By Chris Lang
The agreement that came out of the Conference of Polluters (COP-17) in Durban included no new commitments to reduce emissions. “What we got instead was a clear signal that we might get another clear signal in 2015,” as Jonathan Grant, director of carbon markets and climate policy at PricewaterhouseCoopers told the Financial Times.
The Conference decided to create an Ad Hoc Working Group on the Durban Platform for Enhanced Action, which is to start work “as a matter of urgency in the first half of 2012”. It is to complete its work “as early as possible but no later than 2015”. And its work is “to develop a protocol, another legal instrument or an agreed outcome with legal force under the Convention”. Whatever that means. This is to be adopted at COP21 and will “come into effect and be implemented from 2020”.
The Conference also explicitly acknowledged that the proposed emissions targets from Copenhagen and Cancún are not going to be enough to stand much chance of keeping global warming below 2°C:
Noting with grave concern the significant gap between the aggregate effect of Parties’ mitigation pledges in terms of global annual emissions of greenhouse gases by 2020 and aggregate emission pathways consistent with having a likely chance of holding the increase in global average temperature below 2 °C or 1.5 °C above pre-industrial levels,
So, having acknowledged that almost 20 years of negotiations have failed, the Conference decided to postpone any action until 2020.
In May this year, Abyd Karmali, global head of carbon markets at Bank of America Merrill Lynch, pointed out that without targets to reduce emissions, there is no demand for carbon credits:
“Where is the big demand push going to come from? And at present, it’s not so visible. The lack of significant commitments to emissions reductions means that we’re not going to see a big demand for the forestry progress. And I think that is the significant road-block that needs to be addressed.”
Yet now, after a decision to postpone a decision, Karmali told the Financial Times that the deal agreed in Durban was “like a Viagra shot for the flailing carbon markets”.
Two things are worth noting about Karmali’s post-Durban comment. First, he is confirming, at least metaphorically, that carbon markets are impotent. Second, he seems to have noticed only one of the patient’s symptoms. As Reuters commented yesterday, “carbon markets are still on life support” after the Durban deal.
In Durban, negotiators failed to agree a decision on financing REDD and postponed the decision until COP18. This decision was also postponed last year, in Cancún. Nevertheless, Conservation International attempts to spin this as progress towards a REDD carbon market. Conservation International’s Becky Chacko told Point Carbon that:
“It will be the first time in the UNFCCC that market mechanisms and REDD are mentioned in the same sentence. . . . The stronger the signal is, the more clarity you give to investors. The time is right to show the opportunity markets hold for REDD.”
Perhaps Chacko hasn’t looked at the price of carbon recently. In the EU carbon prices have lost over half their value since June 2011, as a result of the economic crisis, an over-supply of credits and a lack of demand. Durban addresses none of these problems.
Carbon traders are much more cautious than Conservation International. “It’s a sedative situation,” Jacopo Visetti, carbon trader at AitherCO2 told Reuters. “A sick market needs a cure and instead of deciding which cure to use, the doctors keep using pain relief to gain more time to make the final prognosis.”
In 2007, when the Intergovernmental Panel on Climate Change (IPCC) released its fourth assessment report, the panel’s chairman, Rajendra Pachauri said,
“If there’s no action before 2012, that’s too late. What we do in the next two to three years will determine our future. This is the defining moment.”
On Climate Progress, Joe Romm, wrote that the debate on climate is over and that further delay would be fatal. “In short — time’s up! America — we better pick the right President in 2008,” Romm wrote.
Four years later, Joe Romm’s head must be exploding. We have seen nothing but further delay and Durban guarantees eight more years of delay. Yet Romm remains a faithful US Democrat Party lapdog. He describes the Durban deal as “a pretty big success, committing the entire world — not just rich countries — to develop a roadmap for reductions”. It is a success, he wrote, “on the basis of what we think was plausibly achievable, not what is theoretically possible”.
Romm points out that “from the perspective of what is needed to avert catastrophic climate change, the agreement was, sadly, lacking.” But then he quotes his boss, John Podesta, the head of the Center for American Progress:
“I want to congratulate Todd Stern, Special Envoy for Climate Change, and his team on a successful outcome at Durban and applaud the strong interagency process that the administration employed to shape this agreement. The Obama administration saw an excellent opportunity here to push China into an agreement to play by the same rules as everyone else and took it.”
None of this is too surprising. Stern was a Senior Fellow at the Center for American Progress before Hilary Clinton appointed him as Special Envoy for Climate Change. In a speech after the Copenhagen fiasco, Stern said, “CAP [Center for American Progress] is my alma mater.”[1]
After arriving home from Durban, Pablo Solón, Bolivia’s former ambassador to the United Nations and former chief negotiator on climate change, gave an interview to Democracy Now! He described the outcome as climate apartheid:
“If there would have been a second commitment period of the KP [Kyoto Protocol], and the U.S. would have said, ‘OK, we are going to reduce an amount of 20, 25 percent,’ we could have said, ‘OK, we’re in a bad situation, but we are doing our best in order to get out of this.’ But now we can say, ‘We are in a bad situation, and we are doing our best to be in a worse situation, because nobody wants to do nothing.’ Developed countries, like the U.S., Europe, Japan, Russia, are just trying to avoid their responsibility when it comes to greenhouse emissions cuts. So, that is the real outcome out of Durban, and that is why there is so much concern around the world, because, especially the developing countries, the poor nations, and the poor people around the world, even in the United States, are going to be those ones that are going to suffer the consequences of this. That is why we call it a climate apartheid.
[1] I commented on a post on Climate Progress last week, asking who funded Climate Progress. I asked because an article on Climate Progress about the Green Climate Fund was so completely void of critical analysis I wondered whether it was a press release. Romm’s response? “You don’t really read Climate Progress much. It shows.” In a follow up comment, he explained that “I get my salary from the Center for American Progress, who gives me full editorial control … To suggest we are spinning things to make the WH look good is to admit you don’t read CP.” Two days later, Podesta and Romm described Durban as a “success”. And my comments on Climate Progress no longer get past Romm’s moderation.
I imagine that what Mr Karmali must be referring to is the known side-effect of Viagra to cause sudden cardiac failure when administered to those suffering from a weak heart.
In that sense, his analogy would seem perfectly appropriate to what the Durban outcome will do for the ‘ailing’ carbon markets, as he will soon find when serious investors start looking at what has REALLY come out of COP 17, rather than what desperate politicians would like the public to believe has come out of it.
Still struggling to establish policy that surrenders valaue to not producing. Hum………marks out of 10 ? You should see the losses piling up for those who have engaged with this sector, the trail of bankrupt stock, bankrupt aspirations and bankrupt projects is impressive. The airmiles alone ensure that there is no carbon reduction. The costs and lack of collaborations, as the interests are profit driven at the nub end, ensure that the trickle down of values is minimal in terms of community, social gain and habitat preservation. Essentially the UNFCCC – RED COP ideologies are manipulated at nefarious levels beyond belief. There being less incentives all round it is clear that COP 17 concluded to stop this charade.
Or maybe Karmali is saying, hopefully, that the carbon market’s ability to f*ck the planet have been enhanced??
It seems that any positive reaction to this whole debacle will occur from 2030 onwards when oil….the consumer of all our addictions becomes economically non viable….will our responsibilities come to fruition.
Nothing since 1992 has had any effect on changing the ecomomic and political mindset which is still prevalent today; its only when greed comes to an end in its current format and it accomplishment with the consumption of this fossil fuel, which is the Tsar for driving destructive economies across our planet, will all the effort which is being made on this website and thousands come to a green economic fruition.
As a whole we are a stupid species and we will only learn with our virtual own destruction of the future resource wars in a global context within the next twenty five years…..
Publish this or not the results under all current actions will be the same.
Viagra may help for a short period of time but does nothing to help the underlying problem……. The whole CC industry is HOT AIR
And this little shot in the arm just might finish off the patient:
Someone should take Abyd Karmali, Andrew Stern, Peter Kent and all the other political ditherers and carbon profiteering planet-wreckers and show them this:
The Independent
Shock as retreat of Arctic sea ice releases deadly greenhouse gas. Russian research team astonished after finding ‘fountains’ of methane bubbling to surface. Dramatic and unprecedented plumes of methane – a greenhouse gas 20 times more potent than carbon dioxide – have been seen bubbling to the surface of the Arctic Ocean by scientists undertaking an extensive survey of the region. The scale and volume of the methane release has astonished the head of the Russian research team who has been surveying the seabed of the East Siberian Arctic Shelf off northern Russia for nearly 20 years. In an exclusive interview with The Independent, Igor Semiletov, of the Far Eastern branch of the Russian Academy of Sciences, said that he has never before witnessed the scale and force of the methane being released from beneath the Arctic seabed. “Earlier we found torch-like structures like this but they were only tens of metres in diameter. This is the first time that we’ve found continuous, powerful and impressive seeping structures, more than 1,000 metres in diameter. It’s amazing,” Dr Semiletov said. “I was most impressed by the sheer scale and high density of the plumes. Over a relatively small area we found more than 100, but over a wider area there should be thousands of them.”
http://www.independent.co.uk/environment/climate-change/shock-as-retreat-of-arctic-sea-ice-releases-deadly-greenhouse-gas-6276134.html
It looks like Durban’s Viagra has worn off already…
Yep, that Viagra is definitely starting to take effect…
Maybe it’s already time for Abyd Karmali’s outfit to change its name once again – perhaps to the Climate Markets Dis-investors Association? Or to ‘Those Who Have No Shirts’?
EU carbon plunges 10 pct to record low of 6.30 euros
14 Dec 2011 17:54 CET
http://www.pointcarbon.com
EU carbon prices fell to their lowest ever level on Wednesday as the euro currency and equities slid on renewed fears over the bloc’s debt crisis and oil prices tanked after producers promised to maintain high output.
The ICE ECX December 2011 EUA contract fell 73 cents to an all-time low of 6.30 euros, down 10.4 percent on Tuesday’s 7.03-euro settlement.
By 16.30 GMT, the contract had recovered slightly to 6.41 euros on healthy turnover of around 15 million units.
The drop sends the contract into unchartered territory, falling well below its previous low of 6.77 euros on December 6 as market traders saw few signs of respite in the EU economy to boost demand for emission permits.
“I still don’t see any bottom to this market,” said one carbon trader, who said any positive sentiment from this weekend’s landmark U.N. climate summit in Durban was purely psychological as it brought no increase in demand for permits.
“It’s clear that Durban didn’t help, and Canada’s announcement of its Kyoto Protocol withdrawal tells you what little countries think about international agreements,” he added.
On Tuesday, Canada confirmed it was withdrawing from the 1997 Kyoto Protocol, still the only global agreement to tackle climate change.
Wednesday’s fall in EUAs extended the previous session’s 6.6-percent slide and came as the euro currency broke below $1.30 for the first time since January after the U.S. Federal Reserve warned Europe’s unresolved debt crisis could hurt the giant American economy.
Bond markets appeared to take little confidence from last week’s agreement by EU leaders to strengthen the bloc’s fiscal discipline as Italy sold debt at record euro-era borrowing high of 6.47 percent.
Carbon also faced pressure from the energy complex, which was led downwards by a $3 fall in front-month Brent crude oil prices to $106.15/bbl after the OPEC producer cartel vowed to keep high output levels for six months without outlining steps to cut production should demand wane.
Meanwhile, the December 2011 CER contract trading on ICE Futures Europe fell a further 13 percent on Wednesday to a new low of 3.80 euros as the market absorbed 1.1 million ERU credits issued late last night from Russia.
Front-year CERs had already plumbed new depths on Tuesday, dropping almost 10 percent on expectation that the market would continue to face a deluge of supply.
By Ben Garside
London
I think each COP is important and at least UNFCCC is taking efforts in combating climate change. The author should tell me what is his contribution to reduce carbon footprint.
The point I am making is, we must stop talking and poiting fingers at others, time is to act and act responsibly.
When Kyoto was not ratified, everyone had termed it as futuristic mechanism that may not see light od the day if US doesnt act. And now the reaction is everyone wants second commitment period for more than 5 years which has been agreed at this CoP.
Terming it a life support or Viagra is just to excite readers and nothing else. We must look at collective action and solutions…
@Arvind – I don’t believe your statement that “UNFCCC is taking efforts in combating climate change”. International discussions about climate change have been going on since 1988. So far, they have achieved nothing in terms of meaningful action to address climate change (and absolutely nothing in terms of reducing emissions from burning fossil fuels, leaving fossil fuels in the ground and re-structuring industry to be less polluting).
You appear to be confusing carbon markets with addressing climate change. The two are quite different things. Carbon markets do not address climate change.
The terms “life support” and “Viagra” were both used in reference to carbon markets. It wasn’t me that used the terms to describe the carbon markets. “Viagra” came from Abyd Karmali, global head of carbon markets at Bank of America Merrill Lynch. And “life support” came from Reuters.
Yes, we have the “hope” of a global agreement (as was America’s plan), but what global agreement?
By agreeing to postpone a decision on a binding global agreement till 2020, it seems the parties to the UNFCCC have managed to, on the one hand continue promoting carbon markets as the solution to climate change, and on the other hand, take the “Demand” out of the “Supply & Demand” dynamic that is the basis of the carbon markets… Why would anyone buy a carbon credit before 2020? Why would anyone reduce emissions before 2020, when no one is going to pay for it?
Without binding cuts somewhere (even if they are not enough for the task at hand), there is no market to talk of. If you want to save forests, and do it through carbon markets (as REDD+ proponents say can happen) we need cuts, cuts, and more cuts…
Now we have market infastructure, and REDD projects waiting for market finance, BUT NO CUTS TO FINANCE THE MARKETS.