#22: From Washington to Copenhagen

May 28, 2009
by phil
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With a new President in the White House there’s a fresh approach to climate change and energy policy in the US. But the Energy bill currently going through Congress is based on the widely-criticised “Cap & Trade” system and has been weakened further by a massive corporate lobbying campaign. How does this feed into the UN talks in Bonn in June which prepare the way for the critical meeting in Copenhagen in December? We get an informed critique of the Bill from Oscar Reyes of Carbon Trade Watch and ask him what to look out for in Bonn.

Key points

  • A huge lobbying effort has watered down US “Cap & Trade” Bill
  • Key Democrats financed by vested interests
  • “Cap & Trade” itself is a flawed model
  • The Breakthrough Institute has calculated that there are so many international offsets in the Bill that it is possible that the US might not reduce emissions domestically until 2030
  • Obama has reneged on his election platform pledge that 100% of carbon permits would be auctioned – 85% are now being given away free to polluting industries in an effective windfall
  • There is an upper cap on the carbon price in the Bill of $28/TC. This is insufficient to incentivise the transition to clean energy
  • Some of the same architects of the sub-prime crisis (in terms of deregulation and opaque financial derivatives) are involved in designing today’s carbon markets
  • The overall ambition of the “Cap & Trade” Bill is a theoretical cut of 17% in C02 by 2020 relative to a baseline year of 2000. But the UN baseline year is 1990. Compared to 1990 levels the US ambition could equate to just a 4-5% cut. China is suggesting that industrialised nations need to make a 40% by 2020.
  • Reuters has estimated that the cuts so far proposed by industrialised countries amounts to between 9 and 16 per cent cut by 2020 compared to 1990 levels (and this is presumably before you factor in fake reductions from offsets.)
  • Climate scientist Bill Hare has recently noted that nothing on the table for Copenhagen is currently anywhere near sufficient to keep us below 2C of global warming, let alone the safer threshold of 1.5 degrees demanded by the coalition of 100 countries (representing 1bn people) that are most immediately vulnerable to the impacts of climate change.

Oscar’s tips on what to look for in Bonn:

  • G77+China has a proposal on the table that World Bank Climate Investment Funds go through the more democratic UN process instead
  • The push for the inclusion of forestry (aka REDD – reduced emissions from Deforestation and Degradation) into the carbon markets continues and must be resisted. The emphasis must turn instead to managing the drivers of deforestation
  • China & India are pushing for a relaxation on intellectual property rules to help enable the roll out of clean energy technologies in the South. The US is resisting.
  • Bolivia has made a very interesting and wide-ranging proposal

Corporate lobbying

Corporates lobby against US Climate Bill – Suzanne Goldenberg (Guardian, 12 May)
Key Democrats in the pay of vested interests (Grist, 2 May)
Key Democrat boasts that “Cap & Trade” offsets mean coal can continue
Centre for Public Integrity investigations on corporate climate lobbyists
Key European officials confirm corporate efforts to weaken EU trading scheme

“Cap & Trade” critiques

James Hansen’s Testimony on “Cap & Trade” vs “Tax & 100% Dividend”
Friends of the Earth “A Dangerous Distraction” report
Carbon Trade Watch – various
The Subprime Carbon Report + Video (FoE US)
Larry Lohman: Financialization, Quantism and Carbon Markets

Criticism of the use of international offsets in the UK

Tyndall Centre says the UK’s use of international offsets will delay the move to a low-carbon society and create dangerous high-carbon lock-in
UK must set and meet ambitious targets without the use of international offsets (Andy Atkins, Director, Friends of the Earth)

International offsets in the US “Cap & Trade” Bill

Breakthrough Institute on international offsets
International Rivers, etc analysis

Obama’s election platform

Obama & Biden: New Energy for America
Compare the Candidates, Grist 2008

Industrialised country ambitions for Copenhagen

“Not much bolder than Kyoto?” Reuters analysis inc. Bill Hare quote (7 May)
EU position on Copenhagen (Jan, 2009)
US Climate Plan Threatens EU Targets

Ceiling and floor price on Carbon

Lord Adair Turner adds his voice to the call for a “floor” (ie minimum) price on carbon
Newsnight’s Ethical man on Cap & Trade Bill’s $28 upper cap on carbon price

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