean compared to how many will die in the coming decades if this generation of political leaders fail to do what is necessary.
The terrible suffering of World War II was, on the whole, confined to a generation. If the world warms by 4-6 degrees, the suffering will be felt by many generations, all of whom will look back to the beginning of the 21st century, when political leaders were clearly warned what was going to happen, and what was needed to be done to avoid it, and who failed to do what was necessary.
What this means is, it’s a terrible time to be a politician. Never has the chalice of power been so poisoned. On the one hand, you have to tell an electorate grown complacent with prosperity that they must radically alter their lifestyles and fore-go many activities they now take for granted. As a result, they may very well be voted out of office, or even laughed out of office, for doing do.
On the other hand, if they don’t do this, their names will be mud for decades, even centuries.
They will say ‘we didn’t know’ or ‘it wasn’t politically possible’ or ‘we didn’t have enough time’. But the history books will show that they were told what needed to be done, and they failed to act.
On the other hand, if they do act, if they finally recognise the gravity of the threat facing us, explain to the electorate what needs to be done, and begin leading their electorates through the necessary changes, they will win a place in the history books as great as Churchill, Gandhi, or Martin Luther King .
The line between historic hero or historic catastrophe is very thin right now, and it is not leaders’ response to the credit crunch which will decide their place in the eyes of posterity.
by David Steven | Mar 5, 2009 | Climate and resource scarcity, North America
Yesterday, I put some words into Barack Obama’s mouth – re-jigging JFK’s famous ‘man on the moon’ speech as a call for an immediate peak to global emissions.
Setting a goal that emissions should never rise again, is something I have argued we should do now, rather than hoping we’ll simply be braver or more desperate in five or ten years’ time.
Originally, I suggested this should be a major plank for civil society campaigning – and I still think it should be. But governments can play too. Let’s look at the policy from vantage point of the Obama administration. (more…)
by David Steven | Mar 4, 2009 | Climate and resource scarcity, North America
Extracts From Special Message to the Congress on Urgent National Needs
President Barack Obama
Delivered in person before a joint session of Congress
May 25, 2009
[With apologies to JFK’s ‘man on the moon‘ speech.]
The Constitution imposes upon me the obligation to “from time to time give to the Congress information of the State of the Union.” While this has traditionally been interpreted as an annual affair, this tradition has been broken in extraordinary times.
These are extraordinary times. And we face extraordinary challenges… [The President’s discussion of economic, security and resource threats has been cut from this transcript.]
…Finally, if we are to win the battle to secure our shared future, then we must act decisively to stabilize the world’s climate. Otherwise, we will begin to suffer the consequences of our folly within a generation – not just at home, but across the world, as we struggle to sustain security and prosperity on an increasingly crowded planet.
Since early in my term, serious efforts to tackle climate change here in America have begun. We have examined where we are strong, and where we are not, where we may succeed and where we may not. Now it is time to lead the world in a great new enterprise, one which will hold the key to our future on earth.
I believe we possess all the resources and talents necessary. But the facts of the matter are that we have never made the international decisions or marshaled the international resources required for such leadership. We have never before specified long-range goals on an urgent time schedule, or managed our resources and our time so as to insure their fulfillment.
I therefore believe we should set these global and national goals.
First, I believe that the world should commit itself to achieving the goal of stopping the inexorable rise in greenhouse gas emissions that is doing so much to put our planet in peril. I don’t believe we should aim to achieve this goal in 2020 or 2030 or 2050 – but right now in 2009, making this year the high water mark for mankind’s global experiment with the global climate.
Second, once we have bought emissions to a standstill, we should aim to force them down year by year – slowly at first, but at an ever increasing pace, triggering a radical transformation that brings us to a near zero carbon world by mid-century.
(more…)
