United Nations Climate Change Conference Cancun – COP16 and CMP6

The United Nations Climate Change Conference to be held in Cancun, Mexico, from 29 November to 10 December 2010, encompasses the sixteenth Conference of the Parties (COP) and the sixth Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol (CMP), as well as the thirty-third sessions of both the Subsidiary Body for Implementation (SBI) and the Subsidiary Body for Scientific and Technological Advice (SBSTA), and the fifteenth session of the AWG-KP and thirteenth session of the AWG-LCA.

It is here, the sixteenth Conference of the Parties, or COP16. Over the next two weeks, delegates from 194 will try to make progress towards change for the better, to improve mitigation of and adaptation to climate change. Although it is not expected that negotiations in Cancun – and after meetings in Bonn, Germany, in June and August, and Tianjin, China,  in October this year – will result in a legally binding successor treaty to the Kyoto Protocol, hopes are high that delegates will overcome their current and past negotiating positions and start mapping processes to finalise and agree on  important decisions, and decide the eventual legal form of an international agreement. Here is what the UNFCCC Executive Secretary Christiana Figueres has to say:

If you are new to climate change negotiations, the UNFCCC provides a useful glossary of commonly used terminology.

Here is a quick reminder where things currently stand:

• The Conference of the Parties, at its fifteenth session (in Copenhagen, Denmark), took note of the Copenhagen Accord of 18 December 2009 by way of decision 2/CP.15.
• The Copenhagen Accord
  • emphasises a strong political will to urgently combat climate change in accordance with the principle of common but differentiated responsibilities and respective capabilities, recognises the scientific view that the increase in global temperature should be below 2 degrees Celsius;
  • states that enhanced action and international cooperation on adaptation is urgently required to reduce vulnerability and build resilience in developing countries;
  • about mitigation agrees that developed countries (Annex I Parties) would commit to economy-wide emissions targets for 2020;
  • agrees that developing nations (non-Annex I Parties) would implement mitigation actionsto slow growth in their carbon emissions;
  • recognises the crucial role of reducing emission from deforestation and forest degradation and the need to enhance removals of greenhouse gas emission by forests, and the need to establish a mechanism (including REDD+) to enable the mobilisation of financial resources from developed countries to help achieve this;
  • agrees that developed countries would raise funds of $30 billion from 2010-2012 of new and additional resources;
  • agrees a “goal” for the world to raise $100 billion per year by 2020, from “a wide variety of sources”, to help developing countries with mitigation efforts;
  • establishes a Copenhagen Green Climate Fund, as an operating entity of the financial mechanism, to support projects, programme, policies and other activities in developing countries related to mitigation; and
  • establishes a Technology Mechanism to accelerate technology development and transfer, guided by a country-driven approach.
• The total number of Parties that have expressed their intention to be listed as agreeing to the Copenhagen Accord is 140;
• Australia will reduce its greenhouse gas emissions by 25% on 2000 levels by 2020 if the world agrees to an ambitious global deal capable of stabilising levels of greenhouse gases in the atmosphere at 450 ppm CO2-e or lower. Australia will unconditionally reduce our emissions by 5% below 2000 levels by 2020, and by up to 15% by 2020 if there is a global agreement which falls short of securing atmospheric stabilisation at 450 ppm CO2-e and under which major developing economies commit to substantially restrain emissions and advanced economies take on commitments comparable to Australia’s;
• As part of a global and comprehensive agreement for the period beyond 2012, the EU reiterates its conditional offer to move to a 30% reduction by 2020 compared to 1990 levels, provided that other developed countries commit themselves to comparable emission reductions and that developing countries contribute adequately according to their responsibilities and respective capabilities;
• Russian Federation: the range of the GHG emission reductions (15-25%) will depend on the following conditions: Appropriate accounting of the potential of Russia’s forestry in frame of contribution in meeting the obligations of the anthropogenic emissions reduction; Undertaking by all major emitters the legally binding obligations to reduce anthropogenic GHG emissions;
• In the range of 17%, in conformity with anticipated U.S. energy and climate legislation, recognising that the final target will be reported to the Secretariat in light of enacted legislation. The pathway set forth in pending legislation would entail a 30% reduction in 2025 and a 42% reduction in 2030, in line with the goal to reduce emissions 83% by 2050;
• China will endeavor to lower its carbon dioxide emissions per unit of GDP by 40-45% by 2020 compared to the 2005 level, increase the share of non-fossil fuels in primary energy consumption to around 15% by 2020  and increase forest coverage by 40 million hectares and forest stock volume by 1.3 billion cubic meters by 2020 from the 2005 levels; and
• India will endeavour to reduce the emissions1 intensity of its GDP by 20-25% by 2020 in comparison to the 2005 level.

So, what is left to do? Despite the progress made over the last year, negotiators are still to detail and finalise

• a technology mechanism that will help countries develop and share new technologies;
• an adaptation framework;
• a REDD+ mechanism;
• a finance mechanism/fund;
• a common metrics for accounting of developed country emissions targets for pledges made under the Copenhagen Accord;
• a measurement, reporting and verification (MRV) process for developing country actions;
• pledges under the Copenhagen Accord, provide an opportunity for countries to strengthen the pledges, and decide that a robust scientific review should occur no later than 2015;  and
• what to do with the second commitment period of the Kyoto Protocol.

We will see how the next two weeks pan out. We will provide regular updates on the negotiations in Cancun.

Sustainability Reporting… So What?

Corporate Social Responsibility, Corporate Sustainability, Sustainable Development, Corporate Responsibility, Corporate Citizenship, responding to climate change, “the greatest moral, economic and environmental challenge of our generation“… There are many self-commitments by companies related to climate change, emissions management, sustainability, and a ‘green & clean’ image.

Sustainability reporting has become part of ‘good’ corporate reporting, demonstrating the “proactive stance” of companies towards fighting global warming, poverty, disease, and human rights violations. While some companies claim to have found value in practising sustainability, a large number of reports still are a response to external stakeholder pressures and expectations. So what does this mean for reporting? What is actually being reported in those sustainability reports? How meaningful are the commitments? How reliable is the information reported? And for whom are these reports written?

 

Some popular reporting guidelines/frameworks/indexes include:

• Global Reporting Initiative,
• Dow Jones Sustainability Indexes,
• Global Compact,
• FTSE4Good,
• Equator Principles,
• Carbon Disclosure Project,
• ICMM Principles,
• OECD Guidelines for Multinational Enterprises..

Take the Global Reporting Initiative (GRI) Guidelines for example. It has become the main point of reference for producing sustainability reports.  However, few companies are able to (or should) claim their reports – and therefore their actions – are ‘in accordance’ with the Guidelines. The issue here is that the GRI is a voluntary non-proprietary initiative, meaning that reporting `in accordance´ with the Guidelines is an option, not a requirement and self-declared by companies. So in a nutshell, a company producing a sustainability report based on the GRI Guidelines self-declares a reporting level (A, B, or C) based on its own experience of sustainability reporting and own assessment of its report content against the criteria in the GRI Guidelines. What’s more, a company can self-declare a “plus” (+) at each level (e.g., C+, B+, A+) if they have utilised an external assurance provider such as one of the big accounting firms – the same ones that until 4 years ago have declared climate change and sustainability a fad, but now are obviously “thought leaders”.

Or take the Dow Jones Sustainability Indexes. While one of the oldest sustainability reporting initiatives worldwide, it is has to be considered carefully. Similar to the GRI, it does rely on publicly available information, especially when it comes to environmental and social reporting. What is interesting here is that the allocation of vacant positions on those indexes is not always clear. BP has been recently removed from the Dow Jones Sustainability Indexes because of the oil spill in the Gulf of Mexico.  Halliburton took BP’s spot. This choice is not without controversy, as Halliburton has also been involved in the oil spill disaster and was less than transparent about it. Shell is no longer “on the list” -  , but companies such as Coca Cola or Dow Chemicals are. While having fancy sustainability statements on their website, Dow still refuses to clean up the site because – back then – it did not own or operate the plant. How does this go together with their sustainability reporting?

All that is not to say that there are a few good examples of corporate sustainability disclosure (e.g., Interface and Scandic Hotels), but the majority of companies still produce flashy PR documents with little content or significant commitment. Next time you read a sustainability report, be skeptical… be very skeptical. Do some background research. Don’t fall for the “frog-protection-scheme”, or the reduced office energy consumption of an Australian electricity generator. What targets has a company set? Is it significant? Is it an absolute or intensity target? What is the difference? How does this affect overall performance? How is a company performing in one country compared to another, and how is this reflected in reporting?

Sustainability reporting raises a lot of questions, but maybe they provide some food for thought. If all these companies are doing so great, how come we still have the same problems of pollutions, greenhouse gas emissions, poverty, exploitation, corruption, etc.? To use the BP example again – everyone was shocked to see the oil plumes, dying sea birds, communities losing their livelihoods. When BP (or any other petroleum company) drills for oil, and ships it to refineries where it is turned into fuels, plastics, etc., burnt and the emissions released into the atmosphere and plastic bottles filling up landfills, no one seems to care as long as we have a sustainability report.

Update on Japan’s and South Korea’s Emissions Trading Schemes

This week, the South Korean and Japanese governments released (final) drafts of their planned emission trading schemes.

Japan plans to launch emissions trading  in 2013, while South Korea expects emissions trading to commence in 2013 at the earliest. Japan already has inplace a voluntary emissions trading scheme as well as a mandatory cap-and-trade scheme for Tokyo. The South Korean government recently introduced a scheme which requires 374 local companies to set greenhouse gas reduction targets by September 2011.

The Japanese final draft follows an initial earlier presentation to an expert committee at the Environment Ministry at the end of August. The scheme would initially cover only CO2 (similar to the EU ETS), which currently accounts for about 95% of Japan’s greenhouse gas emissions. Power generators and other large emitters would be allocated emissions permits. The Environment Ministry hopes to finalise details by the end of this year, but has yet to come to an agreement with Ministry of Economy, Trade and Industry, which calls for consideration of not only absolute emission reductions, but also intensity reductions. Japan targets to cut greenhouse gas emissions by 25% by 2020 from 1990 levels on the condition a global climate deal is reached.

South Korea intends to plans to allocate more than 90% of carbon permits out for free upon the launch of their scheme. The bill has yet to pass the National Assembley and their is opposition from Korean business to a mandatory emissions trading scheme, argueing that economic growth should not be limited given that key trade partners Australia and the United States have no national policy in place. South Korea plans to cut emissions to 30% below business-as-usual levels by 2020. Currently,  historical emissions data is being gathered and CO2 reduction potential for the included facilities are estimated.

Both countries have previously agreed to exchange information on their emissions trading mechanisms.

This would make it very interesting for Australia, given that both Japan and South Korea are important trading partners, especially for the resources sector. What is more, the argument that a price on carbon in Australia would lead to carbon leakage and disadvantage trade-exposed companies seems to weaken noticeably. More and more countries and developing and implementing carbon price mechanisms, including India and China. And what happens if shipping will be captured under any form of scheme, be it domestic or international?

Productivity Commission Investigates Overseas Carbon Price Mechanisms

Today, Greg Combet, Australian Minister for Climate Change and Energy Efficiency announced that the Australian Productivity Commission will be investigating international approaches to carbon pricing over the next 6 months. It will study policies in countries including the United States, United Kingdom, Germany, China, Japan and India. This follows the OECD’s recent assessment of Australia’s economy and recommendation for Australia to set a carbon price sooner rather than later as the best option for cutting CO2-e emissions.

The announcement follows last week’s second meeting  of the Climate Change Committee, where international climate change policies were presented to the Committee, as well as briefings from the panel of experts on climate change science and impacts, energy markets and electricity prices and the scope of works for Garnaut’s updated Climate Change Review. It must be noted that a lot of the information presented to the Committee is neither new or surprising. As a matter of fact, large parts of information presented has been available (in the public domain) for years, but was largely ignored/neglected by Australian policy makers.

The investigation into overseas carbon pricing mechanisms over the next 6 months only shows that is still lagging behind in terms of responding to climate change. Many countries have already implemented a price on carbon in various forms, be it a carbon tax or an emissions trading scheme – and those countries have not fallen into anarchy. This is not to say that all these approaches are perfect or even effective. However, they represent a start, something to build on.

It’s almost like Groundhog Day, living the same day over and over – or seeing the same debate repeating itself over and over… Already back in 2004, there were signs that an emissions trading scheme may be installed in Australia as well. The State and Territory Governments of Australia have generally recognized the need for prompt action on climate change and global warming and have set up a National Emissions Trading Taskforce in January 2004. This taskforce presented its final discussion paper in December 2007 (a first discussion paper was released in August 2006) which outlined possible principles, design elements, and objectives for setting up a national emissions trading scheme. The discussion paper was informed by the practices of the EU-ETS, and also included the input of 130 stakeholders from industry and the community in Australia.

The National Emissions Trading Taskforce suggested to first include the stationary energy sector. Other sources of fugitive emissions as well as emissions arising from petroleum refining, industrial processes, waste, transport, agriculture, and land use/forestry activities would be excluded from greenhouse gas reduction liabilities under the proposed scheme. However, greenhouse gas emissions from these sectors might be included under the proposed scheme at a later stage, and businesses in these sectors that are able to reduce emissions (or undertake some form of carbon sequestration) may be eligible to generate offset credits.

Despite these efforts already undertaken by the National Emissions Trading Taskforce, the then Prime Minister John Howard  announced the formation of an independent joint government-business Task Group on Emissions Trading to advise on the possible implementation of a national emissions trading scheme to reduce greenhouse gas emissions. The Task Group’s Terms of Reference outline that an implementation of a national emissions trading system is regarded viable only if Australia’s competitive advantage of large reserves of fossil fuels and uranium are taken into account. So far, the Task Group raised a number of concerns, especially in regards to the protection of Australia’s competitive advantage (read coal and gas) and the advantages and disadvantages of adopting a national trading scheme in the absence of a developed international scheme.

The Task Group operated entirely separate to the National Emissions Trading Taskforce, and the National Emissions Trading Taskforce is not represented on the Task Group. This gave raise to debate whether the Task Group  “re-invented the wheel” given the fact the National Emissions Trading Taskforce has already undertaken substantial work in this area. However, there were expectations that John Howard, upon receipt of the Task Group’s report in May 2007, might commit to the introduction of some sort of national emissions trading scheme. The Government’s participation in an emissions trading scheme back then was already regarded essential, as significant investment must be made into the development of renewable technologies, carbon capture, and clean-coal technologies to preserve the economic benefits from Australia’s coal reserves.

What did John  Howard have to say?

This now raises the question why Tony Abbott doesn’t get it…

Also, how is all this different to what was outlined in the Garnaut Review or the proposed CPRS? Is it really necessary to have yet another round of “information gathering”, “community involvement”, and waiting for international agreement to miraculously occur in Cancun? Science has confirmed climate change as a significant issues to address. It is known that a price on carbon is not the end of the world. China, Japan, South Korea, the United States, and Europe have already implemented schemes and policies to deal with climate change. Yes, Australia in the past has been among the countries that enjoy the lowest energy costs per unit in the world, yes, it is likely that there will be increases in the cost of energy following from the pricing of carbon. But these price increases will reflect some of the externalities associated with the extraction and use of fossil fuels and reflect some of the cost of natural resources which in the past have often been regarded as a free good to society. Maybe it is simply time that the Government finally commits to action… Or will we wake up one day in 2013 being confronted with the same debate yet again?

Sure, the CPRS is not perfect… but it is a start.

What the UN ban on geoengineering really means – environment – 01 November 2010 – New Scientist

What the UN ban on geoengineering really means – environment – 01 November 2010 – New Scientist.