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]

On the road to Copenhagen, hope springs eternal

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Jun 262009

cop15_logo_imgHalf a year before the U.N. climate conference in Copenhagen, negotiators are far from agreeing on key components of a global climate deal. As envisioned in the 2007 Bali Climate Action Plan (or “Bali Roadmap”), the summit in December is supposed to deliver a follow-up agreement to the Kyoto Protocol under the United Nations Framework Convention on Climate Change (UNFCCC), which expires at the end of 2012.

Ever since Bali, however, progress in the negotiations has been slow. Only recently have the delegations entered full negotiation mode—which is necessary right now, the most pivotal year since the 1992 UNFCCC. From June 1 to 12, more than 4,600 participants—including government delegates from 183 countries as well as business, industry, environmental organizations and research institutions—met in Bonn, Germany, to discuss key negotiating texts that will serve as the basis for an agreed Copenhagen outcome. The gathering in Germany was the second in a series of five major U.N. negotiating sessions this year leading up to the Copenhagen summit in December (…).

Please find the full article in Grist Magazine here.

The USA on its way to Copenhagen – Perspectives for international climate policy

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Jun 222009

More than 80 participants followed the invitation of the NABU and the Heinrich Böll Foundation on 15 June 2009 in Berlin to discuss with American and German experts key contributions on both sides of the Atlantic to tackle the global climate crisis. Another key point of interest was an assessment of the current state of negotiations of a new global climate pact on which the international community wants to agree at the UN climate conference in the end of this year in Copenhagen.

In the discussion, I emphasized the central Importance of new U.S. energy and climate legislation, the so-called Waxman-Markey Bill, which has already passed important hurdles in the House of Representatives and will be discussed in the Senate later this year – hopefully to be be adopted. Since 1990, U.S. greenhouse gas emissions have risen by about 16 percent. For the US to reduce its emissions by 20 percent compared to 2005 in 2020, as W-M envisions, will be a very remarkable challenge and an effort compatible to the cuurent evrsion of the EU climate and energy package. Critics often suggest that the absolute reductions in WM amount to only 4% compared to 1990. I pointed out, however, that these 4% only include the emission reductions in the  sectors covered by a future emissions trading scheme. Some estimates believe that the entire reduction effort in the US (including non-ETS-covered sectors and offsets) could amount to about -17% in 2020 compared to 1990. Accordingly, the U.S. would reduce its emissions by more than one third compared to total emissions expected in a business as-usual-scenario. Europe aims at reducing emissions by 20% compared to 1990 and has offered a -30% target if other parties commit to a similar level of ambition.

I also pointed to the fact that the American climate debate much more than the one in Europe is fixated on China, because of competitiveness concerns for the U.S. economy. In many cases, these concerns are distorting important facts and are therefore exaggerated. Only recently it has been noted that China already has very ambitious policies inplace to increase energy efficiency and the expansion of renewable energies despite no binding reduction targets under the Kyoto Protocol. I also discussed sectoral approaches as a way to provide additional incentives to abate emissions in energy-intensive industries. Panel guests: Prof. Dr. Miranda Schreurs, Research Center for Comparative Environmental Policy, Free University Berlin; Alexander Ochs, director of international climate policy, Center for Clean Air Policy, Washington DC; Dr. Karsten Sach, Deputy Director General for International Cooperation, Federal Ministry of Environment; Duncan Marsh, director of international climate policy, The Nature Conservancy; Carsten Wachholz, secretary for energy policy and climate protection, NABU.

You can find a German summary of the event here.

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.”

International Climate Negotiations: The Road to Copenhagen and beyond

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Apr 052009

On April 3, 2009 I joined Nigel Purvis, the former U.S. deputy assistant secretary of state for oceans, environment and science and current President of Climate Advisers, at and American Law Institute and American Bar Association conference on “Climate and the Law” in Washington DC . In my presentation on “International Climate Negotiations: The Road to Copenhagen and beyond”, I outlined key elements of a global climate deal and a roadmap for what results have to be reached by the UN conference in Copenhagen in December, and what details of the global climate deal could be negotiated in 2010 and 2011.

In particular, I discussed potential avenues for solution regarding four most contentious issues: Contractual matters (most importantly, the question of whether agreement should take the form of a new protocol or an amendment to the Framework Convention), criteria and outlook for reaching comparable action amongst industrialized countries, the ambition of developing countries’ NAMAs versus the level of funding from industrialized countries, as well as the subject of the future financing architecture and governance.

[Please check back; presentation will be online soon]

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

Mexico to Propose Emissions Trading for Oil, Power, Center Says

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Mar 302009

By Mathew Carr, March 19 2009 (Bloomberg) — Mexico will likely propose emissions-trading programs for its oil and electricity industries when it completes a climate-protection plan next month, the Washington-based Center for Clean Air Policy said.

Emissions trading may start in Mexico in 2011 and expand to cement and metals, Alexander Ochs, director of international policy at the center, said yesterday on the sidelines of the Carbon Market Insights conference in Copenhagen.

“They have committed political leadership that understands emerging countries have to make a contribution to a global climate pact,” Ochs said. “They want to demonstrate they are progressive.” The center, an emissions-trading think tank, is advising Mexico and China in their climate plans, he said.  Full article: Bloomberg_Mex

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

GHG Mitigation Opportunities in Brazil and Mexico, NAMAs and the Global Deal on Climate Change

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Mar 242009
GHG Mitigation Opportunities in Brazil and Mexico
ECLAC, Santiago, Chile
March 25, 2009

Presentation given at ECLAC, Santiago, Chile on March 25, 2009


– Center for Clean Air Policy (CCAP)
– Assisting Developing Country Climate Negotiators through Analysis & Dialogue
– Workshop overview: GHG Mitigation Opportunities in Brazil and Mexico

– Overarching goals and status quo
– Emissions
– Overview of International Climate Negotiations
– Developing countries are already doing more than many believe
– International Policy Context
– NAMA Requirements
– How financing could work
– Technology Finance
– Technology Finance Assistance to Encourage Stronger Actions
– Sources for Technology Finance
– China
– Mexico
– South Africa & South Korea
– Chile
– Brazil
– Sectoral Approach
– NAMAs and Sectoral
– Conclusions

[Please find presentation here on ECLAC website]