Climate change: and carbon pricing >>> emissions trading isn't working

To what extent is the business world taking climate change seriously?
Futures Forum: Climate change: Paris 2015: Climate Finance Day

One approach has been 'carbon pricing':
Pricing Carbon - World Bank
Carbon price - Wikipedia, the free encyclopedia
Decarbonising development: Thinking beyond a global carbon price | The Economist

which had led to a market and so the phenomenon of 'emissions trading':
The EU Emissions Trading System (EU ETS) - European Commission
Emissions trading - Wikipedia, the free encyclopedia

However, it has been wracked with controversy since its inception:
Futures Forum: Climate change: the great carbon offsetting scam
Futures Forum: Climate change: the absurdities of carbon offsetting  >>> or, producing pollution in order to sell it >>> or, creating national parks by evicting indigenous tribes

It depends what you mean by 'carbon pricing':

How to curb emissions: Put a price on carbon

Experts suggest opening up access to power grid, ending fossil-fuel subsidies to make wind and solar power cheaper

Date: September 3, 2015

Source: Princeton University, Woodrow Wilson School of Public and International Affairs

Summary:

Literally putting a price on carbon pollution and other greenhouse gasses is the best approach for nurturing the rapid growth of renewable energy and reducing emissions. While prospects for a comprehensive carbon price are dim, especially in the US, many other policy approaches can spur the renewables revolution, according to a new policy article.

How to curb emissions: Put a price on carbon: Experts suggest opening up access to power grid, ending fossil-fuel subsidies to make wind and solar power cheaper -- ScienceDaily

It's not just the Guardian which is proposing to 'keep it in the ground':
Futures Forum: Climate change: keep it in the ground
Futures Forum: Climate change: 'stranded assets' and 'unburnable oil' ...... or the pressures to leave oil and gas in the ground

The compelling case for global carbon pricing

To wean the world off use of fossil fuels they must become less cheap

June 1, 2015 6:44 pm

Carbon must have a higher price tag if the risk of catastrophic global warming is to be contained. On this question environmentalists and economists agree — joined, perhaps, by an increasing number of industrialists. On Monday, in letters to the Financial Times and the UN Framework Convention on Climate Change, six major oil and gas companies argued for the global adoption of carbon pricing. This is vital to discourage use of carbon-based energy and “to help stimulate investments in the right low carbon technologies and the right resources at the right pace”...

Scientists have determined beyond reasonable doubt that there remains too much carboniferous fuel in the earth’s crust to be safely extracted and burnt. The best way to keep it underground is through a rigorously enforced carbon price. But that alone is unlikely to prove sufficient.

The compelling case for global carbon pricing - FT.com

Or you could just tax it:
Futures Forum: Climate change: carbon tax >>> "the polluter pays"
Carbon tax or cap-and-trade? | Climate solutions | Climate change | Science & policy | Climate solutions | Issues

Now, serious doubts have been cast about the current system:


Carbon credits undercut climate change actions says report

By Matt McGrath Environment correspondent, BBC News

25 August 2015

From the section Science & Environment

Image copyrightSPLImage caption

Curbing fires in coal waste is one way of generating carbon credits

The vast majority of carbon credits generated by Russia and Ukraine did not represent cuts in emissions, according to a new study. The authors say that offsets created under a UN scheme "significantly undermined" efforts to tackle climate change.

The credits may have increased emissions by 600 million tonnes. In some projects, chemicals known to warm the climate were created and then destroyed to claim cash.

As a result of political horse trading at UN negotiations on climate change, countries like Russia and the Ukraine were allowed to create carbon credits from activities like curbing coal waste fires, or restricting gas emissions from petroleum production. Under the UN scheme, called Joint Implementation, they then were able to sell those credits to the European Union's carbon market. Companies bought the offsets rather than making their own more expensive, emissions cuts.

But this study, from the Stockholm Environment Institute, says the vast majority of Russian and Ukrainian credits were in fact, "hot air" - no actual emissions were reduced. They looked at a random sample of 60 projects and found that 73% of the offsets generated didn't meet the key criteria of "additionality". This means that these projects would have happened anyway without any carbon credit finance.

"Some early projects were of good quality, but in 2011-2012, numerous projects were registered in Ukraine and Russia which had started long before and were clearly not motivated by carbon credits," said Vladyslav Zhezherin, a co-author of the study. "This was like printing money."

According to the review, the vast majority of the offset credits went into the European Union's flagship Emissions Trading Scheme. The authors estimate these may have undermined EU emissions reduction targets by 400 million tonnes of CO2, worth over $2bn at current market prices.

I

Image copyrightSPLImage caption

Reducing emissions from the oil and gas industry is another way of earning credits

Unlike the Russian and Ukrainian projects, similar offsetting plans in Poland and Germany were said to meet very strict criteria.

"We were surprised ourselves by the extent, we didn't expect such a large number," co-author Anja Kollmuss told BBC News. "What went on was that these countries could approve these projects by themselves there was no international oversight, in particular Russia and the Ukraine didn't have any incentive to guarantee the quality of these credits."

Because Germany and Poland had tougher emissions targets to meet, they were very careful with their certificates. This wasn't the case in Russia and the Ukraine.

One part of the larger review has been published in the journal Nature Climate Change. It concerns the activities of projects that made money from the removal of chemicals HFC-23 and sulphur hexafluoride, which add significantly to global warming. They found that, in 2011, all three projects in the study significantly and simultaneously ramped up the amount of the chemicals they were destroying.

"As researchers we can not prove the fraud, we can just point to the facts so in the HFC case at the moment when they could gain credits they immediately increased production of this greenhouse gas in order to destroy them, and that lead to them getting many more credits than if they had produced it like they did before," said Anja Kollmuss.

Experts familiar with the Russian carbon projects said that there had been longstanding and well acknowledged issues with the destruction of chemicals for carbon credits. This had been seen in China for several years.

Michael Yulkin, from Russia's Environmental Investment Centre rejected the idea that many of these Eastern projects broke the rules. "That's just not true," he told BBC News. "All the projects have been validated and the additionality has been proved - it was all following the rules and if the rules allowed them to be in, so you have them in." Mr Yulkin pointed out that the projects were no longer an issue. The EU emissions trading scheme no longer accepted the credits - and Russia was not taking part in the next commitment period of the Kyoto Protocol.

The authors of the study argue that lessons must be learned for any future market mechanisms that are incorporated into a new global agreement on climate change, expected to be signed later this year at a conference in Paris. "In future, we need to do better and we can do better, but the devil will be in the detail and tighter controls will be needed," said James Wilde from the Carbon Trust. "If firms are to invest at scale driven by a price for carbon, they need to know that the schemes setting this price in future will be robust and survive for the lifetime of investments."

Carbon credits undercut climate change actions says report - BBC News

This report forms the basis of the latest fortnightly report from the New Economics Foundation:

Energy round-up:  carbon markets have failed Photo credit:   freefoto SEPTEMBER 3, 2015 // BY: STEPHEN DEVLIN In theory, the world has the solution to soaring emissions – it’s called carbon pricing. Carbon pricing is an attempt to reduce carbon dioxide emissions by charging polluters to cover their external costs. Most economists and policy-makers argue the only efficient way to do this is through establishing a market for carbon. This is done through an emissions trading scheme (ETS): a fixed number of emissions permits are issued and a cap is set on the total emissions allowed. Those who then pollute more – oil and gas firms and others who find it harder to make cuts, for example – can cover their higher emissions by buying more permits from those who make reductions easier. But it’s also possible to cover emissions by purchasing offsets from foreign ETS. In fact, a new report released by the New Zealand government reveals that almost all of their emission reduction obligations for 2014 were met by paying for offsets in transition countries such as Russia and Ukraine, cheaper options because emissions cuts are easier to make there. The problem is that many analysts believe these foreign emissions reductions would have happened anyway. Cutting waste from coal or pipeline leakages, for example, is win-win for industry as it also keeps their costs down. As a result, the impact of New Zealand’s ETS is close to zero. This also applies to the EU ETS, in which about a third of total emissions reductions come from international offsets. Not only has this overestimated emissions reductions, it may have also contributed to the collapse of carbon prices. In both New Zealand and EU, markets remain far below the estimated cost of carbon. The actual social cost of carbon emissions is far higher than emissions permit prices imply. This also undermines long-term incentives to innovate as it’s much cheaper to just pay for your pollution. But reforming emissions trading schemes has been a headache so far. Companies benefit from low prices as offsets depress the market and windfall profits – as permits are issued for free – and those unused can be sold on. Chances are they are not looking to give up paying far below the actual cost of pollution and making a profit from selling excess permits, too. At least in other carbon markets this problem is tackled by auctioning permits. Financial incentives are a powerful force, but for carbon pricing the market design is flawed. Don't miss these: How polluters cause more damage than they pay for:  Scrap that: The UK government made a surprise announcement to cut subsidies for solar by 90%. Sign this petition to voice your opposition. VIDEO! NASA scientist explains why and where sea levels are rising because of climate change. In other news… UK renewable gloom Energy Secretary Amber Rudd followed up new restrictions to onshore wind development with huge cuts in subsidies to small-scale solar. DECC also announced a new project to examine the “true costs” of electricity generation, in particular the cost of connection to the grid. Some commentators suspect such a study would pave the way for future attacks on renewables policy. Solar While under threat from subsidy cuts in the UK, solar is still projected to grow strongly worldwide, to about 652 GW by 2025 as a new report by GlobalData shows. Yet growth may plateau soon after as governments around the world continue withdrawing support for the technology. In fact, most of 2014’s growth can be attributed to China and Japan alone. The intermittency issue I With renewables playing an increasing role in German energy, new data suggests that Germany’s power system was more reliable than ever in 2014 - despite persistent claims that intermittent renewables will threaten the stability of our power system. The intermittency issue II Panasonic is launching its suite of home batteries in Germany, which is also key market for Tesla as homeowners receive greater incentives to install solar panels on their rooftops. Batteries store power during peak production which can then be dispensed later, useful for bridging the intermittency of renewables. In Japan, Panasonic’s batteries already let households replace as much as 70 percent of energy usage by storing solar-generated power. Netherlands appeal After a landmark judgement in June forcing the Dutch government to make steeper emission cuts to combat climate change, the environment minister has now announced that the ruling will be contested. The minister argues the court’s verdict could set a precedent for other similar cases. COP21 Much of the analysis around COP21 in Paris later this year is still focused on the size of different country’s pledges, but others have been considering how to draft an agreement that keeps up the pressure in later years. LSE’s Grantham Institute suggests that success will depend on whether the deal presses countries to scale up their ambition every five years as new technologies emerge.

Energy round-up: carbon markets have failed | New Economics Foundation
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