CARRYING CARBON TO COPENHAGEN: Australasia

Published by MAC on 2009-12-14
Source: UPI, Business Spectator

Regional mining profile #2

Can Australia be weaned from coal?

by Staff Writers

UPI

9 November 2009

Even where coal is king -- for domestic energy and as a lucrative export industry -- the case is being made for Australia to wean itself off coal, reports The Age.

Australia's heavy reliance on coal -- providing about 80 percent of the country's electricity -- makes it the world's biggest per capita producer of emissions. First mined in Australia in 1798, coal is the country's oldest export industry, and now the biggest.

Australia mines 318 million tons of black coal annually. Just one-fifth of that amount is used domestically, with the remainder exported.

Nearly half of Australia's coal is exported to Japan. In the past year, exports to China increased ten-fold, totalling more than 20 million tons. And Australia is well positioned to meet India's growing demand as well.

The world's appetite for Australian coal will see the country's export industry double in the next 10 years, reports The Age. While the government talks about reducing the country's carbon dioxide pollution, the newspaper says, when it comes to coal exports, the focus is on how to increase the numbers.

''There's so much coal around, if we were to stop producing it, our buyers would just shift to perhaps lower quality ones from South Africa, or Indonesia, and tweak the technology to be able to use it,'' says Australian Coal Association chief Ralph Hillman.

But Guy Pearse, a former Liberal adviser turned coal industry critic, says Australia should halt coal exports now, before it represents an even larger part of the country's economy.

He says a phase-out is not only essential, but can be managed. ''The idea that the economy crashes is completely implausible. "If you look at where the economy is heading by 2030, we'll still double it. ... You are still looking at a much larger economy and more prosperous people, even without coal," he told The Age.

When factoring in the 80 percent of the coal it exports, along with its own emissions from coal-fired plants, Australian coal is responsible for 1 billion tons of carbon dioxide each year. That's about 8.3 percent of the total global emissions from coal.

While some see the promise of "clean coal" through developing carbon capture and storage, Australia's Treasury says that technology is still 24 years away. But that's too late, say environmentalists and most scientists.

Greenpeace climate campaigner Julien Vincent thinks Australia should begin by capping coal exports, then reducing them, eventually, to nothing.

''Where is our moral credibility on climate change ... when we are prepared to flog off to the rest of the world twice as much of the most polluting fuel at the same time as we're calling on everyone else to act on climate change?'' he said, The Age reports.

 

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COPENHAGEN CALLING: The Penny drops

Giles Parkinson

Business Spectator

10 December 2009

It did not happen in the way that Prime Minister Kevin Rudd might have envisaged, but an Australian finally took centre stage at the Copenhagen climate talks, effectively bringing key negotiations over targets and the structure of a future treaty and the talks to a halt.

The emergence of Ian Fry - an Australian environmental law expert who serves as the lead negotiator for Tuvalu - as a hero for small and impoverished nations came as he called on the conference to debate tiny island nations' call for a legally binding treaty.

The audacity of his call to openly discuss the issue that many dare not speak brought sharp rebukes from the likes of China, India and oil states such as Saudi Arabia and Venezuela and resulted in the suspension of the main plenary session and a threatened walkout by other island states, effectively driving a wedge through the supposedly unified block of developing economies.

But at least it highlighted the apparent absurdity of the current negotiations. At the end of Day three of an 11 day process, the 190-something nations still haven't come close to deciding what sort of structure they want to adopt, let alone the targets.

Tuvalu's action rattled the Danish hosts, who were forced to call special consultative meetings through the evening in the hope that the plenary session could resume Thursday morning. It's likely to allow Tuvalu to have its wish of having an open discussion on the architecture, something the conference had managed to avoid to date. You'd have to be an international negotiator of some experience to understand why, and even then most might struggle, such are the unique circumstances of these talks.

Of course, Tuvalu and other nations want more than a binding treaty. They want a target of 350 parts per million, the level which scientists reckon could cap global temperature rises at 1.5c. But that's a target that would make the negotiators of most industrial nations and emerging economies choke on their hors d'oeuvres. It seems China is proving difficult, even going as far as complaining about the COP 15 logo in a public forum.

The current negotiations aim for a 450ppm cap, in a yet undefined structure, meaning a 2 degree rise at best and a 50 per cent chance of avoiding catastrophic climate change. Tuvalu doesn't fancy those odds.

A difficult start

[Australia's] Climate Change Minister Penny Wong flew into Copenhagen today and made it clear that the talks were not going as well as hoped, with wildfires emerging on a host of negotiating points, including finance and the accounting of emissions from land use and forestry.

"It's been a difficult start. Some of the language has been disappointing ... some unhelpful," she told her first news conference. "We've got to move away from blame shifting and finger pointing ... there's a whole range of sticking points."

Wong's arrival, and that of other environment ministers over the next 24 hours, heralds the start of a new phase in the negotiations.

After they make their opening public statements, the various lines of talks are soon to move from open session to closed session, the resolution of sticking points at the very public cafes dotted around the centre will move behind closed doors, and by Sunday the Danish hosts hope they will have something to work with to present to the leaders to figure out the numbers by the end of next week.

Exactly what that will be is anyone's guess. Wong said the least Australia wanted was an "effective political agreement" with "immediate operational effect". That's what Obama said too: "If we don't grasp this opportunity we will regret it. If we don't get it, it will be a very bad thing for all nations and for multi lateralism."

New wind

Located not quite halfway between Swedish nuclear power stations and a coal-fired power plant near Copenhagen, the Middelgrunden offshore wind farm just near the capital stands as a sentinel to the country's commitment to renewable energy. The country sources more than 20 per cent of its power from wind - more than any other country - and has ambitions to lift that to 50 per cent. But what is particularly interesting is the fact that more than half of the wind turbines are owned by community groups, with some 220,000 people, or nearly 5 per cent of the population, each investing $6000 to $7000 to buy a share of the clean energy future.

It's a concept that fascinates Simon Holmes a Court, who is coordinating the development of Australia's first community owned wind farm at Hepburn Springs, where more than 1100 people have bought shares in a project to build two turbines to service the towns of Hepburn and Daylesford. During a visit to Middelgrunden today, Holmes a Court said he thinks Australia could support up to 100 such projects, involving wind and biomass and possibly solar, within the next decade. He is chairing an organisation called Embark that is trying to put together a template or a tool box to help make that happen.

"The country is trying to get to 20 per cent renewables by 2020, but Daylesford is going to get to 100 per cent by 2010 at a cost of $5000 per household, and it's not sending us back to the stone age," he said. And if Embark did succeed in generating similar projects Australia might have 100,000 or more of its citizens with a direct stake in clean energy, and an interest in government policy and the price of instrument such as RECs. Nothing like bringing it into the mainstream.

Carbon trading model

Even after spending 12 hours at the Bella centre, the urge to take part in the opening of a nightly business networking event, Climate Spark, proved irresistible. So I and several dozen BiNGOs (business delegates), including a handful of Australian legal and advisory types who asked to go nameless until they figured out how to bill their clients, found themselves in the NASA Lounge, an uber-trendy nightclub that resembles the inside of an esky.

It was as bizarre as anything I've seen in or out of the Bella Centre. The business types were asked to cheer wildly as the stars of the night, a group of earnest clean energy leaders from Denmark were introduced, and led through a series of dull but worthy interviews. Why the cheering? Well, it was being broadcast on a Reuters Business TV channel, although heaven knows who was watching. It was all very nice, but very long-winded, and the conversation in the crowd quickly returned to the regulatory risk of investment in renewables.

The atmosphere soon changed, though, as the young and the extremely beautiful sauntered in, or queued outside in the cold, in anticipation of an appearance by The Backstreet Boys. I was introduced to a stunning young Czech who might have been a model, but turned out to a carbon trader looking to expand her business in Asia and Australia. How did she get into the emissions trading business? "I used to sell weapons," she said. "Carbine, handgun, all sorts." Really? To whom? "Anyone who needed protection." Silly question, really.

Fossils of the Day

The environment movement was so enamoured with Tuvalu's stance it awarded the nation its first Ray of the Day award.

1st prize fossil: Canada and Croatia - for arguing against using 1990 as a base year for emission reduction targets.

2nd prize: Russia - for suggesting that President Medvedev's recently announced 20-25 per cent reductions were not actually submissions for the Kyoto Protocol but "an important political statement".

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COPENHAGEN CALLING: Rent seekers weigh in

Giles Parkinson

Business Spectator

11 December 2009

Once again it was the island of Tuvalu and its Australian negotiator Ian Fry grabbing attention in Copenhagen, standing up to India and China and bringing yet another plenary session to an abrupt halt as the tiny nation insisted that its calls for a binding treaty be heard in formal session.

The bow-tied Fry clearly has a sense of the theatrical, and waited till the last moment before pressing the "intervention" button, insisting to the Danish hosts that its proposals be heard in full and not behind closed doors and forcing yet another suspension.

Tuvalu is being widely admired for its bold opposition to the two giants of the developing bloc, and for highlighting the key challenges facing the talks. "It certainly underlines that there is a lack of consensus about how any agreement would be translated into current frameworks," said Clayton Utz climate change partner Brendan Batemen, a key observer of the climate talks. And it needed it be brought to the surface, along with its calls for a 350ppm emissions cap, rather than 450ppm.

Australia and other industrialised nations are also quietly supportive of their position, if a little worried that the dramatic interventions may reduce the time available to reach any agreement. "We share their objectives in a comprehensive agreement that is binding," said Climate Change Minister Penny Wong. "But it's a question of using the time wisely."

Little Island who roared

The emergence of Tuvalu as the "little island who roared" is actually part of a deliberate strategy produced by the highly organized Alliance of Small Island States. The 42-strong AOSIS is part of the broader group of G77 nations, and like the ALP believes it should show solidarity at the final hurdle even if its views differ from other members, particularly the oil-producing countries and the larger economies within the group.

Tuvalu quite deliberately is not a member of the G77, hence its ability to act as an aggressive spoiler and advocate of the AOSIS objectives. "It's a great strategy," noted Baker & McKenzie Sydney-based partner Ilona Millar, who was once on the OASIS negotiating team.

Off the planet

There's another reason for the hard-line stance of the island nations. In a remarkable case of its occasionally breathtaking incompetence, the UN has hung a massive globe from the ceiling of the main auditorium - and somehow forgot to include some of the island nations that are the most vulnerable to storms and rising sea levels. The AOSIS chair, Grenada's Dessima Williams, could not conceal her anger. It had happened before, she said, at the very first COP meeting in 1995. "We have already been wiped from the map," she said. "We are fighting for our lives."

It's not the only howler from the UN at these talks. The large banners adorning the conference centre included the logo COP 15, but not CMP5, the sessions that refer to the Kyoto Protocol. It was as though the UN had already recognised the treaty was dead, a desired result of the US. China objected strongly and CMP5 was added overnight.

Chalk and cheese

In the first three days of the conference, environmental groups, business lobbyists and other interested observers have been squeezed in ever increasing numbers into the Australian delegation's headquarters for the daily briefings by lead negotiators.

The friendship, however, is clearly becoming strained as the talks evolve and optimism grows of some sort of deal out of Copenhagen. The green groups are urging Australia to lift its 5-25 per cent range to 15-25 per cent, arguing that the 15 per cent target conditions have already been met at least in spirit if not in detail.

The lobbyists, naturally, are apoplectic at the idea and arguing intensely against it, or indeed any move to 15 per cent and beyond. The gloves are off. "The rent seekers have left Canberra to arrive in Copenhagen to attempt to have it stopped," said Climate Institute policy director Erwin Jackson.

Rent asunder

Little wonder that Senator Wong decided to split the groupings when she hosted the briefings on her first full day at the conference. She is said to be happy to argue the point with one party or other, but not sit in the middle of two parties trading blows.

The business lobby - which once formed part of the official delegation as such talks but is now excluded - includes Australian Coal Association chief Ralph Hillman, Australian Aluminium Council's Miles Prosser, the Minerals Council's Brendan Pearson, Australian Industry Group's Michael Hitchens, as well as representatives from Australian Plantation Products, the Paper Industry Council and Xstrata Coal.

Hillman, who has led an aggressive campaign against the ETS on behalf of the coal industry, understands the process well, having been a key negotiator for Australia in the Kyoto Protocol talks. He was once Australia's Ambassador for the Environment.

Change of heart

Not all heavy emitters are quite so skittish about the prospect of emission reductions. While the Australian emitters put their case to Wong, Jim Rogers, the head of Duke Energy, the third largest utility and third biggest emitter in the US, was repeating his call in the main press room for a strong, legally binding international treaty, and an early passage of an ETS in his own country.

Rogers wants price signals now so that the likes of Duke and others can make the investment in clean and renewable technology. Several other utilities, that have quit the US Chamber of Commerce over its stalling tactics against an ETS, as well as Duke, have suspended their contributions to the chamber in protest at its stance.

Later, in yet another press briefing room, beyond the cacophony of activity at the NGO exhibition space, another four business lobby groups, the US Business Council for Sustainable Energy, the International Emissions Trading Association, the Carbon Markets and Investors Association and Global Wind Energy Council, called for legally binding emissions targets to unlock the finance to meet the $2-$3 trillion funding task to meet energy transformation. "We need those binding targets to take to the banks and, if needed, the courts, so this investment can happen," GWEC head Steve Sawyer said.

Watching from the side

Australian businesses, however, can only watch from the side, because their own ETS is sitting on the backburner, caught between the wedge politics of the Rudd government and the hairy-chested antics of the Abbott opposition.

A seminar on the Australian CPRS was held at the nearby Crowne Plaza Hotel as part of two weeks of side events organized by IETA. A crowd of around 50 took part, but most were Australian businesses already familiar with the issues and (mostly) wondering 'what if?'. And their tone was generally pessimistic. Little wonder that hardly any international business observers attended. They have little reason to be interested in carbon abatement opportunities in Australia.

Lotus Eaters

Many of the business types find the Crowne Plaza to be something of an oasis, away from the extraordinary crowds at the Bella Centre, with its ideological stricture on food consumption. At the Crowne Plaza, the delegates can comfort themselves in the bland familiarity of 5-store hotel catering and can even drool over a $US48,000 Eco Lotus Elise, the ultimate in carbon cool accessories, parked in the foyer.

Not every BiNGO is keen on being force-fed the organic food that prevails at the Bella Centre, where the options for a quick bite comes down to a choice between Fair Trade Double Chocolate Chunk Cookies and the Organic Dark Chocolate Pumpkin Seed Snack.

Another grumbling has been the lack of lids on take-away (organic) coffees, apparently as a security measure so (organic) soy lattes cannot be used as missiles. If so, it was something of an oversight to allow the (organic) meatloaf onto the menu. That would surely do some damage if tossed into a crowd.

Fossil of the Day

The environmental groups issued their second consecutive Ray of the Day award, this time to France for acting to close a loophole in proposed land-use accounting measures that had been championed by Sweden, Finland and Austria.

As for the fossils:

1st Prize: Poland - for actively blocking the proposed unconditional upgrade of the EU's carbon emissions reduction target to 30 per cent.

2nd prize: Germany - for failing to clarify that climate finance should be additional to existing aid.

3rd prize: New Zealand - for the declaration by PM John Key that he hoped he could walk away from the conference with a target at the bottom end of the declared 10-20 per cent range.

What a week

So at the end of the first week, exactly what are the prospects of a some sort of meaningful deal being concluded by December 18? Well, no worse than they were at the start of the process, and maybe even better. As one delegate observed: "There's a clear tunnel of opportunity to suggest there will be an agreement. And a clear tunnel of opportunity to suggest there won't."

Wong, who held bilateral talks today with the heads of the Chinese and US delegations, and dines tonight with UNFCCC chief Yvo de Boer and COP 15 host Connie Hedegaard, was less focused on the negatives in her press conference and was back in diplomatic mode. "This is what we are here to do. If there is going to be an agreement there would need to be compromise on all sides."

There has certainly been movement on other issues that will directly impact the ability of Australian business to offset their emission liabilities. Negotiations on REDD, the protocol that will monetise the protection of rainforests, are progressing and the UN has already published a draft text on improvements to streamline approvals for the investments on the Clean Development Mechanism, where credits are produced from investments in abatement projects in developing countries and which are of particularly interest to Australian companies. The fate of Australia's proposal to include carbon capture and storage in the CDM is unclear. It has met with strong opposition from Brazil and green groups.

One opportunity ends

But here's a consideration for Australian emitters. Deutsche Bank's Mark Lewis, one of the pre-eminent analysts in the market, says he is sceptical about an agreement that would be robust enough for Europe to increase it target to a combined 30 per cent.

However, he says that if the market senses it might be a possibility, the impact on the price of carbon in the EU market would be immediate - and could jump from current levels around €14 to as much as €20 within days. This would have a flow-on to the international offsets market, and therefore to the base case for an Australian carbon price and the end of a pre-emptive arbitrage opportunity in the international markets. Some Australian businesses, and their boards and investors, might then start wondering why they hadn't been planning for this a little earlier. And others will just be mighty angry with Abbott and Co.

 

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Cook Islands environmental lobbyist says deep sea mining bill fast-tracked

Radio New Zealand

10 December 2009

A Cook Islands environmental lobbyist is accusing politicians on both sides of the house of fast-tracking a bill that paves the way for mining of the seabed around the country.

The Deep Sea Mining Bill will allow minerals such as manganese, cobalt and nickel to be extracted from nodules on the country's sea floor.

A spokesperson for the Deputy Prime Minister's office says the legislation is environmentally robust and mining will begin only after the establishment of a controlling authority.

But Noeline Kainuku-Browne says the public was not given enough time to prepare submissions against the bill.

"I can't see how you can do any mining and gather all these minerals supposedly on the seabed without ruining the environment within that area. And I'm just concerned that we're also supposed to be a whale sanctuary in the sense of I can't see if you're going to be doing all of that surely it's going to cause some sort of sedimentation of some description or you know dirtying of the water anyway of some description which I'm very concerned will wreck our tuna fishing industry as well."

© Radio New Zealand International

 

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Why do climate deniers hold sway in Australia?

If Australia does not silence its sceptics and reduce its emissions there is a real risk of the nation becoming uninhabitable

Fred Pearce

The Guardian

1 December 2009

Whatever happens in Copenhagen this month, Australia's climate policy will still be in a mess.

Australia is the hottest and driest continent on Earth. Parts have been embroiled in record drought for the past decade, leaving reservoirs empty and agriculture decimated. Things got so bad last week that thousands of camels besieged a small town in the Northern Territory in search of water. Even the "ships of the desert" couldn't cope.

Yet, while many Aussies embrace a love of the outdoors both in body and spirit, something in the frontier ethic of the "lucky country" still leads some to peer at the horizon and declare: "Mate, we don't believe in climate change." Maybe they have been out in the sun too long, for the country is living on the edge.

Aussie scientists were among the first to warn about global warming. Back in 1988, they printed off posters showing the fin-shaped roof of the Sydney Opera House poking out of a blue sea.

But Australia also has a history of climate denial. Twelve years ago at the Kyoto climate negotiations, other rich nations promised cuts in carbon emissions. But Australia won permission to increase its emissions by 8%. And even that wasn't good enough for the prime minister John Howard, who eventually pulled out of the Kyoto protocol with George W Bush.

Recently, the Labour prime minister Kevin Rudd rejoined Kyoto. But the sceptics are unrepentant. The Aussie geologist Ian Plimer is the latest international pin-up among climate sceptics.

Why do the deniers hold such sway? For one thing, Australians have the highest per capita carbon emissions of any major developed country thanks to its sprawling suburbs and heavy coal use. According to figures submitted by Canberra to the UN, Australia's emissions from burning fossil fuel have risen by 30% from 1990 to 2007 - more even than the US.

Also, Australia is by some way the world's largest exporter of coal, the world's dirtiest fuel. They are the boys with the black stuff. Giant ports like Gladstone and Newcastle export ship out enough coal each year to put more than half a billion tonnes of carbon dioxide into the air. When the Chinese coal mines can't keep up with domestic demand, they phone Digger.

Australia's industrialists have lobbied loudly against any limits on their carbon emissions. Last year, the Business Council of Australia called Rudd's cap-and-trade climate plan a "company killer", and declared war on the policy. Now they have seen off the leader of the opposition Liberal Party, Malcolm Turnbull, because he backed the Rudd plan.

They will be pleased with themselves. But whatever happens in Copenhagen this month, Australia's climate policy will still be in a mess. Either the world adopts tough emissions cuts - in which case demand for Australian coal will shrink and the country will face painful economic reforms to cut its soaring domestic emissions. Or the world fails to come up with tough emissions cuts - in which case, say its scientists, there is a real risk of the entire nation becoming uninhabitable.