Sunday, November 19, 2017

GWPF Newsletter: German Jamaica-Coalition Talks In Near Collapse

Merkel Refuses To Set Coal Deadline At Climate Talks

In this newsletter:

1) German Jamaica-Coalition Talks In Near Collapse
euobserver, 17 November 2017

2) Merkel Refuses To Set Coal Deadline At Climate Talks
Associated Press, 15 November 2017

3) Poland Ready For Showdown With EU Over Climate Change As Trump Sends 74,000 Tonnes Of Coal
Daily Express, 16 November 2017

4) Cop Out: China, Europe Climate Buddy Act Flounders
Politico, 16 November 2017

5) John Constable: Subsidies To Electricity Generation In The United States
GWPF Energy, 15 November 2017

Full details:

1) German Jamaica-Coalition Talks In Near Collapse
euobserver, 17 November 2017

Talks to form a coalition government in Germany were in deadlock on Friday morning (17 November), after negotiators separated early morning without a deal in sight.

A new, last chance meeting was due at midday on Friday.

But wide differences remained on migration, climate and energy and finance policies between the four parties involved in the so-called Jamaica coalition, because their colours echo the Caribbean country's flag: the centre-right CDU and its Bavarian branch CSU, the liberal FDP, and the Greens.

"We need some sleep," said Green leader Simone Peter after the overnight 15-hour discussion.

"Good morning, today it continues," chancellor Angela Merkel simply said.

On Thursday, Merkel had warned that forming a coalition between parties that have never worked together at the federal level was "a very complicated task".

She will not attend the EU social summit in Gothenburg on Friday, in order to salvage the negotiations and avoid a failure that could lead to risky new elections.

The talks started on 20 October, following 
the 24 September elections. The Social Democrats, Merkel's previous coalition partners, decided not to participate to a new government after a resounding defeat. Merkel had set 16 November as a deadline for exploratory talks.

"I don't know if we can resolve all the discrepancies, all the disagreements," CSU's Joachim Herrmann said on Thursday.

Merkel in particular will have to design a compromise on migration between the CSU, the most conservative part of her Christian-Democrat camp, and the Greens.

The Greens reject a yearly 200,000 cap on asylum seekers, which is one of the CSU's main demands. The CSU also demand that a ban on family reunification for refugees, which was introduced in 2016, is not renewed when it is due to end in February next year.

Juergen Trittin, one of the Green negotiators, gave a hint of the tone of the discussions when he posted on Twitter a song by Jamaican singer Jimmy Cliff saying "the harder they come, the harder they fall."

"We cannot accept a solution that will result in an increase in immigration," CSU leader Horst Seehofer said on Friday morning.

He assured that his party would do "whatever is humanly possible to see wether a stable government is possible."

Climate and energy remained another blocking point, with the Greens asking for the closure of the most polluting coal power stations.

Merkel has proposed to reduce the capacity of coal stations, by 7 gigawatts (GW) by 2020, instead of 5 GW as proposed earlier by the CDU/CSU and FDP, but the Greens insist on a 10 GW reduction.

Full story

2) Merkel Refuses To Set Coal Deadline At Climate Talks
Associated Press, 15 November 2017

German Chancellor Angela Merkel, a veteran of global efforts to curb climate change, disappointed environmental campaigners Wednesday by refusing to lay down a deadline for ending her country’s use of coal.

Green groups and developing countries had called on Merkel to use global climate talks in Bonn, Germany, this week to set a date for her country to phase out coal-fired power plants — as she has previously done with nuclear energy.

Merkel, who is sometimes referred to as the “climate chancellor” for her long-standing efforts to combat global warming, acknowledged that Germany’s practice of burning coal to generate electricity is one reason it’s not on track to cut its carbon emissions by 40 percent from 1990 levels by 2020.

“Now, at the end of 2017, we know that we’re still missing a big chunk,” Merkel said.

Speaking to leaders and ministers from around the world, Merkel said there will be “hard discussions” on the issue in her upcoming talks with the Green party and the pro-business Free Democrats on forming a new government.

Germany generates about 40 percent of its electricity from coal, including the light brown variety called lignite that’s considered to be among the most heavily polluting fossil fuels.

“Coal, especially lignite, must contribute a significant part to achieving these goals,” Merkel said. “But what exactly that will be is something we will discuss very precisely in the coming days.”

Speaking immediately after her, French President Emmanuel Macron said his country was committed to ending the use of coal by 2021. The task is made a lot easier for France by the fact that the country hardly has any coal-fired plants and still gets most of its electricity from nuclear power.

3) Poland Ready For Showdown With EU Over Climate Change As Trump Sends 74,000 Tonnes Of Coal
Daily Express, 16 November 2017

Poland is on a collision course with EU chiefs over its continued heavy use of fossil fuels, as the country prepares to receive its first shipment of US coal.

Prime Minister Beata Szydło has warned MEPs she will “throw it back at them” if they criticise her nation’s carbon consumption at next month’s EU summit.

And that could set the scene for more stand-offs next year, when Poland hosts the next round of UN climate talks.

The EU is playing a leading role in the Paris climate accord, which aims to radically cut global carbon emissions.

But Poland, the EU’s [second] biggest coal burning nation, is at odds with Brussels over the targets.

The ruling Law and Justice party are unapologetically pro-mining, a belief shared by US President Donald Trump, who visited the country in the summer and said: “Whenever you need energy, just give us a call.”

Poland has taken the President – who wants to exit the Paris agreement – at his word. This week The Navios Helios, a vessel carrying a 73,616 tonne coal shipment for Weglokoks from Baltimore, is expected to enter the harbour in Gdansk.

The new trade arrangement is mutually beneficial – Poland has to meet a shortfall left by the failure of national mining giant PGG to achieve its production targets, while US miners are relying on export growth as power utilities at home switch to cheaper, cleaner alternatives.

Energy Minister Krzysztof Tchorzewski rejected any suggestion of a fuel crisis due to the problems at PGG, even though smaller traders have often queued for coal in recent weeks.

He told reporters: “A psychosis related to coal shortages has appeared on the market.

“I can say that this winter no one will be cold in their homes because of a lack of coal.”

He declined to comment on the US import.

Meanwhile, EU ministers are meeting in Bonn today, where they are expected to tell Poland to “do more” on climate change – particularly by ratifying the Doha amendment, the second stage of the Kyoto Protocol, predecessor of the 2015 Paris agreement.

Donald Trump promised to help Poland with coal shortagesIronically, next year’s climate conference will be held in the southern city of Katowice – the centre of the coal-producing Silesia region and PGG’s home.

The timing of Warsaw’s new-found fondness for American coal will be a concern to Brussels and the UN as a whole.

Polish imports of US coal have already leapt more than 500 per cent in the first half of this year, according to the US Energy Information Administration.

And in promoting a national coal industry and trying to preserve jobs in traditional heavy industries, Poland has far more in common with President Trump than almost any other EU member.

However, while Trump has decided to pull the United States out of the Paris agreement, Warsaw is staying in.

The government of Silesian-born miner’s daughter Szydlo has opposed EU policies to reduce carbon emissions as they set binding targets, but backs the Paris deal as it did not impose specific obligations on signatories.

Full story

4) Cop Out: China, Europe Climate Buddy Act Flounders
Politico, 16 November 2017

BONN, Germany — So much for the Sino-European climate bromance. Developing countries are returning to the idea that wealthy countries should bear more of the emissions cuts.

The EU and China were supposed to become the tag team of international climate diplomacy, buddying up after President Donald Trump announced his intention to pull the U.S. out of the Paris climate agreement. Brussels and Beijing, the world’s other big polluters, are publicly committed to tackling global warming.

Now this relationship is under strain. The main culprit? With the U.S. marginalized on this scene, the EU is left to carry the standard for rich countries — and China for the developing world.

The strain created by this dynamic has emerged behind closed doors at the COP23 climate summit here. The EU is pushing to level out the share of responsibility between rich and poor countries for man-made climate change and for reducing emissions. For its part, Beijing wants developing countries to have greater leeway to meet targets set out in the 2015 treaty.

The differences are likely to grow more stark at next year’s COP24, when the complex set of rules for meeting the goals of the Paris climate agreement is due to be finalized.

EU Commissioner Miguel Arias Cañete and China’s representative on climate change Xie Zhenhua in Montreal in September 2017 | Alice Chiche/AFP via Getty Images

At the technical talks in Bonn that ended Tuesday, China pushed hard to demarcate responsibilities between developed and developing countries — called differentiation — throughout the text of the Paris climate agreement in a draft handed to ministers on Wednesday, according to negotiators and observers following the discussions. The political negotiations involving ministers run through Friday.

“China was putting differentiation in anywhere and weren’t agreeing to the text,” Mark Lutes, head of the World Wildlife Foundation’s delegation, said of last week’s technical talks.

China is particularly emboldened on the issue now that the U.S. — which has always been staunchly opposed to differentiation — has stepped to the side in the wake of Trump’s call to quit the Paris accord.

Bifurcation makes a comeback

The idea of treating rich and poor countries differently is called “bifurcation.” The Paris deal managed to paper over the issue by calling on everyone to pitch in and help slash greenhouse gases to the extent that they could.

Now developing countries are returning to the idea that wealthy countries should bear more of the emissions cuts. More than a century of their pollution, after all, is what many scientists say caused a lot of the problem of global warming. In response, developed nations point to burgeoning greenhouse gas emissions from countries like China, India and Brazil to say that everyone should shoulder the weight.

“We thought we put it away in Paris, that we went beyond that. But bifurcation is coming back,” said a European diplomat in Bonn, asking not to be named. “It’s quite a big fight and it’s a very important issue for the EU.”…

The EU and U.S. have long argued for a single, robust system to make sure everyone is measuring and reporting their emissions and aid in the same way. Without it, there’s no way to know, for instance, that one ton of CO2 cut in one country isn’t then emitted somewhere else. The poorest and most vulnerable countries are also keen to adopt a tough system, particularly to verify that developed countries fulfill their promise to spend $100 billion a year in public and private aid on climate change from 2020.

Full story

5) John Constable: Subsidies To Electricity Generation In The United States
GWPF Energy, 15 November 2017

Dr John Constable: GWPF Energy Editor

A new white paper from the “Full Cost of Electricity” research programme at the University of Texas at Austin provides valuable empirical information on the scale and character of Federal government subsidies and other support mechanisms to electricity generators in the United States. The study reveals that levels of support per unit of renewable electricity have been very high relative to support for fossil fuelled MWh, but are now declining, a trend that began as long ago as 2013.

With vilification of the United States’ record and current direction on climate policy reaching fever pitch in the Bonn Conference of the Parties (see Rupert Darwall, 
“At the U.N. Climate-Change Conference, the Two Minutes Hate”) it is timely to reflect on the precise details of the Federal Government’s track record in supporting low carbon electricity such as renewables and on its current direction of travel. Are President Trump’s declared intentions really the radical betrayal that the critics claim, or is he merely continuing accelerating the pace on a course already selected by the previous administration? And just how generous was Federal government support for green energy, as contrasted with support for the fossil fuel industries?

Answers to these questions, and many others, can be found in the numerous tables and charts of a new study, 
Federal Financial Support for Electricity Generation Technologiesfrom the Energy Institute of the University of Texas at Austin.  The paper is part of the Institute’s Full Cost of Electricity research initiative.

The limited scope of this particular white paper should be noted immediately to prevent confusion. The study concerns itself with Federal support for electricity generation, and does not cover policies applied at the individual state level. As a result the support and subsidies discussed here are confined to Federally administered direct grants, tax credits, and government guarantees. State level market coercions such as portfolio standards are not considered, so the sums described here are only part of the story and are inherently conservative. (State level analyses would be very informative, and we can hope that the Institute will publish such work in due course.)

Bearing the restricted scope of the present study in mind, we can turn to the results. Figure 1 (p. 6) records annual tax preference expenditure in the United States from 1985 to 2015.

It can be seen that there has been substantial Federal spending on both fossil fuels and renewables over the period. Spending on fossil fuels has fluctuated over the years, but has remained relatively steady, at approximately $3 billion to $5 billion per year (in 2015 dollars). Spending on renewables was historically lower, at a few billion dollars a year, but increased very significantly after 2005, with the American Recovery and Reinvestment Act (ARRA) of 2009, generally known as the Stimulus, causing a sharp jump in expenditure. Indeed support for renewables peaked in 2009 at $17 billion, and though it has been steadily declining since that time it still stands at about $8 billion.

The study authors correctly point out that such figures are a relatively small fraction of US GDP, but that truth should not be allowed to obscure the fact that they are in absolute terms very large. Indeed, the cumulative figure between 2005 and 2015 stands at not far off $100 billion (in 2015 dollars), representing a redirection of resources that must be counted as major even by American standards. It is hard to imagine that anyone reading this study could come away with the impression that the United States has done little or nothing for renewable energy. They have a long track record of generous support, and in the last decade have done an enormous amount.

Equally, no one should think that Mr Trump’s reluctance to continue high levels of support is a reversal of the trend. It is quite clear from this chart that the previous Federal administration had begun to scale back preferential tax treatment. Had she become President, Mrs Clinton would not perhaps have withdrawn from the Paris Agreement, but she would have almost certainly had to continue to reduce the levels of support for renewables.

Put simply, assistance at ARRA Stimulus levels could not continue, largely, one suspects, because it was not tax expenditure in the strict sense of taxation foregone. ARRA grants were fully “refundable”, meaning that developers receiving section 1603 grants under the scheme were entitled to claim direct cash funding from the Federal Government of up to 30 per cent of a project’s costs. Extremely generous treatment of this kind is inherently unsustainable.

Interesting though the collection of such information, together with relevant details fo the measures is, this study’s most original contribution is to calculate an estimate of support per unit of electricity (megawatt hour) generated, so that the relative scale of the support offered to renewable energy, particularly solar, can be compared to that given to coal, hydrocarbons (HC in the chart), and nuclear. The authors find that “renewables spending is modestly higher in absolute terms but several orders of magnitude higher on a per-MWh basis” (p. 25 ), as can be seen in the following chart:

Much of this very high level of support, both absolute and relative, results from the Stimulus funding, the wisdom of which must now be under question, particularly since the growth in the shale gas industry seems to have delivered emissions reductions at a much lower cost, and without comparable market distortions in its favour.

The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at

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