Climate Change Update

Climate Change Update

11th May 2006

An improved carbon market...new coal technology to capture CO2: can these really offset the alarming rise in greenhouse gas emissions? It hardly seems likely, as Canada emerges as a super-polluter and China and India's contributions to adverse climate change start to rival that of the biggest baddy of all.

Canada's Greenhouse Gas Emissions Far Above Target

PlanetArk, CANADA

11th May 2006

OTTAWA - Canada's emissions of greenhouse gases are now 35 percent above the level it promised to reach under the Kyoto climate change accord and the country would have to ground every train, plane and car to meet its target, Environment Minister Rona Ambrose said on Wednesday.

Ambrose, a member of the new Conservative government, says Canada has no chance of meeting a Kyoto commitment to cut emissions to 6 percent below 1990 levels by 2008-12. The target was agreed by the previous Liberal government.

"Later this week we will release Canada's greenhouse gas inventory and it will show that Canada's (level of emissions) is now 35 percent higher than the Kyoto targets that the Liberals set," she told Parliament.

"To put that into perspective ... that would mean that today we would have to take every train, plane and automobile off the streets of Canada. That is not realistic."

The most recent data showed Canada's emissions were running 24.4 percent above 1990 levels. These will rise as oil sands are further developed in the energy-rich western province of Alberta -- which is also the main political base of the Conservative government.

Canada Must Quit as Chair of Kyoto Process - Greens

PlanetArk, CANADA

11th May 2006

OTTAWA - Green groups across Canada united on Wednesday to demand Environment Minister Rona Ambrose step down as chairwoman of international talks looking into ways to strengthen the Kyoto protocol on climate change.

Ambrose, who says Canada has no chance of meeting its Kyoto emissions targets, is due to chair a meeting in Bonn next week that will group signatories to Kyoto as well as nations that have not made commitments to cut the greenhouse gases that are seen as the cause global warming.

The Climate Action Network -- a collection of about 100 environmental and other activist groups -- said Ambrose's clear disdain for Kyoto could help wreck the talks.

"If you're in negotiations to cut emissions and doing nothing but bad-mouth (Kyoto) ... you'll do immense damage to the international process," said John Bennett of the Sierra Club, who also heads the network.

Ambrose is a member of the new minority Conservative government, which won the Jan. 23 election. The party's power base -- as is Ambrose's electoral district -- is in the energy-rich western province of Alberta, where sentiment is decidedly anti-Kyoto. Under Kyoto, Canada is committed to cutting its emissions to 6 percent below 1990 levels by 2008-12. The latest data show emissions are running 24.4 percent above 1990 levels and these will rise as the oil sands are further developed in Alberta.

Last month, Ambrose said Canada backed a breakaway group of six nations that favors a voluntary approach to cutting emissions. The group includes the United Sates, which abandoned Kyoto in 2001 on the grounds it would cause economic damage.

"Her remarks have made it clear that the Canadian government has abandoned Kyoto," Bennett told a news conference. "This government was afraid of the oil industry and decided to back off."

Last month, Ottawa shut down 15 research programs related to Kyoto. A spokesman for Ambrose said the minister would react to the network's comments later on Wednesday.

Ambrose says the government is working on a made-in-Canada plan to tackle climate change and will not try to meet its Kyoto target by buying emissions credits abroad.

"It's fascinating to see how much of a page (Prime Minister) Stephen Harper has taken from President Bush, who quit Kyoto while promising something better instead," said Stephen Guilbeault of Greenpeace Canada.

In a separate move designed to put pressure on Harper, the opposition Bloc Quebecois said it would introduce a motion in Parliament demanding the Conservatives produce a plan by Oct. 15 this year on how to meet Canada's Kyoto targets. Legislators are due to vote on the non-binding motion next Tuesday and it looks set to pass, since all three opposition parties will vote in favor.

"If the government refuses to back this motion ... it is clear that Canada will be undermining the Kyoto treaty in Bonn rather than promoting it," said the Bloc's Bernard Bigras.

China, India are Fast-Growing Polluters - World Bank

PlanetArk, US

11th May 2006

WASHINGTON - Greenhouse gas pollution from China and India rose steeply over the last decade, but rich countries, including the United States, remain the world's biggest polluters, a World Bank official said on Wednesday.

The United States accounts for nearly a quarter -- 24 percent -- of all emissions of carbon dioxide, the main greenhouse gas linked to global warming, said Steen Jorgensen, the bank's acting vice-president for sustainable development.

The countries of the European Monetary Union contribute 10 percent. But China and India are catching up.

"(Greenhouse gas emissions from) China and India are growing very rapidly at the moment, very much because of inefficient investments in energy, in power generation," said Jorgensen.

China, the world's second-largest polluter after the United States, increased carbon dioxide emissions by 33 percent between 1992 and 2002, according to the bank's "Little Green Data Book," a survey of world environmental impact released on Tuesday. India's emissions rose 57 percent over the same period.

Jorgensen said those likely to suffer most from the consequences of these emissions, including the increasingly severe weather patterns associated with global climate change, are farmers in the poorest parts of the world.

'GLOOM AND DOOM'

"The gloom and doom (is) if you are a farmer on a small island state somewhere, looking at sea level rise, looking at more severe weather -- those are really the people we should be concerned about," Jorgensen said in a telephone interview from New York. "It's an unequal distribution of the people who pollute and the people who suffer from the pollution."

He said the main reason emissions from China and India are rising so fast compared to the rest of the world, which had a 15 percent rise in carbon dioxide emissions between 1992 and 2002, was older, inefficient coal-fired power plants in both countries.

While cleaner coal-fired plants are possible, India and China cannot afford to make the switch.

"They can't afford to take (the old, heavily polluting power plants) out of commission to repair them because basically, if you don't have power for even three months, that has huge economic costs for them," Jorgensen said.

Even as emissions rose rapidly in these two growing economies, the growth of emissions slowed in some of the richest industrialized nations, the bank's report found. And still, people in the developed world used about 11 times as much energy per person as those in poor countries, Jorgensen said.

More information and a link to the report are available online at www.worldbank.org/environmentalindicators.

Story by Deborah Zabarenko

REUTERS NEWS SERVICE

Kyoto Gives Poor Countries US$2.7 Billion Boost

PlanetArk GERMANY

11th May 2006

COLOGNE, Germany - Rich nations' funding of clean energy projects in developing countries reached US$2.7 billion in 2005, through deals allowed under the global Kyoto treaty to tackle climate change, the World Bank said on Wednesday.

The Kyoto Protocol allows companies and investors in richer countries to invest in and profit from cuts in emissions in poorer nations of heat-trapping greenhouse gases.

Developing country investment was part of a global carbon market which grew ten-fold to US$11 billion in 2005, the World Bank's third annual report on the global carbon market, released at a carbon markets conference here, showed.

"The biggest cause for celebration is the participation of developing countries," the World Bank's Karan Capoor, who is also the co-author of the report, told delegates.

The global carbon market is based on the fact that some companies can cut pollution more cheaply than others, allowing them to sell that pollution reduction in units called carbon credits.

Investors in rich countries can profit by playing differences in these carbon credit prices around the world.

"It's a win-win situation, a win for the (host) country and a win for the financial sponsor who makes money on his investment," Malik Khan, Pakistan's environment minister, told the conference. "It shows that protection of the environment will be key for economic development."

Kyoto commits some 40 industrialised countries to binding pollution cuts by 2008 to 2012. While trading is already in full swing, buyers will not be able to book Kyoto project credits in their accounts until next year.

A pipeline of more than 750 projects is nearing an environmental milestone of cuts for delivery by 2012 of 1 billion tonnes of greenhouse gases -- with 940 million tonnes of carbon dioxide cuts so far -- its administrators told the conference.

CHINA SELLS

Europe's carbon market accounts for the biggest slice of the 2005 global pie, at US$8.2 billion, and allows the continent's smokestack industry to meet carbon emission targets by buying carbon credits. Developing countries can sell carbon credits either into this European carbon market or elsewhere. Japan in 2005 was the biggest single buyer, at 38 percent of the total of projected emission cuts.

Japan is struggling to meet its Kyoto target through pollution cuts at home.

The biggest seller of credits was China, at 66 percent of the total. China plans an extra 160 GW of power by 2010, and this huge build, alongside planned energy efficiency savings, offers prime territory for clean energy investment.

"The Clean Development Mechanism is a very good mechanism to bring developing and developed countries together to tackle global warming," Gao Guangsheng, director at the National Climate Change Office at the National Development and Reform Commission in China, told the conference.

Story by Gerard Wynn

REUTERS NEWS SERVICE

Carbon Market Grows 10 Fold, Needs Openness - World Bank

PlanetArk, GERMANY

11th May 2006

COLOGNE, Germany - The global carbon emissions market reached a value of US$11 billion in 2005 on the back of Europe's pioneering trading scheme but it needs to be more transparent, the World Bank said on Wednesday.

The world's carbon market, to which the EU scheme contributes 75 percent, grew to ten times the value of 2004, the World Bank's carbon finance unit said in a report.

A 60 percent price collapse in the EU market in the past three weeks has cast a shadow over the market's growth, as evidence has grown in Europe of over-generous emissions limits and poorer demand than expected for the pollution permits.

To avoid such upsets, the unit suggested countries should issue estimates of emissions every quarter. Verification of emissions is currently done on an annual basis.

"We need quarterly emissions estimates so that there are no surprises going forward," said Karen Capoor, the main author or the report presented at a news conference during a trade fair in Cologne.

Since the prices fell, critics have said EU countries in the scheme gave their industries overly generous pollution quotas.

"We need more emphasis on verification to prevent a systematic inflation with overgenerous allocations," Peter Kreuzberg of utility RWE's trading unit RWE Trading said at the World Bank news conference.

Kreuzberg said the market had been a success. It has just completed its first year after being established by the EU as a cornerstone of efforts to set commercial incentives to tackle climate change. "Recent events may distract from the success story of developing a new market from scratch over the past 18 months," he said.

GOING GLOBAL

The World Bank figures showed that the global market, although driven by the EU scheme, relies crucially on the contribution of developing countries, which contributed nearly half of greenhouse gases emission reductions last year.

The EU market, which was launched in 2005, was already worth US$8.2 billion at the end of the year. This corresponded to 322 million tonnes of CO2 equivalents and represented an increase of nearly 40 times over the tentative broker-based market that operated in 2004, the World Bank said.

Other significant traded markets were a New South Wales scheme operated in Australia, UK emissions trading, and the Chicago Climate Exchange in the US

Trading in project-based CO2 permits -- generated via emissions reductions in poorer countries where they are cheaper to achieve -- totalled 374 million tonnes, three times as much as the year before.

The biggest buyers of carbon permits outside the EU in the 15 months to March 2006 were Japan, Britain, Italy and the Netherlands, the research showed.

The biggest sellers were China and Brazil.

Story by Vera Eckert and Gerard Wynn

REUTERS NEWS SERVICE

New Coal Technology Could Help Climate - US Expert

PlanetArk, NORWAY

11th May 2006

OSLO - A Norwegian firm's technology for cheaply removing greenhouse gas emissions from coal-fired power plants is likely to appeal to countries from China to the United States, a Massachusetts Institute of Technology professor said on Wednesday.

Sargas, a privately-owned Norwegian group which cooperates with Germany's Siemens AG, said its technology can clean more than 90 percent of carbon dioxide emissions from a gas-fired or coal-fired plant, at lower costs than its rivals.

"The combination of technology which is basically mature and able to capture carbon dioxide at a small differential cost makes it very attractive," said Gregory McRae, a professor of chemical engineering at the Massachusetts Institute of Technology (MIT).

McRae, who is studying "clean coal" systems, accompanied Sargas leaders on Wednesday when they outlined the technology to Norway's ministers of Energy and Industry after Siemens certified that the process was feasible.

"As engineers, and interested in the environment, we're looking for technologies which are now cost effective and which allow capture of carbon dioxide," said McRae, who is paid as a consultant to Sargas. Many nations are trying to limit emissions of carbon dioxide, the main gas blamed by most scientists for global warming that could spur more droughts, more powerful storms and raise sea levels by almost a metre by 2100.

And many countries, from the United States to China, depend on coal which is a heavily polluting fossil fuel. "China is building one 500-megawatt power plant a week without any capture technology," McRae said.

CHINA, INDIA

He said Sargas technology could be interesting to developing nations such as China or India, which might have to limit emissions of carbon dioxide in coming years, and to industrial nations such as the United States that are big coal burners.

The UN's Kyoto Protocol now obliges most rich nations to cut emissions of carbon dioxide by 5.2 percent below 1990 levels by 2008-12. Washington pulled out of Kyoto in 2001, saying it was too expensive and wrongly excluded developing nations.

Sargas reckons that the cost of generating electricity from [its technology] will be 25 percent higher with its carbon capture system -- known as modified pressurised fluidised bed combustion -- than if generated with no capture. Coal is cheaper than gas, however.

"The idea is that by burning coal under pressure you can reduce the size of the power plant and you can make it easier to capture the carbon dioxide," McRae said of the system.

"The cost is substantially lower than of competing capture technologies, which we believe are less mature," Sargas chairman Henrik Fleischer told Reuters.

He said Sargas technology cost less than rival integrated gasification combined cycle power plants.

Sargas said a coal-fired plant using its technology could produce electricity for US$0.049 per kilowatt/hour, assuming a coal price of US$65 a tonne. Gas-generated electricity would cost twice that amount, partly due to higher gas costs.

Carbon dioxide could either be buried beneath the ground or pumped into oil reservoirs to help keep up pressure and force more oil to the surface.

Siemens said in a statement that it had tested the Sargas target of cutting carbon dioxide by 90 percent and nitrous oxide emissions to five parts per million from a gas-fired plant. Siemens said similar figures would apply to a coal-fired plant.

Story by Alister Doyle, Environment Correspondent

REUTERS NEWS SERVICE