World Energy President and Chief Operating Officer Phil Adams is speaking on the keynote panel at today’s Voluntary Carbon Markets conference in New York City, which is the premiere US event focused solely on the market. The panel kicks off the conference’s focus on the past, present and future of the US voluntary market.

The Wall Street Journal discusses how top US investment banks, including Citigroup, JP Morgan Chase & Co. and Morgan Stanley are anticipating government caps on greenhouse-gas emissions and are setting environmental standards for companies trying to acquire financing for coal-fired power plants. In a move to reduce debt risk, the banks will require these companies to prove their viability under the possible regulations before receiving financing.

This article from The Times discusses how the European Union might limit the ability to trade Certified Emission Reduction credits after 2012 if a successor treaty to the Kyoto Protocol, which will create a wider market for carbon, is not agreed upon. This could potentially harm a United Nations plan that promotes carbon-reducing power projects in poor countries.

Reuters looks at a new report from a Canadian government-commissioned panel which suggests the Canadian governments should spend C$2 billion to encourage the implementation of technologies to capture and store carbon. The panel estimates that the aid could help get three to five capture and storage projects operational by 2015. There is concern, however, that carbon capture will replace initiatives that reduce greenhouse gases.

Industry Flexes Muscle, Weaker Energy Bill Passes

Pared-down energy legislation cleared the Senate on Thursday by a wide margin after the oil industry and utilities succeeded in stripping out provisions that would have cost them billions. The legislation still contains a landmark increase in fuel-economy standards for vehicles and a huge boost for alternative fuels. But a $13 billion tax increase on oil companies and a requirement that utilities nationwide produce 15% of their electricity from renewable sources were left on the floor to secure Republican votes for the package.

Emissions deal to be aimed at key sectors

Businesses in energy-intensive sectors such as cement, steel and aluminium will be asked to sign up to industry-wide pacts on cutting their greenhouse gas emissions, under plans due to be agreed at an international climate change conference today. The negotiations on an international post-2012 framework will include a provision for “global sectoral agreements” aimed at industry. These will require the leading companies in certain sectors to meet and agree on targets to cut their carbon dioxide emissions.

Bali Climate Talks Draft Drop 2020 Emissions Goal

A compromise draft text to launch in Bali two years of negotiations for a global pact to fight climate change has dropped a key ambition of tough 2020 greenhouse emissions cuts for rich countries. The text, trying to end a dispute between the U.S. and the EU on the last day of two-week U.N. talks, retained an ambition for global greenhouse gas emissions to peak in the next 10-15 years and to fall well below half of 2000 levels by 2050.

Poor Nations Demand Green Technology

Poorer countries accuse the rich of pressuring them to control emissions of greenhouse gases blamed for global warming, while refusing to provide them with technology needed to do so without hurting their economies. They have made their demands that rich nations provide cheap access to green know-how a centerpiece of the U.N. climate change conference. Wealthy countries say they must consider demands of private companies for protection of their intellectual property rights, assurances they will have the opportunity to profit from their investments, and better regulation and laws in host nations.

Race for carbon-offset permits heats up

Demand for access to carbon-offset projects is rising as companies volunteer to cancel out their emissions at a faster rate than expected. The price of access to offsets looks set to rise after the second trading round for European carbon-emission permits, which begins next month. They are trading at a discount to second-round European Union carbon futures, which have already started to trade ahead of the round’s commencement in January.

Avatar will address Bali conference

From Boston Globe- Representative Edward J. Markey, a Massachusetts Democrat, will speak about the dangers of global warming to any audience who will hear him. But he couldn’t go to one of the biggest stages of all - this week’s international conference on climate change in Bali, Indonesia - because of the congressional negotiations over the energy bill in Washington.
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So a “virtual” Markey, an animated likeness of the congressman called an avatar, will be present instead.

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With post-Kyoto discussions taking place in Bali, here are just a few thoughts on what they mean and what they don’t:

Bali is really several steps ahead of the meetings that we should pay close attention to, as Bali will lead to another meeting, which leads to another, and so on before we arrive at a successor to the Kyoto Protocol. However, with the US Presidential election heating up and Congressional action on greenhouse gas emissions drawing near, we will see increased political posturing surrounding the Bali meetings.

Here’s what Bali will do – these meetings will provide the first official venue for examining the likelihood of a post-Kyoto framework that involves the world’s largest emitters. As such, there are three basic achievements that would make this initial meeting relatively successful:

1) some sort of long-term commitment by Kyoto’s signatories to address the post-2012 vacuum, probably using atmospheric concentration levels, temperature goals, or emissions reductions as an organizing framework,

2) further commitments to binding targets by the industrialized world (EU, Japan, now Australia) with the notable exception of the U.S., and

3) some sort of movement toward a commitment from the developing world, although this will probably be modest in nature.

After the meetings, it will be interesting to see if movement on the US front aligns with discussions in Bali. Although it is certainly early in the process, over the coming months it will be important to watch and see if legislation introduced, such as the Lieberman/Warner (just out of Senate’s Environment and Public Works Committee) or the Bingaman/Specter bills, will match with what the future treaty will require. The risk, of course, is that any legislative action taken in the U.S. could conflict with Kyoto’s eventual successor.

-Rick

Roadblocks Remain to Energy Bill

From the Wall Street Journal:

WASHINGTON — Despite a historic agreement to raise automobile fuel-efficiency standards, House and Senate leaders remain divided over other elements of a comprehensive energy bill that could stall or kill the effort.

Kyoto’s Caps on Emissions Hit Snag in Marketplace

From the Wall Street Journal:

The Kyoto Protocol was supposed to harness market forces to solve global warming. It slapped caps on greenhouse-gas emissions and set up a complex market for companies to trade permits to pollute.

Kyoto’s Failure haunts New U.N. Talks

From the Los Angeles Times:

In the Kyoto Protocol’s accounting of greenhouse gases, the former Easter bloc is a smashing success.

Russia: Down 29% in carbon dioxide emissions since 1990.

Romania: A 43% reduction.

Latvia: A resounding 60% drop.

Can Climate Progress Succeed Without U.S.?

From ABC News:

The United States stands alone as the last major industrialized country not to have ratified the Kyoto Protocol, after Australia’s announcement Monday that it would now sign the pact.

US Wants to Negotiate New Climate Pact

From the AP:

American delegates at the U.N. climate conference insisted Monday they would not be a “roadblock” to new international agreement aimed at reducing potentially catastrophic greenhouse gases.

Things change quickly in our industry.

While it is great to see the U.S. Congress leading by example on climate change mitigation strategies, this transaction should be seen as one small sign in a broader sea change in U.S. politics surrounding climate change.

The two leading climate bills in the Senate are bipartisan, have largely been well-received, and are designed to accommodate a post-Kyoto international emissions regime. The Lieberman/Warner bill, currently in the Senate Environment and Public Works Committee, would cap emissions to 70% below 2005 levels by 2050. The Bingaman/Specter bill, currently in the Senate Energy and Natural Resources Committee, calls for a reduction of emissions to 2006 levels by 2020 and to 1990 levels by 2030.

On the campaign trail, nearly all the leading Presidential candidates have

Stated the need for the U.S. to move forward with an emission reductions program

Agreed that domestic efforts should dovetail with a post-Kyoto framework

And internationally it is interesting to see that the U.S.’ partner in rejecting the Kyoto Protocol, Australia, appears to be on track for embracing Kyoto. Over the weekend, the newly-elected Prime Minister Kevin Rudd promised to “quickly ratify” the Kyoto protocol, which should further spur the development of carbon trading in Australia, the world’s largest per capita emitter.

How do you think all of these changes will effect the policies and rhetoric? As we’re heading towards the end of 2007 I’d love to her your 2008 predictions.

-Rick