Will China Steal the U.S. Thunder by Launching Cap-and-Trade in the Next Five Years?

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Aug 102010

By Haibing Ma and Alexander Ochs

Recently, a China Daily news report caught Uncle Sam’s attention, presumably at an inconvenient time: just when the U.S. Senate finally admitted to abandoning its plan of issuing a federal climate bill by the end of this year, top Chinese officials were discussing how to launch carbon trading programs under their country’s next Five-Year Plan (2011–15). Serving as China’s overarching social and economic guidance, Five-Year Plans consistently lay out the most crucial development strategies for this giant emerging economy. Once included in the plan, carbon trading will be viewed as part of China’s national goals and will be domestically binding. This occurred most recently with the country’s 2010 energy intensity target, which called for a 20 percent reduction from 2005 levels and was disaggregated into provincial and local targets, with local officials held accountable for achieving them. In short, China seems to be accelerating full-throttle toward a low-carbon economy.

Chinese policymakers have been eyeing a domestic emission-trading scheme for a while. Last August, Xie Zhenhua, Deputy Director of the National Development and Reform Commission (NDRC), announced that China will launch a pilot carbon trading program in selected regions and/or sectors—basically the same message conveyed in the recent China Daily story. On one hand, this reiteration demonstrates that the Chinese government is seriously considering such a market-based mitigation mechanism; on the other hand, the fact that the program’s status is still in discussion a year later shows that putting cap-and-trade into action might be not be that easy in China either. [Read more on Worldwatch’s ReVolt blog]

NABUtalk: Die USA auf dem Weg nach Kopenhagen? Perspektiven für die internationale Klimapolitik

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Jun 222009

Über 80 Teilnehmende folgten der Einladung des NABU und der Heinrich Böll Stiftung, um mit amerikanischen und deutschen Experten zentrale Beiträge dies- und jenseits des Atlantiks zur Bewältigung der globalen Klimakrise zu diskutieren. Im Mittelpunkt des Interesses standen dabei aktuelle Einschätzungen zum Stand der Verhandlungen über ein neues Weltklimaabkommen, über das sich die internationale Staatengemeinschaft bis Ende dieses Jahres in Kopenhagen verständigen will.

Alexander Ochs, Leiter der Abteilung für Internationale Klimapolitik beim amerikanischen Center for Clean Air Policy in Washington, betonte die zentrale Bedeutung der neuen Energie- und Klimagesetzgebung, der so genannten Waxman-Markey Bill, die zur Zeit im Kongress und im Herbst im Senat debattiert und hoffentlich auch so verabschiedet werde. Seit 1990 seien die Treibhausgas-Emissionen in den USA um etwa 16 Prozent angestiegen. Wenn diese nun im Zeitraum von nur 8 Jahren (2012-2020) um 20 Prozent reduziert werden sollen, sei das eine sehr bemerkenswerte Herausforderung und durchaus mit dem von der EU beschlossenen Klimapaket vergleichbar, auch wenn dabei die absolute Senkung des Ausstoßes gegenüber 1990 nur 4 Prozent betrage. Daneben sei die amerikanische Klimadebatte bisher (zu) sehr auf China fixiert, weil Nachteile für die US-Wirtschaft im internationalen Wettbewerb befürchtet werden. Hier müsse viel stärker anerkannt werden, dass China bereits ohne Verpflichtungen unter dem Kyoto-Protokoll eine sehr ehrgeizige Politik zur Steigerung der Energieeffizienz und dem Ausbau der Erneuerbaren Energien umsetzt. Sein Institut unterstütze darüber hinaus die Entwicklung von sektoralen Ansätzen, um zusätzliche Anreize zur Emissionsminderung in den energieintensiven Industrien zu geben.

Podiumsgäste waren:

  • Prof. Dr. Miranda Schreurs von der Forschungsstelle für vergleichende Umweltpolitik an der Freien Universität Berlin
  • Alexander Ochs, Leiter der Abteilung für Internationale Klimapolitik beim amerikanischen Center for Clean Air Policy in Washington
  • Dr. Karsten Sach, Unterabteilungsleiter für Internationale Zusammenarbeit im Bundesumweltministerium
  • Duncan Marsh, Direktor für Internationale Klimapolitik bei einer der weltgrößten Naturschutzorganisationen, der amerikanischen „The Nature Conservancy“
  • Carsten Wachholz, Referent für Energiepolitik und Klimaschutz beim NABU-Bundesverband

Eine deutsche Zusammenfassung findet sich hier und hier.

The future of the CDM

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Jun 112009

On 8 June 2009 at the UNFCCC negotiations in Bonn, my friend Heleen de Connick asked me to jump in for another colleague as respondent on an ECN panel  on “Confluence or convolution of mechanisms, technology and finance: how can streams meet in Copenhagen?”. In my response to Stefan Bakker’s presentation on “The Future CDM”, I pointed out, among other things, that:

– CDM projects in developing countries and Annex I action alone will not be enough to halve global emissions by 2050 and reach a global peak of emissions before 2020 – both important thresholds to keep a worldwide temperature increase below 2 degrees Celsius, as science suggests
– sectoral approaches in rapidly developing countries are an innovative step forward fitting into the concept of low-carbon development strategies including three types of Nationally Appropriate Mitigation Actions (NAMAs): unilateral action, conditional action and participation in the carbon market (crediting)
– CDMs should not be abandonned but continue to play a role in sectors not covered by sectoral approaches and in least developing countries
– the CDM can be improved; one particularly valuable suggestion is to go from project-based approval to a positive list of actions (or programmatic CDM) in order to speed up the process and make it more transparent

You can find an On-Demand webcast of the side event here

Linking EU and US emission trading systems

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May 032009

On April 24, 2009 at Hotel Jalta in Prague, Czech Republic, I joined a panel of prominent speakers including Henry Derwent (IETA), Nasrine Amzour (UK DEFRA), and Norio Suzuki (Mitsubishi) to talk about “Climate change: Implementing a coordinated response in Central Europe and around the globe.” In my presentation, I discussed the potential, outlook and obstacles of linking the EU Emissions Trading Scheme with other emissions trading systems, not only under the Kyoto Protocol but also with regards to new, quickly emerging markets including Australia and Japan.

Paying special attention to recent legislative developments in the United States, I shed light on the differences between EU and US approaches to allocating allowances, domestic and international offsets, as well as provisions for credits from Reduced Deforestation (RED). “In both the EU and the US, we tend to forget that employing a specific approach to these key issues today does not only have immediate consequences there – but it will enhance or reduce our ability to harmonize and ultimately link both systems.”

CCAP Discusses Views of Carbon Offsetting in the U.S. at Copenhagen Carbon Markets Insights Conference

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Apr 022009

from CCAP Newsletter 

On March 18, 2009, Alexander Ochs, CCAP’s director of international policy, discussed “Views on Carbon Offsetting in the United States” at Point Carbon’s Carbon Market Insights Conference in Copenhagen, Denmark.“International offsets like the Clean Development Mechanism (CDM) and domestic offsets will likely play an important role in any future U.S. cap and trade program,” Ochs told delegates from around the world. “However, it is important to understand that offsets are only one mechanism that U.S. lawmakers are currently considering in their effort to contain the cost of a federal carbon market. There is also a certain contradiction in the debate between lowering the cost of mitigating emissions on the one hand, and not wanting to send money oversees to make our competitors’ economies more efficient.”Ochs agreed with co-panelist Peter Zapfel from the European Commission that the CDM alone is not sufficient for reducing rapidly growing greenhouse gas emissions in the developing world. “Major emitters like the developing countries China and Mexico must contribute more to the solution than simply offsetting reduction commitments made elsewhere — and they are willing to do so,” Ochs said. “Sectoral commitments for energy-intense industries are the next important step on the staircase to a full integration of these countries into the global carbon market.”

You can find my presentation here: ochs-futureofoffsetsinus_carbonmarketinsights2009.pdf

Key Findings from our Developing Country Project presented at Latin American Regional Workshop

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Mar 292009

On March 25, at a workshop in Santiago, Chile, I presented our research teams’ results on Mexico and Brazil as part of CCAP’s Developing Country Project. We held the workshop at the headquarters of the Economic Commission for Latin America and the Caribbean (also a co-host of the event). Officials from seven South American nations attended the workshop, gathering to discuss the status of the international climate change negotiations and to hear about the climate-related research CCAP teams in Mexico and Brazil had conducted. The topics of discussion included:

• Nationally appropriate mitigation actions, a key feature of the Bali Roadmap;
• Analysis of GHG mitigation options in Brazil’s forestry sector;
• The GHG and other implications of expanding the production of biofuels, both ethanol and biodiesel, in Brazil; and
• Lessons learned from a first attempt to propose sectoral goals for GHG emissions in Mexico’s cement and oil refining industries.
The participants expressed a strong interest in seeing this work continue and for the project to expand into other countries, such as Chile and Argentina. The CCAP Developing Country Project is funded by the UK Department for Foreign Investment and Development (UK DFID), the William and Flora Hewlett Foundation and the Tinker Foundation.

Please find my introduction here: ochs-chiledfidworkshopintro_090325.pdf
and my presentation on NAMAs and the Global Deal on Climate Change here: ochs-chilenamatheglobaldealoncc_090525.pdf