Coal Shows Resilience in Global Comeback
In this newsletter:
1) UN Climate Meeting: ‘Time Is Running Out To Save The … Paris Agreement’
AFP, 4 September 2018
2) UN Climate Talks: The Annual Ritual
Global Warming Policy Forum, 4 September 2018
3) What The Bangkok Meeting May (Or May Not) Deliver
Bloomberg, 3 September 2018
4) Vijay Jayaraj: Paris Climate Express Hits the BRIC Wall
Townhall, 25 August 2018
5) Coal Shows Resilience in Global Comeback
Neanda Salvaterra, The Wall Street Journal, 3 September 2018
6) India To Double CO2 Emissions By 2030 – But Within Paris Commitments
India Climate Dialogue, 21 August 2018
7) UK Local Government Pension Funds Invest £9bn In Fracking Companies
Financial Times, 4 September 2018
8) Climate & Energy Fiasco Leave Canada’s Prime Minister In Peril
Reuters, 31 August 2018
Full details:
1) Bangkok Climate Meeting: ‘Time Is Running Out To Save The … Paris Agreement’
AFP, 4 September 2018
Time is running out to save the Paris Agreement, UN climate experts warned Tuesday at a key Bangkok meeting, as rich nations were accused of shirking their responsibility for environmental damage.
The six-day UN conference opened with an urgent plea from delegates to finalise a “rule book” governing the Paris Agreement, the most ambitious global pact yet, to address the impacts of climate change.
The rule book will have guidelines for the treaty’s 197 signatories on how to provide support to developing countries worst affected, and manage the impact of climate change.
If nations cannot reach an agreement by a December summit in Poland—known as COP24—the Paris Agreement, carved out in 2015, will be at risk.
“The credibility of the process… is at stake,” Michal Kurtyka, president designate of COP24, said at the opening of Tuesday’s meeting.
“We are not moving as swiftly as we can,” he added. “We need concrete propositions and solutions now.”
Money is at the heart of issue. The Paris Agreement has promised $100 billion annually from 2020 to poor nations already coping with floods, heatwaves, rising sea levels and super storms made worse by climate change.
Developing countries favour grants from public sources and demand visibility on how donor nations intend to scale up this amount.
Rich countries want more private capital in the mix and prefer projects with profit potential.
Pressure is mounting on developed nations to take on more long-term financial responsibility given that their progress has exacerbated climate change.
As the impacts get worse, “the poorest and most vulnerable, who have contributed almost nothing to the problem, suffer more,” said Patricia Espinosa of UN Climate Change, in a statement.
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2) UN Climate Talks: The Annual Ritual
Global Warming Policy Forum, 4 September 2018
Each year since 1995, the nations of the world have gathered to try to reach a global agreement on carbon dioxide emissions.
These ‘Conferences of the Parties’, or COPs as they are usually termed, involve all of the members of the United Nations Framework Convention on Climate Change and take place towards the end of the year.
This year will see the 24th COP take place in Katowice, Poland.
Over the years the COPs have developed a style all of their own. Indeed, some observers have even gone as far as to suggest that each year sees less and less by way of meaningful activity, and more and more liturgy and ritual.
They may just have a point as our historical review reveals.
3) What The Bangkok Meeting May (Or May Not) Deliver
Bloomberg, 3 September 2018
Envoys from almost 200 nations gather in Bangkok Sept. 4-9 to take the latest steps in the fight against climate change.
Convened by the United Nations, the delegates from energy and environment ministries are working on a rulebook to implement the landmark Paris Agreement, where countries rich and poor would work to cut heat-trapping pollution. The talks aim to lay the groundwork for the annual UN climate summit, which takes place later this year in the Polish city of Katowice.
1. What’s the aim of the Bangkok talks?
Civil servants are trying to agree on a set of rules that flesh out the 2015 Paris deal. What they produce will be fine-tuned and adopted by ministers at December’s higher-level meeting in Katowice. The co-chairs of the meeting have a difficult task on their hands. They must narrow an unwieldy set of working documents to something politicians can realistically agree on.
2. What happens if they can’t agree during these talks?
There will almost certainly be more talks no matter what the outcome in Bangkok. This group has been meeting for three decades, producing historic agreements every few years. It produced both the Kyoto Protocol as well as the Paris deal. The meeting in Poland “will be in jeopardy” if there’s no satisfactory outcome in Bangkok, the organizers of the group said on Aug. 16. In an unusual step, they indicated support for another round of discussions before December if needed.
3. Why has it been so difficult to reach an agreement?
There’s a lot to get through. And delegates are reluctant to agree on any single measure until everyone is happy with the shape of the whole deal. Developing nations want richer ones to make good on a promise for $100 billion a year in climate-related funding. Richer countries want developing ones do more to rein in their own emissions -- and to open up to inspectors who can verify those cuts. Underneath those broad demands are thousands of details and aspirations needed to implement the Paris deal. And since that agreement came together in 2015, the nations at the table have drifted back into historic factions, bickering on issues including:
- Developing countries accuse the rich -- that mainly caused the climate problem -- of not doing enough
- Industrial nations seek more climate action from emerging ones -- they don’t want them riding for free on rich-nation effort, money, and technology
- Island nations most at threat from global warming want quicker action
There’s a sense of an absence of leadership pushing for action, with U.S. President Donald Trump vowing to leave the Paris deal and Chinese President Xi Jinping focused other issues ranging from trade to foreign policy.
4. What’s the U.S. position at these talks?
While Trump has pledged to pull out of Paris, the U.S. remains a player at in Bangkok because it remains a part of the 1992 UN Framework Convention on Climate Change, the treaty that established the discussions. It also will take years to complete the withdrawal from Paris. That means Trump’s representatives remain influential even if they don’t endorse the end result.
5. What are China and India doing?
The two economic powerhouses sit in the BASIC negotiating group (representing Brazil, South Africa, India, and China). In May, they committed to work toward a deal and want developed countries to take the lead in emissions. They’re also looking for evidence the richer nations will make good on a 2009 pledge to mobilize at least $100 billion a year in climate-related finance by 2020. India wants additional pre-2020 pledges from wealthy polluting nations.
6. What’s the likely outcome in Bangkok?
Some parts of the Paris rule book are likely to emerge even if the whole package isn’t nailed down. There’s potential that nations will agree on a framework for channeling aid and financing to the poorest nations. Countries including Norway and Switzerland are looking to the carbon market as a possible transfer mechanism that would shift money to developing nations for cutting emissions in exchange for credits that richer nations could use to offset their own pledges.
7. What would failure mean for markets?
No agreement in Bangkok would slow the process of setting up investment channels for greening the world economy…..
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4) Vijay Jayaraj: Paris Climate Express Hits the BRIC Wall
Townhall, 25 August 2018
The Paris climate agreement’s momentum has taken another big hit with a new challenge. Brazil’s presidential forerunner has indicated that the country will quit the Paris agreement if he gets elected. Will the outdated climate agreement survive the departure of developing countries?
BRIC is an acronym that refers to the countries of Brazil, Russia, India and China—countries that are at a similar stage of economic development and considered to be the big developing countries.
All these four countries signed the Paris climate agreement (2015), which required the 195 Signatory countries to reduce their carbon dioxide emissions to limit the increase of global average temperature to below 2°C above pre-industrial levels.
The signatory countries were expected to pursue their Intended Nationally Determined Contributions (INDC), which lay out their respective plans to curb carbon dioxide emissions. But there are no legally bounding conditions to make these countries not leave the agreement.
The Philippines was the first country to refuse ratification of the agreement. In 2017, the newly elected government in the U.S. announced that it would pull out of the Paris agreement.
But even before these events transpired, it was believed that the agreement’s primary hurdle would be convincing the big developing countries to reduce carbon dioxide emissions, since coal accounts for the majority of their energy production.
And expectedly, BRIC countries like China and India were the first to resist the proposed policies, and India proposed the concept of “climate justice.”
That was the idea that developed countries should pay developing countries compensation for the slowing down of their economic growth that would result from the mandatory transition from coal to more expensive renewable energy sources, as proposed in the agreement.
Despite the approval of such funding, both India and China continued to expand their coal consumption. They continue to import, export, and use coal extensively. At their current pace, neither country will ever achieve their emission targets as mentioned in their respective INDCs.
Russia, meanwhile, is quietly developing its coal infrastructure despite its claims of reducing carbon dioxide emissions. In 2015, Russia’s coal production stood at 186.37 million TOE (Tons of Oil Equivalent). It jumped to 206.33 million in 2017.
The country is expanding its coal infrastructure to enable more streamlined transport of coal across the country and to meet the increase in exports due to demand from its Asian neighbor China.
And the Paris climate express has now hit the last of the BRIC wall–Brazil.
Brazil’s presidential forerunner Jair Bolsonaro has promised to pull Brazil out of the Paris agreement if he is elected. This comes as no surprise. Brazil has been lagging behind its BRIC counterparts in the energy sector.
This is partly due to the unavailability of massive domestic coal reserves like those in India and China. Between 2010 and 2015, coal consumption in the country rose by 22 percent. To meet the growing demand, the country has increased its imports. More recently, China has aided its development of coal plants.
At this critical juncture of its energy development, Brazil cannot afford to abandon coal.
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5) Coal Shows Resilience in Global Comeback
Neanda Salvaterra, The Wall Street Journal, 3 September 2018
Coal is clinging to the top spot in power generation, accounting for as much of the world’s electricity as it did two decades ago, despite heightened concerns about climate change and a slowdown in financing for projects involving the dirtiest of fossil fuels.
U.S. exports of coal more than doubled in 2017 and are set to grow this year, according to the Energy Information Administration. Countries across Asia and Africa are expected to increase their use of coal for expanding power generation through 2040, says the EIA.
The rebound shows coal’s resilience, especially in emerging regions, and recent events suggest the market for black combustible rock will remain strong. In the U.S., the Trump administration has proposed to reverse U.S. rules on coal emissions, and countries including India and Vietnam are planning major coal projects.
Coal accounted for 38% of the world’s electric power generation in 2017, putting it at the same level as in 1998, according to a recent report by BP PLC. A revival of the thermal coal market last year helped to lift mining companies’ earnings and share prices. Among them was Glencore PLC, one of the world’s largest mining concerns. In March, it spent $1.7 billion for coal assets in Australia as part of a bet that demand for coal in Southeast Asia will remain robust.
Meanwhile, global carbon emissions from coal and other fossil fuels increased by 1.4% in 2017 after three flat years. The rise is attributed to economic growth and increasing energy demand in Asia, according to the IEA. Emissions are linked to rising global temperatures and more extreme weather patterns, experts say, and coal is a leading contributor to human health problems.
The World Bank stopped financing coal in 2010 because of the hydrocarbon’s link to global warming, and many international banks are turning away from fossil fuel projects. Last year, Deutsche Bank said it wouldn’t grant financing for new coal mining or coal-powered projects. In July, Lloyds Banking Group said it would stop extending loans for new coal ventures.
Still, coal plants are attractive because they are less expensive to build than renewable energy facilities. The cost of constructing a renewables plant is roughly double the outlay of a fossil-fuel facility, experts say.
Government officials in developing nations, many of whom say they want to curb the use of coal to combat climate change, often face the difficult challenge of doing so without slowing economic growth.
That tricky balance is seen particularly in Nigeria, where coal is abundant and cheap yet some 54% of the country’s 190 million citizens lack access to electricity. The country has a plan under way to deliver power from coal-fired plants to more of its people.
Today, Nigeria generates all of its power with a mix of hydroelectric dams and natural gas, but frequent vandalism of pipelines causes power shortages. By 2030, Africa’s biggest economy plans to add 30 gigawatts of power, of which about 30% will be produced by renewable sources and about 3% will be from coal. The project will cost about $3.5 billion a year.
The World Bank approved a $350 million loan for solar mini-grids and other equipment to provide electricity in Nigeria. But the bank has said it would no longer finance projects involving coal—anywhere in the world. Bank officials say countries looking to fund coal ventures should look to the private sector.
“I think it’s simplistic to begin to separate renewable energy from fossil fuel,” said Babatunde Fashola, Nigeria’s minister of power, works and housing. “What the world really needs is to achieve a balance.”
There are some 2 billion tons of coal in the country, according to estimates, and economists say putting it to use to spread power could be a boon for the economy.
Many emerging nations are fighting similar issues, even as more prosperous countries such as the U.S. and the U.K. have reduced the use of coal to produce electricity.
On the Asian continent, home of the world’s largest coal reserves, China and India account for most of the growth in coal use. Vietnam plans a fivefold increase in its coal capacity through 2035, according to the Clean Coal Centre, a division of the IEA.
Bangladesh plans to use coal to generate 50% of the country’s power by 2030, up from 2% today. Like many countries in the region, it is funding its expansion with loans and technological help from China and Japan.
Full story
6) India To Double CO2 Emissions By 2030 – But Within Paris Commitments
India Climate Dialogue, 21 August 2018
In 2030, when countries have to take stock of their commitments under the Paris climate agreement, India will double its carbon dioxide emissions from its 2012 levels, but will still be within its intensity pledge, according to a new study by experts from the New Delhi-based Centre for Policy Research and elsewhere.
This is because India is starting with a very low base. “India’s 2030 per capita emissions will be below today’s global average and absolute emissions will be less than half of China’s 2015 emissions from the same sources,” says the study, the lead author of which is Navroz Dubash of the CPR.
The study notes the models predicting future emissions vary widely because they are based on different, often implicit, assumptions. The authors use a novel interpretive approach where they make clear the assumptions regarding technologies and policies in their model-based scenario analyses. They use these as a benchmark to judge scenario assumptions and results.
According to the study, India plays a key role as a “significant” emitter of greenhouse gases, but starting with a low base level, and as a large emerging economy, is also a major actor in mitigating carbon emissions. It observes that perceptions of India’s role vary from “an energy-hungry climate deal-breaker to a forerunner of a low carbon future.”
Thus a 2017 paper by R. Fofrichof the University of California at Irvine and Christine Shearer from the NGO CoalSwarm on future carbon dioxide emissions and electricity generation from proposed coal-fired power plants in India states: “India represents a critical unknown in global projections of future CO2 emissions due to its growing population, industrialising economy, and large coal reserves.”
It assessed existing and proposed construction of these plants and evaluated their implications for future energy production and emissions in the country. “In 2016, India had 369 coal-fired power plants under development totalling 243 gigawatts (GW) of generating capacity. These coal-fired power plants would increase India’s coal-fired generating capacity by 123% and would exceed its projected electricity demand.”
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7) UK Local Government Pension Funds Invest £9bn In Fracking Companies
Financial Times, 4 September 2018
Local UK council pension funds have more than £9bn invested in companies engaged in fracking, despite fierce debate over shale gas exploration.
Some councils have more than 5 per cent of their funds invested in companies that use hydraulic fracturing to release gas from shale rock, according to research compiled by Platform London, 350 and Friends of the Earth, the campaign groups…
The data tracked exposures in March 2017, when local council pension funds had total assets of £290bn.
Funds with the biggest exposures as a proportion of their overall portfolio included Greater Manchester Pension Fund, the UK’s second-largest local pension scheme with assets of £17.2bn, and the £834m Dumfries and Galloway Pension Fund. The funds had exposures of 5.8 per cent and 6.7 per cent respectively.
Lancashire County Pension Fund has assets of £7.1bn, of which 2.6 per cent is exposed to fracking, although only via indirect exposures through passive investment products.
Full story
8) Climate & Energy Fiasco Leave Canada’s Prime Minister In Peril
Reuters, 31 August 2018
WINNIPEG, Manitoba (Reuters) – With one surprise court ruling, Canadian Prime Minister Justin Trudeau faces the risk of contesting next year’s election with key pieces of his economic and environmental plans in ruins.
The Federal Court of Appeal overturned on Thursday the Liberal government’s 2016 approval to expand Trans Mountain, a critical pipeline to link Canadian crude with foreign markets, followed hours later by Alberta’s tit-for-tat withdrawal from Trudeau’s climate plan.
The day’s events amplified criticism that Trudeau has failed to produce a regulatory system in which oil pipelines stand a chance of approval and undermined the PM’s ambitions to reduce emissions.
In short, they left him vulnerable to bleeding disappointed supporters on both his right and left, said Paul Thomas, professor emeritus at University of Manitoba.
“A lot was riding on the energy file,” Thomas said. “There is no spin you can put on this that would be positive.”
At the heart of the centrist Trudeau’s plans for the economy and environment was a bargain with Alberta, Canada’s energy province. The Liberal government approval of Trans Mountain would provide Alberta oil producers with a larger export outlet to the British Columbia coast, and secure Alberta’s support of Trudeau’s national emissions plan.
Trudeau doubled down in May, agreeing to buy the faltering pipeline project for C$4.5 billion from Kinder Morgan Canada.
But Trudeau’s bargain collapsed with the court’s rejection and Alberta Premier Rachel Notley’s exit from the carbon plan.
Buying a pipeline was always unpopular with progressive voters, said Nik Nanos, head of polling firm Nanos Research.
“Now they run into double jeopardy politically because they have an issue of whether they can deliver. And it’s having a knock-on effect on other issues, like carbon pricing.”
The party, which won a huge 2015 majority, is running close with the opposition Conservatives according to polls, and faces another risk in tough U.S. trade talks.
Trudeau on Friday said he could proceed with a national environment plan without Alberta’s support.
His worst scenario would be to shed environment-minded voters to the New Democratic Party and economy-focused supporters to the Conservatives, while other Liberals stay home on voting day expected in October 2019, Nanos said.
Full story
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 www.thegwpf.com.
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