“If the question is whether India will take on binding emission reduction commitments, the answer is no. It is morally wrong for us to agree to reduce when 40 percent of Indians do not have access to electricity,” said a member of the Indian delegation to the recently concluded U.N. conference in Bonn, Germany, which is a prelude to a Copenhagen summit in December on climate change.

Days after the Obama administration unveiled a push to combat climate change, Indian officials said it was unlikely to prompt them to agree to binding emission cuts, a position among emerging economies that many say derails effective action.

 ”Of course, everybody wants to go solar, but costs are very, very high.” India’s position goes to the heart of the vexing international debate over how quickly nations should try to phase out carbon-spewing fuels such as coal and switch to renewable energy sources such as wind and solar.

In India, the debate has been cast as a choice between pursuing urgently needed economic growth to reduce poverty and addressing climate change. More than 60 percent of India’s power is generated from coal. As India rapidly climbs the list of global polluters, analysts say coal will continue to fuel the economic demands of the country’s 1.1 billion people for two decades. But India has repeatedly said that it will not compromise on growth by committing to emission reduction goals set by developed nations, which it deems bigger culprits when it comes to pollution.

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/12/AR2009041202452.html?hpid=sec-world

“Selling allowances would not be happening if they’d had to pay for them in the first place,” he says.

“If everybody had to pay for the allowances on a pay-as-you-go basis, like other commodities they consume, the price for carbon allowances would have fallen anyway as a result of this recession,” he says.

David Victor, head of Stanford University’s Energy and Sustainable Development Program, says that between a third and two-thirds of CDM offsets do not represent actual emission cuts.

http://newsvote.bbc.co.uk/mpapps/pagetools/print/news.bbc.co.uk/1/hi/business/7857771.stm?ad=1A crucial scheme to control greenhouse gases is under threat due to the recession. Under the Kyoto Protocol adopted in 1997, since ratified by 183 countries, industrialised nations agreed to reduce their emissions of gases such as carbon dioxide (C02) which cause global warming.

Among the measures introduced was the European Carbon Trading System, whereby governments put a price on the amount of greenhouse gases that can be emitted by any company.

By forcing companies to pay for the right to pollute, it was hoped they would be more inclined to clean up their act.

Companies are issued emission permits and are required to hold an equivalent number of allowances (credits) which represent the right to emit a specific amount.

The total amount of allowances and credits cannot exceed the cap, limiting total emissions to that level.

Companies that need to increase their emission allowance must buy credits from those who are willing to sell.

In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions by more than needed.

Three-quarters of the main polluting greenhouse gas, carbon dioxide, comes from burning fossil fuels – oil, gas and coal.

The environmental group Carbon Trade Watch complains about imbalances in the sources of the burning of fossil fuels, as the world’s richest countries consume more per capita than countries with larger populations.

For instance the USA produces 24% of the world’s CO2 emissions yet has only 4.5% of the world’s population. Conversely India has 16.7% of the world’s population yet only produces 4% of the CO2 emissions.

It seemed like a market solution to global warming in Europe, but initially many of these permits were given away for nothing.

Now, as recession bites, industries like steel, cement and glass may be polluting less, but only because they’re producing less.

So companies are desperately selling off the carbon credits they no longer need to bolster their faltering balance sheets

That has led to a big drop in the market value of carbon permits, and as the right to pollute becomes cheaper, there is less incentive for companies to stop polluting.

Mark Lewis, a carbon analyst at Deutschebank, told World Business News that the recession has cast a spotlight on the frailties of emissions trading.

“Selling allowances would not be happening if they’d had to pay for them in the first place,” he says.

“Getting them free allows them to be sold on a risk-free basis and that is exacerbating the fall in the price of credits,” he adds.

Each year the cap on emissions gets tougher, but the price of the credits would have come down anyway as a result of the financial downturn.

“If everybody had to pay for the allowances on a pay-as-you-go basis, like other commodities they consume, the price for carbon allowances would have fallen anyway as a result of this recession,” he says.

In the past, Russia has managed to achieve its Kyoto targets without any pain because its industrial output has declined so sharply.

Critics of carbon trading maintain this proves the inherent weakness of such systems, but Mr Lewis does not think a straight tax on fossil fuels would provide a better solution.

“It might be simpler on one level,” he says, “you would know in advance what the price was but you wouldn’t get any certainty on the level of emissions reduction.”

Another measure introduced under the Kyoto Protocol to curb greenhouse gases is also coming into question.

This is the clean development mechanism (CDM), which allows industrialised countries to invest in projects that reduce emissions in developing countries – as an alternative to what would undoubtedly be more expensive emission reduction programmes in their own country.

However, in recent years, criticism against the mechanism has increased.

Offset projects under Kyoto are only supposed to qualify for carbon financing if they represent emissions reductions above and beyond what would have happened anyway.

In practice, large numbers of projects that were already well under way, are presenting themselves as CDM projects in order to gain an extra revenue stream, and these projects do not represent additional emissions reductions, Carbon Trade Watch maintains.

David Victor, head of Stanford University’s Energy and Sustainable Development Program, says that between a third and two-thirds of CDM offsets do not represent actual emission cuts.

If an offset project does not represent reductions and is being used to justify increased emissions at some other point, it actually represents a net increase in emissions.

If a high number of CDM projects are not additional, there is a real danger of a “carbon bubble”.

Scientists are adamant that CO2 emissions must be sharply cut in the next 10 years otherwise there will be irreversible damage to the planet.

Otherwise, it might be too late to repair the damage the planet has already suffered.

At least three regional U.S. groups are in various stages of development: Reggie, the Western Climate Initiative and the Midwestern Greenhouse Gas Reduction Accord (the latter two won’t be operational till 2012). A mandatory cap-and-trade program is in its fourth year in Europe. Trading volume there doubled last year, and prices have fluctuated, hitting $43 a ton at one point before sliding to $13 recently.

http://online.barrons.com/article_print/SB123216140270692819.html

Two of the biggest voluntary carbon offset standards bodies – the global Voluntary Carbon Standard and the US-based Chicago Climate Exchange – are fuelling a revolt against the offset scheme set up under Kyoto to generate carbon abatement projects in developing countries.

http://www.climatechangecorp.com/content.asp?contentid=5862

Two of the biggest voluntary carbon offset standards bodies – the global Voluntary Carbon Standard and the US-based Chicago Climate Exchange – are fuelling a revolt against the offset scheme set up under Kyoto to generate carbon abatement projects in developing countries. The organisations tell ClimateChangeCorp that they are willing to consider carbon credits rejected by the scheme, known as the Clean Development Mechanism (CDM), for sale under their own standard.

David Antonioli, recently appointed head of the Voluntary Carbon Standard (VCS), criticises the CDM for “unfairly” dismissing offset projects that fall outside the boundaries of the scheme’s narrow rules.

On top of this, the CDM has come under fire from carbon offset project developers, who last month set up a pressure group, called the Project Developers Forum, to voice their discontent about the way their proposals are handled. The CDM executive board, made up of an international panel of experts, have the final word on whether to award carbon credits under Kyoto. The board currently rejects around 10% of offset projects under deliberation, while project assessors, the gatekeepers to the board, automatically reject many more for failing to meet CDM rules.

Along with CDM rules, carbon offset project developers criticise the board’s tactics, which they say include changing regulations at short notice in order to disqualify projects, and rejecting projects on minute details that project assessors claim are immaterial.

According to Martin Enderlin, leader of the Project Developers Forum pressure group and an ex-member of the CDM board, the CDM’s approach to project approval has been “paranoid” for about a year, ever since carbon-offsetting cowboys began to be exposed in the media and by independent studies. The CDM executive board is not shy of penalising its stakeholders – project assessors are also feeling the pressure after one of the biggest CDM auditing firms, Det Norske Veritas, was suspended last month for failing to comply with internal management rules.

Enderlin says that the new super-cautious attitude of the board is to find each project “guilty until proven innocent”, a process that currently takes around a year to complete. He accuses the CDM board members of lacking the expertise to credibly contest project assessors and of playing a “political game” through the approvals process and with their continuous rule-making. “I’ve never seen a standard evolve as much as the CDM standard,” he says.

This month’s international climate negotiations in Poznan, Poland, brought about a host of recommendations to the CDM executive board on how to tidy up its act. Much of the emphasis was on the need for the board to be more transparent and democratic in its decision making process.

The ultimate fear of project developers is that the current decision-making structure of the CDM may be too inefficient to persuade negotiators to bring the scheme into the post-2012 climate agreement – a decision which could leave them creditless and out of pocket.

At the Project Developers Forum launch event, CDM board members retaliated by voicing their own doubts about the “environmental integrity” of the project developers.

Voluntary markets: A solution or sidetrack?

The culture of mistrust between the CDM board and project developers is being compounded by the voluntary offset sector’s readiness to take rejected Kyoto credits off the hands of developers.

Enderlin warns that selling rejected credits on the voluntary markets would be “extremely risky” and would both undermine the CDM’s position and increase its paranoia about carbon cowboy developers.

Whilst some developers, such as global offset developer Ecosecurities, deny trading rejected Kyoto credits, others, like Trading Carbon, based in London, say they are happy to sell credits that have failed to meet the criteria of the CDM board, as long as they are from “high quality” offsetting projects. These would include projects that have failed bureaucratic CDM rules on application time schedules, for example, but not those failing because of a lack of carbon abatement “additionality” – in other words, because the carbon abatement in question doesn’t really need the incentive of credits to go ahead.

Rafael Marques, senior vice president of the Chicago Climate Exchange (CCX), the first cap-and-trade system to be set up in North America, and representing a fifth of companies in Dow 30 Index, tells ClimateChangeCorp: “The CCX is willing to review all projects submitted to the programme, regardless of decision by the CDM”. He goes on to explain that the “CCX is a separate system, with its own set of rules and approval criteria”.

David Antonioli of the VCS, which was set up by project developers in partnership with the Climate Group, says that voluntary standards need to reserve the right to take on failed CDM projects that may have been rejected on immaterial grounds, or – as is the case with forestry projects – were simply “too innovative” to be covered by CDM rules.

However, the voluntary market has yet to prove its worth. Voluntary credits rely heavily on corporate and individual buyers of carbon offsets. On the Chicago exchange, credits currently trade at around a dollar and a half per tonne of abated carbon, and the VCS has yet to set up its first credit registry.

Meanwhile, carbon credits are trading on the EU Emissions Trading Scheme for around €14 per tonne, as Kyoto-compliant countries buy up vast quantities of credits generated under the CDM in order to meet their 2012 emissions targets.

The European Parliament approved a cut in carbon dioxide emissions to 20 percent below 1990 levels by 2020, heeding warnings of severe weather, famine and drought as the atmosphere heats up.

World leaders will meet in Copenhagen next December to try to agree a global deal, but preparatory talks in Poland ended last week with deep divisions between rich and poor nations.

http://www.reuters.com/articlePrint?articleId=USTRE4BG2SH20081217

The European Union finalized plans for its battle against global warming on Wednesday, seeking to lead the way toward a broad alliance including other big polluters like China and the United States.

The European Parliament approved a cut in carbon dioxide emissions to 20 percent below 1990 levels by 2020, heeding warnings of severe weather, famine and drought as the atmosphere heats up.

The deal takes on a greater importance coming just before Barack Obama assumes the U.S. presidency, amid hopes in Europe he will cooperate more on tackling climate change than incumbent George W. Bush.

“Happily Bush is going,” said European Environment Commissioner Stavros Dimas. “Everybody knows what Mr. Obama has set as priorities — energy security and climate change.”

World leaders will meet in Copenhagen next December to try to agree a global deal, but preparatory talks in Poland ended last week with deep divisions between rich and poor nations.

The advancing economic crisis had at times threatened to derail the EU’s climate negotiations.

A myriad of concessions to water down the costs for industry helped pin down a deal, although this fueled criticism from environmental groups.

DISSENT

Chancellor Angela Merkel and Prime Minister Silvio Berlusconi had fought successfully for industries like German steel, chemicals and cement and Italian glass and ceramics, as well as their powerful auto sectors.

Lawmakers approved measures on Wednesday to cut CO2 emissions from new cars by 18 percent by 2015, after intense lobbying by the industry won it a three year reprieve.

“There was an explosion in dissent and manufacturers were at loggerheads,” said Italian socialist Guido Sacconi, who led the rules for cars through parliament.

“Trying to secure a conclusion came when the car industry found itself at the epicenter of the economic crisis and this heightened difficulties,” he added.

Green group politicians branded the rules as a sell-out to industry, while industry group ACEA repeated calls for billions of euros in EU support to help manufacturers meet the targets.

The biggest threat to a deal was the opposition of nine former communist nations, which feared the deal would ramp up costs for their highly polluting coal-fired power sectors.

To buy their support, the EU has offered a partial exemption and agreed to give them 12 percent of revenues from the EU’s flagship emissions trading scheme (ETS), which makes industry buy permits to pollute.

The European Commission, which originated the climate laws in January, demonstrated its appetite for further action by adopting rules on eco-friendly design on Wednesday, which would cap the energy consumption of televisions on standby mode.

Environmentalists vented their anger over the dilution of the EU’s ambition, most of them criticizing the high levels of carbon offsets, which allow member states to pay for most of their emissions cuts in developing nations rather than at home.

“People will look back at 2008 and ask…knowing what they knew then, why did they not do more to save all of us from the unbearable impacts from a warming planet?” said British Green group politician Caroline Lucas.

http://www.reuters.com/article/environmentNews/idUSTRE4BB36720081212?sp=true

Europe secured the world’s widest agreement to battle climate change on Friday after paying east European states to accept changes that will punish their heavily polluting power sectors and ramp up electricity prices.

The historic deal to cut carbon dioxide by a fifth by 2020 was secured despite an economic crisis by allowing a myriad of exemptions for industry, sparking criticism from environmental groups.

“This is a flagship EU policy with no captain, a mutinous crew and several gaping holes in it,” said Sanjeev Kumar of environment pressure group WWF.

But French President Nicolas Sarkozy rejected that view, saying: “This is quite historic.”

“You will not find another continent in this world that has given itself such binding rules as we have just adopted,” he added.

The agreement came after a year-long battle dominated by a struggle between eastern and western Europe over the costs.

The nine east European nations were seen as the final blockage to agreeing a package of measures aimed at tackling climate change but which will ramp up costs for their highly polluting coal-fired power sectors.

Two swathes of funding will be distributed to them taken from around 12 percent of revenues from the EU’s flagship emissions trading scheme (ETS), which makes industry buy permits to pollute.

The money is partly framed as a reward for the massive drop in emissions they experienced when their industry collapsed in the wake of communism.

Their power sectors were also partially exempted from paying for emissions permits from the ETS on a sliding scale starting with paying for 30 percent of emissions in 2013, rising to 100 percent in 2020.

BAD GUY

Hungary had battled to the end of negotiations for more money, while Italy fought to protect its glass, ceramics, paper and cast iron industries, and eventually dropped a threat to block the deal.

“I can’t use any veto on the climate question because I can’t cast myself in the bad-guy role since the left would use this position to fight me politically,” said Italian Prime Minister Silvio Berlusconi.

Measures were agreed to reduce the risk that carbon curbs would hurt European industry and reduce its ability to compete with less regulated rivals overseas. The biggest threats are seen for steel, aluminum, cement and chemicals.

European industries exposed to international competition will receive free emissions permits if they will see a 5 percent increase in costs, a measure that is viewed as covering over 90 percent of EU industry.

Britain came away having secured a boost to funding for innovative technology to capture and bury emissions from power stations underground in depleted North Sea gas fields.

“Gordon Brown made clear this was one of his priorities not only because of the environment benefits, but also because it offer Europe the opportunity to lead the pack, securing jobs and growth,” said a British diplomat.

http://www.nytimes.com/2008/12/11/business/worldbusiness/11carbon.html?_r=1&ref=science&pagewanted=print

The case of Germany, Europe’s largest economy, illustrates the many problems in Europe’s approach. For instance, RWE, a major German power company and Europe’s largest carbon emitter, received a windfall of about $6.4 billion in the first three years of the system, according to analyst estimates. Regulators in that country have accused utilities of charging customers for far more permits than was allowable.

This week, leaders of the European Union are meeting in Brussels to shape the next phase of their system, and find ways to cut greenhouse gas emissions by 20 percent by 2020. They also seek to close loopholes worth billions to various industries, while confronting the same tug of war between long-term environmental goals and short-term costs that proved so vexing the first time around.

The European summit meeting coincides with a round of negotiations among 190 nations to establish a new global treaty limiting greenhouse emissions, a treaty the Obama administration might seek to join.

Pressure From Lobbyists

During long negotiations on the landmark Kyoto climate treaty more than a decade ago, the Clinton administration pushed to include emissions trading as a means of achieving the goals, favoring that approach over energy taxes or traditional regulatory limits on emissions.

Even after the Americans backed out of ratifying Kyoto, Europe decided to set up the world’s first large, mandatory carbon-trading market. “I was eager to put it in place as soon as possible,” said Margot Wallstrom, the European Union’s environment commissioner then.

From the start, Ms. Wallstrom, now a vice president of the European Commission, said she was lobbied heavily by governments and by companies seeking to limit the financial burden.

The initial idea of charging for many of the permits never got off the ground. Many politicians feared that burdening European industries with extra costs would undercut their ability to compete in a global marketplace. In the end, the decision was made to hand out virtually all the permits free.

With European Union oversight, individual countries were charged with setting emissions levels and distributing the permits within their borders, often to companies with strong political connections.

Jürgen Trittin, a former Green Party leader who was the German minister of environment from 1998 to 2005, recalled being lobbied by executives from power companies, and by politicians from the former East Germany seeking special treatment for lignite, a highly polluting soft brown coal common around central Europe.

The framework of the European system put governments in the position of behaving like “a grandfather with a large family deciding what to give his favorite grandchildren for Christmas,” Mr. Trittin said in an interview.

The debates on what limits to set for carbon dioxide emissions were particularly arduous. Mr. Trittin recalled a five-hour “showdown” in March 2004 with Wolfgang Clement, then the economy minister, in which he lost a battle to lower the overall limit. It was eventually set at 499 million tons a year, a reduction of only 2 million tons.

In a recent e-mail message, Mr. Clement did not challenge the details of his former colleague’s account, but he characterized as “just nonsense” Mr. Trittin’s claims of undue industry influence. He said the Greens were unrealistic about what could be achieved.

“I reproached them — and I’m doing this still today — that at the end of their policy there is the de-industrialization of Germany,” Mr. Clement said. “That’s our conflict.”

Eberhard Meller, the president of the Federation of German Electricity Companies, which represents companies like RWE, said, “Good sense triumphed in the end.” For his part, Mr. Clement eventually joined the supervisory board of RWE Power, in 2006.

The benefits won by German industry were substantial. Under the plan that the European Union originally approved for Germany, electricity companies were supposed to receive 3 percent fewer permits than they needed to cover their total emissions between 2005 and 2007, which would have forced them to cut emissions.

Instead, the companies got 3 percent more than needed, according to the German Emissions Trading Authority, the regulatory agency, a windfall worth about $374 billion at the peak of the market. German lawmakers also approved exemptions and bonuses that could be combined in dozens of ways and allowed companies to gain additional permits.

“It was lobbying by industry, including the electricity companies, that was to blame for all these exceptional rules,” said Hans Jürgen Nantke, the director of the German trading authority, part of the Federal Environment Agency.

Higher Bills Draw Inquiry

After the system kicked off, in 2005, power consumers in Germany started to see their electrical bills increase by 5 percent a year. RWE, the power company, received 30 percent of all the permits given out, more than any other company in Germany.

The company said its price increases from 2005 to 2007 predominantly reflected higher costs of coal and natural gas. But the company acknowledged charging its customers for the emission permits, saying that while it may have received them free from the government, they still had value in the marketplace.

The German antitrust authority later investigated. In a confidential document sent to RWE lawyers in December 2006, that agency accused RWE of “abusive pricing,” piling on costs for industrial clients that were “completely out of proportion” to the company’s economic burden, according to the document, which was obtained by The New York Times.

Without admitting wrongdoing, RWE last year agreed to a settlement that should provide lower electricity rates to industrial customers in Germany from 2009 through 2012.

Meanwhile emissions have risen at RWE’s German operations since the trading system began. The company emitted nearly 158 million tons of carbon dioxide in 2007, compared with 120 million tons in 2005, according to its annual reports.

The company said its emissions rose in part because one of its nuclear power stations, which emit no carbon dioxide, was off line for a while.

Jürgen Frech, the chief spokesman for RWE, said that charging customers for the carbon permits was “beyond reproach,” and added that the company will spend more than $1 billion this year to comply with the emissions trading system. RWE also said it is investing $41 billion over the next five years in projects including renewable energy and developing cleaner ways to generate electricity from coal mined in Germany.

For all the problems with the European system, some experts say it is simply too early to judge whether it will succeed. As the region that went first with mandatory carbon trading, Europe was bound to make some initial mistakes, they said.

http://www.independent.co.uk/environment/climate-change/climate-change-a-battle-for-the-planet-1059458.html

Summing up what many scientists, environmentalists and politicians now think about the threat of climate change is simple: the world is drinking in the last chance saloon.

Time is still available to tackle the warming of the atmosphere, which every government (including that of George Bush) today accepts is real, and being caused by human actions. But the window of opportunity is rapidly closing, and the last chance for the world to act in concert to bring the process under control is clearly visible: it is the UN Climate Conference in Copenhagen scheduled for December 2009.

The international community will meet to try to agree a new global deal to cut rising emissions of greenhouse gases – the waste gases from industry and transport, principally carbon dioxide, which are retaining the sun’s heat in the atmosphere and causing temperatures to rise.

But, if such a deal is not achieved in Denmark, many observers feel it will be too late subsequently to stop climate change causing devastating problems for the world in general and human society in particular, from the widespread failure of agriculture to the swamping of low-lying countries by sea-level rise.

This week, in the Polish industrial city of Poznan, a dress rehearsal for Copenhagen is taking place. Diplomats and officials from every member state of the United Nations have come together to shape the outline of next December’s agreement – or at least, to try. For it would be difficult enough to get 150-plus delegations, each with its own domestic pressures and national interests, to agree on the colour of an orange, never mind what, if it is successfully negotiated, will probably be the most complex treaty the world has seen.

Who is to do what? That’s the simple, but fantastically difficult question at the heart of everything. Most of the excess CO2 (above normal historical levels) currently in the atmosphere was put there by the rich developed countries such as the US, Britain, Germany and Japan, in the two centuries since industrialisation began, and particularly in the years since the end of the Second World War when economic growth shot forward so dramatically. But developing countries such as China, India, Indonesia and Brazil are rapidly catching up, and it is probable that China, for example, with its exploding economy growing at 10 per cent a year, has overtaken the US to become the largest CO2 emitter in the world.

So who is more to blame? How are we to balance what is known in the jargon as the burden-sharing? How are we to divide up the pain? (For cutting carbon emissions out of your economy is costly and may restrict your economic growth.) Can China cut less CO2 than the US, even if it is emitting more? Will the US even be willing to make cuts under those circumstances?

The first world climate treaty, the Kyoto protocol, signed in 1997, recognised that nations had “common but differentiated” responsibilities and so it committed the industrialised countries, including Britain and the rest of the European Union, the US and Japan, to making fairly modest reductions in their CO2 by 2010, while the developing countries, led by China, began to monitor their emissions, but were not obliged to cut them. But Kyoto ran aground. Never mind that few nations (Britain being a rare exception) will meet their modest Kyoto targets. George Bush withdrew the US in 2001 and robbed it of its significance; without the world’s biggest polluter involved, Kyoto ceased to mean anything.

What is to be negotiated at Copenhagen is a successor treaty to Kyoto, and it is clear what that must involve, if it is to succeed. Firstly, all the major industrialised countries, including America, must agree a programme of deep cuts in their emissions. They have to lead the way.

Secondly, the developing countries, led by China, have to do something in terms of reducing their emissions; they cannot simply continue with business as usual.

Thirdly, there will have to be new flows of funds from the rich nations to the developing countries, to help them take action, both to cut their emissions, and to protect themselves againstthe effects of climate change which will be unavoidable, such as sea-level rise.

And fourthly, there may have to be a special agreement to protect the world’s forests, which lock up a vast amount of the Earth’s carbon.

If such a deal is eventually done, it will be close to the wire; it will be behind closed doors in Denmark, brokered at the last minute between pragmatic and powerful people. The original Kyoto agreement was reached in this way, in the early hours of the morning. An important player was Al Gore, who was then the US Vice-President (and who has since gone on to become, with his film An Inconvenient Truth, the world’s single most influential voice on climate change). Another was Britain’s John Prescott, who then combined the jobs of Deputy Prime Minister and Environment Secretary – Kyoto was probably his finest hour. Perhaps the key player was the Argentine Raul Estrada, chairman of the central negotiating committee, who rescued the talks when they seemed on the brink of collapse.

Such figures will be necessary in Copenhagen. One of them will almost certainly have to be Chinese. But, towering above them all is one new figure: Barack Obama. The President-elect has already made it clear he sees tackling global warming as a priority, and he will reverse George Bush’s obstructionism and fully re-engage with the talks. The election of Mr Obama was like an electric shock: it changed the dynamic and meant a deal was possible; if the US were to take a leading role, it would mean it was very possible. Britain’s new Energy and Climate Change Secretary, Ed Miliband, who is taking part in the Poznan talks this week, wants a leading role for Britain, although the UK position, of course, is part of the position of the EU.

Therein lies a difficulty, as this week the EU is trying to finalise its own energy and climate package – with some difficulty. This aims ambitiously at member states providing 20 per cent of their energy requirements from renewable sources by 2020, and cutting 20 per cent of EU carbon emissions by the same date, if no global climate deal is achieved at Copenhagen – and 30 per cent if a global deal is achieved. Some member countries, principally Poland, Italy and the Czech Republic, are unhappy with this, and it is possible that European heads of government (including Gordon Brown), who will try to complete the deal tomorrow and on Friday, may have to secure their adhesion by watering it down.

Only companies in developed countries have UN-regulated limits for CO2 and other greenhouse gases, enforceable under the existing Kyoto global-warming treaty through 2012. Polluters may trim output domestically or, if it’s cheaper, do so in poorer countries using the UN’s Clean Development Mechanism, or CDM, a process for carrying out the offsets.

 http://www.bloomberg.com/apps/news?pid=20601085&sid=aWA35qYV_yqw&refer=europe

Negotiators at United Nations climate- change talks in Poland may broaden emissions rules to spur use of devices that capture carbon dioxide from power plants in developing countries and pump it into underground storage sites.

Two options being discussed would add the experimental technology to a list of UN-approved methods to limit the release of heat-trapping greenhouse gases, according to a document handed to delegates today at the meetings in Poznan, Poland.

The proposals would let industrialized nations or companies get credit for reducing their emissions if they pay for carbon- capture plants in developing nations, the document said. UN rules already allow pollution-offset investments in projects such as trapping methane gas from landfills or building wind-energy turbines in developing nations.

Delegates from about 190 nations are meeting in Poland through Dec. 12 to begin drawing up a new treaty to stem global warming for approval next December in Copenhagen. If agreed, a carbon-capture plan could take effect even before the new treaty is in place.

The International Energy Agency today called for 20 carbon- capture projects to be built. The technology to store industrial CO2 underground for eons is vital to the UN’s plan to halve worldwide emissions of global warming gases by 2050, the IEA said previously. The devices are designed to primarily remove almost all CO2 emissions from burning coal, the most polluting fossil fuel.

Only companies in developed countries have UN-regulated limits for CO2 and other greenhouse gases, enforceable under the existing Kyoto global-warming treaty through 2012. Polluters may trim output domestically or, if it’s cheaper, do so in poorer countries using the UN’s Clean Development Mechanism, or CDM, a process for carrying out the offsets.

Test First

The European Union said a test project should be conducted before such projects are approved.

“We think that we should do a pilot phase testing CCS in the CDM and then have a good evaluation of that pilot phase and then make a decision over whether to have it in CDM or not,” Artur Runge-Metzger, head of the European Commission’s climate and energy unit, told reporters today in Poznan. “You will find that reflected in the negotiation text.”

Negotiators in Poland this week are considering four options for carbon capture, sometimes called “clean coal,” according to the document. One would allow unlimited use of the technology. Another would hold to eight the number of carbon-capture projects approved under CDM by 2012. Two other options would disqualify the technology from CDM while researching its use further.

Using carbon capture in developing countries would only serve to export to poorer nations the risk of seepage of the carbon dioxide from underground chambers, Damien Demailly, climate campaigner for the environmental group WWF International, told reporters. He and Wael Hmaidan of the Arab Climate Alliance said CCS shouldn’t be allowed in the CDM.

“CDM is assistance from developed to developing countries for proven technologies,” Hmaidan said today in Poznan.“CCS is unproven. It’s a big risk to do testing for this technology” in developing nations

The General Accounting Office, the investigative arm of Congress, published a report Tuesday analyzing the UN’s Clean Development Mechanisms, arrangements under the Kyoto Protocol that allow rich countries to meet their commitments to cut greenhouse gases by investing in projects – such as a wind farm or a reforestation program – that reduce emissions in poorer countries.

The GAO found that the cap-and-trade scheme successfully created a working carbon market, “but its effects on emissions, the European economy, and technology investment are less certain.” The report noted that the use of carbon offsets can “undermine the system’s integrity” because there is no way to ensure that the projects invested in would not have been built anyway, or that they will last long enough to reduce the amount of emissions that they are expected to reduce. Carbon offsets, the report concluded “involve fundamental tradeoffs and may not be a reliable long-term approach to climate change mitigation.”

Yvo de Boer, executive secretary of the UN Framework Convention on Climate Change, said that, while the program can certainly be improved, the fundamentals of the system were sound. Mr. de Boer, who is attending the UN climate summit in Poznań, Poland,

“It’s not as though we’re printing money in the garage,” de Boer told Reuters, adding that there are mechanisms in place to verify the emissions cuts. “There is room for improvement and there are projects that perhaps make it through that shouldn’t have…we are in a learning experience.”

A complex system

The GAO is not alone in saying that cap-and-trade systems are an invitation to abuse. The Times, a British daily, ran a story this week describing the system as “the greatest and most complex commodity trading market the world has ever seen.” It quotes leading US climate scientist James Hansen, who calls the approach “terrible”:

“Carbon trading does not solve the emission problem at all,” he says. “In fact it gives industries a way to avoid reducing their emissions. The rules are too complex and it creates an entirely new class of lobbyists and fat cats.”

An alternative?

Instead of of a cap-and-trade system, Mr. Hansen endorses a straightforward carbon tax. In a letter to president-elect Barack Obama [PDF] last month, the NASA climatologist proposed taxing fossil fuels at the mine, derrick, or port of entry, and turning all of the revenues over to the public:

The entire tax should be returned to the public, equal shares on a per capita basis (half shares for children up to a maximum of two child-shares per family), deposited monthly in bank accounts. No bureaucracy is needed.

A tax should be called a tax. The public can understand this and will accept a tax if it is clearly explained and if 100 percent of the money is returned to the public. Not one dime should go to Washington for politicians to pick winners. No lobbyists need be employed.

The public will take steps to reduce their emissions because they will continually be reminded of the matter by the monthly dividend and by rising fossil fuel costs. It must be clearly explained to the public that the tax rate will continue to increase in the future.

A carbon tax has attracted other endorsements. The consumer advocate and electoral gadfly Ralph Nader and the Canadian journailst Toby Heaps called for a global carbon tax in an op-ed in Wednesday’s Wall Street Journal. And in a speech this July, Al Gore said that he has long supported a sharp reduction in payroll taxes with the difference made up for in carbon taxes. “We should tax what we burn,” he said, “not what we earn.”

Despite these endorsements a carbon tax seems unlikely in today’s political climate. Mr. Obama has long endorsed cap-and-trade as a way of achieving an 80 percent reduction in US greenhouse emissions by 2050, and he has shown no signs of changing his mind.