Nudges, Tax and Trade: Boris Johnson, Rishi Sunak Can Set Their Legacy Today; There’s a Small Chance They’ll Do it (2)

–Push for carbon border adjustments seen in drive for climate justice, higher CO2 prices and steeper tax rates
–Governments can also “nudge” change, not just force it
–Post-Brexit British system can be model for the world

By Mathew Carr

March 2-3, 2021 — LONDON: British Prime Minister Boris Johnson and Chancellor Rishi Sunak have a chance to change U.K. and global history today; there’s only a small chance they’ll take it.

Challenging the people (Conservative Party members) who put you in power takes courage. I’m not sure these gentlemen have enough bravery, but I hope I’m wrong.

What the pandemic has clearly shown is how fragile health, economy and society is.

Some libertarians in Johnson’s party no doubt believe conservatism and freedom equals pretty much doing what you damn well please. This notion goes against what the pandemic has shown us.

No, burning the crap out of fossil fuels does not equal freedom. It’s clearly going to ruin the life of pretty much everyone on earth as the climate changes, bringing floods, droughts, wildfires and disasters.

Helping lead the G7 countries gathering this year and the United Nations climate talks in November, Johnson and Sunak right now have a rare chance to SHOW the world a better way. Unless they do it today however, the chance will have been lost until the UN negotiations, when they will only be able to TELL the world, not SHOW it. That’s a much weaker position.

Changing the tax system to focus on adjusting bad behavior, including the burning of fossil fuels, makes a lot of sense. Polluters need to start paying for the damage they cause.

The U.K. is already well ahead on this front, with carbon prices set to be above those even in the European Union, which the country has just left. See this:
https://carrzee.org/2021/02/24/five-years-later-and-after-the-fact-brexits-still-set-to-roil-europes-carbon-market/

It and other EU nations made more than 57 billion euros selling EU allowances until the middle of last year. After the U.K. introduced a carbon floor support in 2013, it made even more. That floor helped fill a gap in the country’s budget after the global financial crisis more than a decade ago, so there’s a precedent. The pandemic has left a huge gap and the money from the floor as well as the country’s new U.K. market is set to bring in the cash.

The higher the price, the bigger the revenue. Here is an earlier scenario from Vivid Economics setting out the range of possible prices:

https://www.theccc.org.uk/wp-content/uploads/2019/08/Vivid-Economics-The-Future-of-Carbon-Pricing-in-the-UK.pdf

A U.S. professor has been advocating for Britain to showcase the fee and dividend model because U.S. lawmakers are too beholden to oil, natural gas and coal:

http://www.columbia.edu/~jeh1/mailings/2021/20210205_DearPrimeMinisterScience.pdf

The freedom delivered by Brexit allows Sunak to adopt an aggressive, post free-market capitalism model and make a few more important tweaks during the next eight months, before the climate talks in Glasgow. Here’s a little roadmap:

  1. Flag to U.K. voters that the country’s poor will be protected from cost increases that hit them because of higher carbon prices. The carbon “fee and dividend” system can become a global standard. Britain is already doing this to some extent because it has energy regulations that protect those in “fuel poverty”. In a related move, fossil-fuel subsidies can be dropped, saving taxapayer money (Fossil-fuel subsidies are effectively negative carbon prices.)
  2. Say to airlines landing or taking off in Britain and their customers that the price offered online MUST INCLUDE the cost of offsetting the carbon dioxide caused by a flight, starting in July this year. (Britain has already flagged it plans to do this and this timing will allow the nation to capture the post-pandemic holiday exodus). This forces buyers to think, requires them to uncheck a box saying they are unwilling to pay the offset costs. Importantly, offsetting should start as a “nudge” rather than a mandatory requirement. Rich people should be discouraged from unchecking that box. Sunak could also announce bringing this mandatory offset offering to the petrol pump as soon as possible. Only the poorest in society should tick the box on the pump that allows them to wiggle out of the environmental cost of their fuel. Such a system would help companies seeking to hit net-zero emissions targets.
  3. Plan to adjust the tax system so that it’s more sustainable as soon as possible, meshing it with the carbon pricing and green-trade rules. The widening gap between rich and poor will be addressed at some point. Should the Conservative party undertake this difficult task, it’s likely to take away the political opportunities of the opposition party, Labour. The government is already planning to include climate risk disclosure into accounting rules as mandatory starting from 2023, so tweaking capitalism a little more to make it target goals other than profit would be the right thing to do right now.
UN sustainable development goals: https://www.un-page.org/page-and-sustainable-development-goals

This three-point plan may not be as unlikely as it seems. The U.K. is already seeking to position itself as a global climate and tax leader, including via its G7 role.

A person familiar with the government’s situation said this:

Climate change is a key priority of the British government’s G7 Presidency, including a push for “a lasting green recovery.”

It’s much easier said than done. G7 leaders published a statement Feb. 19 outlining climate priorities including for a just transition to net zero, including tax reform. The G20 and China is also in the frame.

Emerging nations are worried rich-country climate policy might limit their exports.

Britain is seeking to deal with that concern. The U.K. will continue to work with developed nations on how to best reduce emissions, including industrial production gases, in a way that does not disadvantage developing countries, the person said.

One way of ensuring the U.K.’s climate policy doesn’t lead to increased emissions elsewhere are Carbon Border Adjustment Mechanisms, one of which is planned by the EU by 2023. This could further increase government revenue.

Energy intensive goods would face a “price adjustment” if they are coming from countries with lax climate policy.

See: Interim report of the Net Zero Review for a range of approaches could potentially protect green industries.

“Carbon border adjustments should be treated as a part of an international, multilateral effort which is the best way to prevent carbon leakage,” the person said.

As the Business Secretary said in the U.K. parliament on Dec. 16 (while Energy Minister): “…if we impose a tax unilaterally on carbon-emitting products coming into this country, we may well be disadvantaging our own consumers if others around the world are not placing such a tax. The Government feels that multilateral co-operation in this regard is by far the best way to prevent carbon leakage.

Further investigation is needed in order to understand how such a measure would be implemented, whether it would comply with World Trade Organisation rules, and how effective it would be, the person said.

Some Conservatives are calling for immediate tax rises, so there’s hope.

See this: Budget 2021: https://news.sky.com/story/budget-2021-lord-hague-throws-his-weight-behind-calls-for-rishi-sunak-to-raise-taxes-to-deal-with-covid-spend-12233373

On the other hand some are arguing “now is not the time,” for tax increases, blaming the pandemic.

This seems wrong headed. The pandemic provides a perfect reason (not an excuse) for clever tax rises, especially where they help show the world how to save the climate.

NOTE: Sunak is set to launch world first green bond today:
https://www.ftadviser.com/investments/2021/03/01/green-bond-growth-welcomed-after-sunak-launches-world-first/

(Updates with carbon revenue context, floor, professor, Vivid chart, updates carbon revenue)

Ten Republican Senators Will be Convinced on Ambitious U.S. Climate Action as Global Trade Rules Rewritten (1)

–G7 outcome highlights chance of climate deal, multilateralism, new system of planet-friendly trade via G20 by June

By Mathew Carr

Feb. 18-20, 2021 — LONDON:

OPINION: The world now needs carbon prices of about $100 a ton in 2030 to spur sufficient climate action to meet the 1.5C temperature increase goal in the Paris climate deal.

That is about double the level targeted just a couple of years ago by the Obama administration. The higher price is required because global emissions are still very high, even though nations have become more ambitious, with many adopting mid-century net-zero targets.

The required price could be even higher. Lawmakers realise they need to embrace widespread climate measures across the economy, so carbon prices now need only do part of the emissions-cutting work, and clean technology has advanced apace.

Still, this paper by prominent economists Nicholas Stern and Joseph Stiglitz, makes a case that the U.S. needs to aggressively lift its estimate of the social cost of carbon, which will guide policies across the board and corporate assumptions for carbon prices in business plans.
See: https://www.project-syndicate.org/commentary/biden-administration-climate-change-higher-carbon-price-by-nicholas-stern-and-joseph-e-stiglitz-2021-02

Some commentators are skeptical there’s enough political will in the U.S. to tackle climate action cost effectively and install such levels.

Robert Stavins, the A. J. Meyer Professor of Energy and Economic Development at the Harvard Kennedy School, is one who was last month pessimistic about prospects for getting the required 60 senators: https://www.lawfareblog.com/biden-administration-and-international-climate-change-policy-and-action

I’m heartened by the seven Republican senators who voted to impeach former president Donald Trump. It shows the Republicans are far from a lost cause.

Three more level heads than in the impeachment vote seems very possible indeed.

I reckon Biden-Harris can convince the ten because the U.S. now has a chance to catch up with, and even overtake, Europe by setting a logical policy framework for cost-effective emission cuts.

Europe’s climate policies have proved fairly effective, but they are still way too complicated and far from cost optimal. That stems from the nature of EU policymaking, nationalistic geopolitics and compartmentalized public debate.

The prospect of moving ahead of Europe will prove too tempting for at least 10 Republicans.

The prospect of the U.S. biting at its heels will make the EU even more ambitious.

The U.S. senators will be convinced not because they are becoming more progressive or leftist, but because U.S. companies don’t want to face a tax on Europe’s borders as they seek to boost exports post pandemic. Trillions are going to be spent on the climate transition during the next 10 years — that’s a considerable carrot.

The flipside stick is the EU plan for a so-called carbon border adjustment mechanism by 2023 on nations without climate policy that’s ambitious enough.

The G7 leaders meeting Feb. 19 — the day of the U.S.’s reentry into the Paris agreement — acknowledged the importance of a global trade regime that serves the planet.

“We will work together and with others to make 2021 a turning point for multilateralism and to shape a recovery that promotes the health and prosperity of our people and planet.”

Here is another key G7 passage:
We will: champion open economies and societies; promote global economic resilience; harness the digital economy with data free flow with trust; cooperate on a modernised, freer and fairer rules-based multilateral trading system that reflects our values and delivers balanced growth with a reformed World Trade Organisation at its centre; and, strive to reach a consensus-based solution on international taxation by mid-2021 within the framework of the OECD. With the aim of supporting a fair and mutually beneficial global economic system for all people, we will engage with others, especially G20 countries including large economies such as China.

So higher carbon prices could include taxes or markets.

The mention of China is crucial because unless the world’s biggest emitter and most populous nation is drawn into the climate and trade solution it’s difficult to see how the Paris limits can be met.

U.S., including climate envoy John Kerry, has engaged with India and Brazil in recent days.

Here’s the Google Translation of the following embedded tweet from the Brazil Foreign Affairs Minister: Min. Ricardo Salles and I had a conference call today with Secretary John Kerry, US Special Representative for Climate Change. Dialogue and cooperation on environment and climate will be another aggregating element in the Brazil-USA partnership that we continue to build.

Hit translate on Twitter to translate

Kerry is cleverly not just cajoling big emerging countries to join the climate fight but touting the red-hot nature of the investment opportunities:

U.S. President Joe Biden and India Prime Minister Narendra Modi in a call earlier this month said they’d renewed a partnership on climate change.

Because a G20 deal on trade and climate is in the frame of possible outcomes this year, self interest will prevail in the U.S. Senate.

If it doesn’t — if the U.S. fails to act ambitiously now (in the next 2 years), it’ll miss a rare chance and potentially be defeated by Europe and China (and others) in what’s firmly become a global climate-transition race.

Photo by Harun Tan on Pexels.com

See global climate policy begins to align: https://carrzee.org/2020/12/14/britain-touts-world-first-net-zero-carbon-market-as-it-leaves-eu-and-seeks-trade-deal-with-australia/

(Updated Saturday with G7, Tweets, context, links)

NOTES: The Group of Seven (G7) is an intergovernmental organization consisting of Canada, France, Germany, Italy, Japan, the United Kingdom and the U.S. The heads of government of the member states, as well as the representatives of the EU, meet at G7 gatherings/video conferences.

G7 text: https://www.gov.uk/government/news/g7-leaders-statement-19-february-2021

India red hot: https://scroll.in/latest/986701/india-a-red-hot-investment-opportunity-for-its-clean-energy-shift-us-climate-envoy-john-kerry

Modi-Biden call: https://scroll.in/latest/986344/pm-modi-joe-biden-say-commitment-to-democratic-values-bedrock-of-us-india-ties

The Era of Climate Brinkmanship is Ending as Carbon-Free Cashflow Rises (2)

— The climate transition is set to be better managed
— Climate activist Greta Thunberg will be pleased

By Mathew Carr

OPINION, Feb. 9-13, 2021 — LONDON: Not before time, the right things are becoming desirable in the previously cut-throat world of financial markets.

The push-pull for climate-friendly products has become so strong, pension funds are starting to ignore profits made from burning coal, crude oil or even natural gas.

Instead of black gold, examples of emissions-cutting market innovation are gushing thick and fast.

Green is the new black in the commodity world.

A few days ago research and rating provider S&P Global joined dairy group Danone to become one of the first companies to introduce a carbon-adjusted-earnings-per-share metric into its financial reporting.

The metric – based on a theoretical cost per share of the company’s emitted carbon dioxide subtracted from regular earnings per share – provides transparency into how far down the climate transition curve a company is.

The world’s biggest investor Blackrock, belatedly on board with the climate transition itself, said a couple of weeks ago that the global coronavirus pandemic “presented such an existential crisis – such a stark reminder of our fragility – that it has driven us to confront the global threat of climate change more forcefully and to consider how, like the pandemic, it will alter our lives.”

Carbon-adjusted EPS is another way of progressing toward net-zero targets, favored by more than 2,000 businesses, cities, states, universities and investors around the world, according to UN data. ESG standards and climate disclosure is increasingly becoming mandatory rather than optional.

So, a compelling stage has been set, because these measures imply demand for carbon allowances and renewable-energy credits will rise, as corporates and governments seek to hit targets in 2025, 2030, 2035, 2040, 2045 and 2050.

Photo by Zukiman Mohamad on Pexels.com

Stockmarket darling Tesla made $1.6 billion from selling regulatory carbon credits it received last year, far outweighing its net income of $721 million — meaning it would have otherwise posted a net loss, according to CNN.

A carbon credit boom isn’t quite set in stone. Remember, they were going to be huge 10 years ago, but politics got in the way and demand never showed up.

Now though, things seem different.

Occidental Petroleum’s sale of a shipment of carbon-neutral crude was another recent surprise. The shipment from the Permian to India was apparently made carbon neutral via green emission-reduction projects in both India and Thailand. I’m seeking confirmation and more information.
https://carrzee.org/2021/01/30/tech-led-oil-shift-first-net-zero-crude-to-india-shows-demand-surprise/

Trading in the voluntary carbon market could merge with compliance buying and selling under the Paris climate deal, according to some enthusiasts. That climate deal is meant to be biting from this year, but the pandemic has also slowed the number of possible negotiation meetings.

Further, not all emerging nations are on board with a surging voluntary carbon market. They prefer a UN system. Rich countries and companies say the failure of politicians to set carbon trading rules is a key reason why the climate crisis is now so acute.

Giving the market a bigger size won’t necessarily be easy, the Taskforce on Scaling Voluntary Carbon Markets concluded on Jan. 27. It needs to be turning over about $100 billion a year instead of $320 million, it said. See this: https://carrzee.org/2021/01/28/net-zero-companies-from-google-to-shell-see-a-way-forward-and-want-it/

If demand does show up this time, it could stir prices a lot. EU carbon allowances have more than doubled since the start of the pandemic to about 38 euros a ton. Voluntary carbon allowances are mostly more like 6 euros.

Perhaps soon, commodity indexes such as Bloomberg’s BCOM will include EU allowances or voluntary emission credits for the first time. At the moment, the energy element of the index is made up largely of fossil fuels, even though carbon has reached about half the cost of Europe’s wholesale electricity price. And electricity is where it’s at.

The past few years has seen a lot of climate brinkmanship. Mr Donald Trump expanded oil and natural gas, China and India are planning coal-power expansion, Brazil’s Amazon is burning at a rapid pace.

So the shift to greener markets is sorely needed.

Carbon credits could for instance reward striking Indian farmers should they agree to pivot toward more climate-friendly agriculture. They could make the Amazon worth more alive than dead.

See this: https://www.spglobal.com/platts/en/market-insights/latest-news/coal/021221-interview-carbon-offsets-demand-to-grow-despite-covid-setback-verra-ceo

To be sure, the pandemic has placed the global airline industry in severe doldrums, drying up a key area of previously expected offset demand.

Demand Recovers Scenario

Assuming demand does recover, one useful thing that’s happened over the past five years is testing of a cool mechanism for efficiently buying and selling emission credits.

The Pilot Auction Facility for Methane and Climate Change Mitigation handled by the World Bank employs auctions to maximize the use of public resources. Private corporations could use the same system.

Emissions-project investors bid for tradable put options that give the right to sell emission reduction credits, in this case to the World-Bank overseen fund. The projects willing to sell for the lowest price, win the options.

That injects price tension into the mix, reducing the chance of overblown profits for sellers and helping buying companies push up their adjusted carbon earnings per share.

A fund buying like this for corporates would lower the cost of meeting their net-zero targets. All this assumes emission-credit markets are well managed and not oversupplied. It’s going to be tough to make that happen in the next few weeks or months.

The World-Bank-overseen facility was created five years ago to keep projects running because carbon-credit prices plunged amid the flagging demand I mentioned earlier. Rich countries put in the cash.

The first sales result back in 2015 showed the program was “extremely efficient and scalable,” providing sorely needed finance to projects and making capturing methane worth the cost, the bank said at the time. Methane is a potent greenhouse gas with a global-warming potential 25 times that of carbon dioxide.

I wrote this in 2015: https://www.bloomberg.com/news/articles/2015-07-17/world-bank-reverse-sale-spurs-carbon-credit-price-5-times-market?sref=fcMjhrdB

Website: https://www.pilotauctionfacility.org/

The facility hosted three successful auctions between 2015 and 2017, allocating nearly $54 million in climate finance, with the potential to abate about 21 million metric tons of CO2 equivalent, according to its website. The Pilot Auction Facility also addressed nitrous oxide through 2020. The volume is about a day and one half of U.S. energy emissions. It’s a start, at least.

Such structures should prevent profiteering in the next batch of carbon markets, something the first batch was criticised for.

They could also boost transparency and increase the incentive to install strict oversight of the green projects, including in countries with a history of corruption. Auction rules can insist on high standards and stipulate which projects can buy the put options.

That means countries would want to make sure their projects are attractive and so they would make sure they are managed properly. Projects looking to sell into the fund (buy the put options) would also need to make sure they meet standards, or they won’t be able to use this as a revenue-generating route.

No one wants to be seen buying bad credits, whether they’re bad because of their environmental credibility, bad because of the behavior of the people running the project, or bad because of the national oversight.

See this: https://carrzee.org/2021/02/09/eu-carbon-price-needs-to-triple-because-climate-disclosure-governance-measures-havent-worked-aviva/

Tate Britain: Kumari Singh Burman’s ice cream van — Diwali inspired art

(Corrects to capitalize Indian, adds link, adds S&P Link, adds details Saturday)

The U.S. Calls Out (Its Own?) Climate Bullshit

By Mathew Carr

NEWS SUMMARY

Jan. 29, 2021 — LONDON: Special U.S. climate envoy John Kerry is on a roll.

Not only is he invoking “humility” in his country’s newly invigorated climate fight, he’s calling out former President Donald Trump’s stance as “reckless.”

Now, he’s gone even further.

“There’s no room for BS anymore — from anyone in the debate,” he told Amanda Little (I think oyster-mushroom steaks are great, fame), in a story published by Bloomberg News.

Call ME reckless, but I’m taking BS as bullshit, and I’m also taking it as a reference to Mr Trump (although there’s plenty of climate bullshit about). Forgive me if I’m wrong.

I’ll let you read the full article below, but here are a couple of other choice Kerry comments (emphasis added) from the report:

JK: Obviously I’ve been a longtime advocate of putting a price on carbon. That’s what Lindsey Graham and I were trying to do in the Senate in 2009 and 2010. I credit the activists who have pushed to say any pricing would have to be progressive so it doesn’t dump the costs on low-income workers and families. I also credit the voices from the private sector who are elevating climate as a priority in boardrooms, in general.

AL:  Is carbon pricing politically feasible?

JK:  I can’t tell you today what’s ultimately politically feasible. The debate has shifted before, and I think it may change this year in the right direction — or going forward from Glasgow [site of Nov. 1 United Nations Climate Change Conference]. There are Republicans, including former Secretary of States George Shultz and Jim Baker, who support carbon pricing, but I haven’t seen that translate to Congress yet.

AL:  How hard will it be to repair the diplomatic damage on climate?

JK:  Trump led an assault on science without understanding that when you mess with global ecosystems, you’re messing with forces that literally have the ability to do what nuclear weapons and cyber warfare can do, which is destroy nations. I’m approaching our allies with humility, as is President Biden, because we’re embarrassed and we’re angry about what happened these last four years.

Here’s the complete Bloomberg story (subscription may be required if you’ve used up your free article allocation):

https://www.bloomberg.com/opinion/articles/2021-01-28/kerry-aoc-and-bernie-find-a-new-path-in-climate-change-fight?sref=fcMjhrdB

Photo by Pixabay on Pexels.com

Seven Carbon Markets Seen Linking and Covering Much of the World’s Emissions (3)

By Mathew Carr

Dec. 15, 2020 — LONDON: Seven carbon markets, existing and possible, could link and cover most of the world’s emissions, according to a key China academic.

China, the U.S., the EU, Russia, South Africa, Korea and Southeast Asia could link carbon markets, providing an incentive to reduce climate-damaging emissions, said Xiliang Zhang of the Institute of Energy, Environment & Economy at Tsinghua University.

The tokenisation of commodities and products, blockchain may help spur linking of carbon markets, Zhang told the online European Climate Summit.

Speakers on the summit panel discussing carbon-market linking expressed doubt linkages were likely anytime soon. Australia and the EU had a failed attempt at linking. A link between the EU and Switzerland took years. China’s planned domestic carbon market is years behind schedule and the U.S. does not even have plans for a national market.

The U.K. is leaving the EU carbon market at the end of this month, shrinking it and probably reducing trading liquidity.

See this:
https://carrzee.org/2020/12/14/britain-touts-world-first-net-zero-carbon-market-as-it-leaves-eu-and-seeks-trade-deal-with-australia/

The U.K. may link with Europe’s program or it might set out its own global cooperation with other countries, after Brexit. Carbon market linkages don’t need to be struck between nations in close geographical proximity, because trading is done electronically. However rules and the ambition of emission-reduction targets would probably need to be similar.

“I personally think that it would be so much easier for the U.K. to join the EU emissions trading system, which they know and which they have institutionalised than any other ETS,” said Silke Karcher, head of division, EU Climate and Energy Policy, European Climate Initiative, carbon markets, at the German Ministry for the Environment. “I find it hard to imagine they would try anything else, but who knows?”

Slides from presentation

For summit website:
https://europeanclimatesummit.com/

(Updates with charts, with context, with German official Tuesday afternoon, more to come)

Big-Beast Climate Fight, or is it?: China’s Criticism of U.S. to Ease as Trump-Term Ends (3)

By Mathew Carr

ANALYSIS – feedback welcomed (see the bottom).

Nov. 14-19, 2020 — LONDON — China’s anger toward the U.S. on slow climate action is set to abate.

The most populous nation’s recognition of Joe Biden as the probable winner of the U.S. presidential election could well spur much closer cooperation between the world’s two biggest superpowers on climate action and trade.

Their cooperation was key when the world agreed the Paris climate deal in 2015, an agreement that’s so far a weak and unfinished framework, but the only one we have.

Nothing is guaranteed, but there’s at least a decent chance of better climate relations between climate’s two biggest beasts that made up 44% of the world’s energy emissions last year, according to BP Plc data.

“Global threats require global responses,” China President Xi said Nov. 12, reported Xinhua.

China hasn’t given up on working with the U.S. to fight climate change, even after the Trump administration exited Paris, according to China’s former top climate envoy, Bloomberg News reports. Cooperation between the world’s two biggest greenhouse gas emitters is vital to stop global temperatures rising to dangerous levels, according to Xie Zhenhua.

Read more at: https://www.bloombergquint.com/business/china-hasn-t-given-up-on-u-s-in-fight-against-climate-change

When asked about global cooperation on climate, the U.S. State Department referred this week to comments earlier this month by U.S. Secretary of State under President Donald Trump, Mike Pompeo:

“We will continue to work with our global partners to enhance resilience to the impacts of climate change and prepare for and respond to natural disasters. Just as we have in the past, the United States will continue to research, innovate, and grow our economy while reducing emissions and extending a helping hand to our friends and partners around the globe.”

Call me hopeful, does that mean even Trump is now in favor of at least some global co-operation on climate? (More from the Department of State spokesperson below.)

Critically Insufficient – the U.S. Situation:

https://climateactiontracker.org/countries/usa/

On Sunday, China and 14 other countries formed the world’s largest trading bloc, seen as boosting the region’s influence over global trade.

A best-case scenario on climate would see China and U.S. agree on energy-efficiency standards for a range of business and consumer products and potentially some sort of linking between potential carbon-pricing systems and trade rules related to those.

China is introducing a national carbon cap and trade, and such a move is seen as a chance in the U.S., where both sides of the political divide favor free-enterprise solutions over taxes.

Selling the right to pollute (instead of giving it away for free) could generate billions of dollars for China and the U.S. (indeed all countries) as they seek to quell social unrest and help their poor recover from the pandemic.

President Trump has also criticised China, of course, on its world-beating greenhouse-gas-output (yet it has the excuse of a much bigger population). Environmentalists have slammed its continued plans for new coal-fired power stations.

It’s also a plausible scenario that relations between China and the U.S. sour as the world struggles to link global trade and climate rules under the Paris climate deal in November 2021.

China, now the biggest emitter, called out the U.S., the nation most responsible for climate change based on historical emissions, just a few weeks before the U.S. election.

China’s U.K. embassy published documents Oct. 21, after the U.S. criticised it the previous month (see text and links below).

A lot’s been said on what Biden wants to do/will be able to do. What does China want for the U.S.?

Here are 10 key criticisms by China of the U.S. under Trump on climate, ranked by their punchiness (I’m keen for more public debate; I’m not necessarily endorsing these criticisms, nor those in the U.S. State Dept. document linked below):

The U.S. Department of State spokesperson said earlier this week by email:

“This is China’s latest effort to distract from its abysmal emissions record and its irresponsible environmental record around the world.  Over the last 15 years, U.S. emissions have decreased while China’s have continued to increase.  China’s energy-related greenhouse gas emissions increased over 80% between 2005-2019, while U.S. energy-related emissions have decreased more than 15%.

“In 2019 alone, China’s energy-related greenhouse gas emissions increased over 3%, while the United States’ decreased by 2%. China’s energy-related greenhouse gas emissions are already twice those of the United States and almost a third of all emissions globally and rising.

“China has been the world’s largest annual greenhouse gas emitter since 2006. China claims status as a “developing country” to avoid shouldering its fair share of responsibility for reducing GHG emissions—even though its per capita CO2 emissions have reached the level of many high-income countries.

“China’s increasing emissions and exports of poor-performing and low-efficiency technologies counteract the progress of many other countries around the world in reducing global emissions. Chinese banks fund 72% of all coal plants being built outside of China through its One Belt, One Road Initiative. China’s COVID-19 stimulus invests three times the funds into fossil fuels than it does into low-carbon energy.”

The Situation in China: Highly Insufficient:

https://climateactiontracker.org/countries/china/

****************

Here are China’s statements on the U.S. from last month (China Embassy in UK, website) —in case you missed them — I’ve added emphasis to ease the read:

*****************
http://www.chinese-embassy.org.uk/eng/PressandMedia/Spokepersons/t1825539.htm
Oct. 21
Ministry of Foreign Affairs:

As the most advanced developed country in the world today, the United States has a poor track record in the environmental field. It has not only backpedaled on its domestic environmental protection policies but also seriously undermined the fairness, efficiency and effectiveness of global environmental governance. It is widely viewed as a consensus-breaker and a troublemaker. With regard to what it has done to the environment, the US has yet to justify itself to its own people and to other people in the world.

  1. On Greenhouse Gas Emissions. 
  2. Historically, the US has been the world’s largest emitter with the most greenhouse gas emissions in cumulative terms. Between 1751 and 2010, emissions from US energy and industrial sectors accounted for 27.9% of the global total. Cumulative emissions from the US are about three times that of China. Today, the US is the second largest emitter in the world with about 15% of global carbon emissions. In per capita terms, the US has long been among the biggest carbon emitter, registering 14.6 tons of per capita CO2 emissions from fossil fuel in 2017, 3.3 times the global average and more than twice that of China. The US also has the largest cumulative aviation emissions in the world.

2. On Climate Change.

Major retrogression on climate change. The Trump administration has repeatedly called global warming a hoax, challenging the international consensus on climate change. The Trump administration scrapped the Obama administration’s Clean Power Plan, kept relaxing environmental restrictions on the development of the fossil fuel industry, and rescinded climate-related policy measures of the executive branch. According to The New York Times, since the Trump administration took office, nearly 70 major environmental policies have been reversed, revoked or otherwise rolled back and more than 30 additional rollbacks are still in progress. This is expected to greatly increase greenhouse gas emissions and the death toll resulted from air pollution. US environmental protection agencies such as the US Natural Resources Defense Council have filed a number of lawsuits against the Trump administration over lowering environmental standards and causing related environmental issues. Due to the negative stance of the US, the leaders’ declarations of the G20 summits failed to reach consensus on climate change for three consecutive years starting from 2017, and each time the “19+1” approach was adopted as a compromise.

Withdrawal from the Paris Agreement. On 1 June 2017, the Trump administration announced that the US would withdraw from the Paris Agreement and cease implementing its Nationally Determined Contributions. On 4 November 2019, the US officially launched the withdrawal procedure. Pursuant to the withdrawal clause, the US will formally withdraw from the Agreement on 4 November 2020, making it the only party to withdraw thus far. The US failure to ratify the Kyoto Protocol and its withdrawal from the Paris Agreement have seriously undermined global climate governance and cooperation.

Insufficient implementation of climate action commitments. After the ratification of the United Nations Framework Convention on Climate Change(UNFCCC) in October 1992, US emissions continued to grow rapidly on an upward trajectory that lasted for 15 years. In 2010, the US pledged to cut its economy-wide carbon emissions by 17% from 2005 levels by 2020. Nevertheless, as of the end of 2018, the US only managed to bring its greenhouse gas emissions 10.2% lower than its 2005 figure … In 2017, the Trump administration reneged on the US commitment by announcing its refusal to meet its climate action goal of 26-28% emissions reduction below 2005 levels by 2025. For three consecutive years since 2018, the US has refused to fulfill its obligations of submitting Biennial Reports and National Communication.

Failure to honor funding commitments. In the history of the Global Environment Fund (GEF), the US holds the largest share of contributions arrears, which stand at US$111 million, or 95.7% of the total arrears. Since taking office, the Trump administration has announced a suspension of US funding to the Green Climate Fund (GCF), and refused to provide the outstanding US$2 billion committed by the Obama administration. The US has repeatedly blocked projects for developing countries citing unfounded reasons such as human trafficking and human rights violations, thus seriously undermining the developing countries’ right to use the funding. Since 2018, the US has stacked up over €13.547 million in deferred contributions to the UNFCCC.

3. On Biodiversity. The US has not ratified the Convention on Biological Diversity. Nor has it acceded to the three important protocols on biodiversity, namely the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from Their Utilization, the Cartagena Protocol on Biosafety, and the Nagoya-Kuala Lumpur Supplementary Protocol on Liability and Redress. It has stayed completely outside the global biodiversity conservation cooperation system.

4. On Protecting Endangered Species of Wild Fauna and Flora. On 12 August 2019, the US government formally approved the revision of key provisions in the Endangered Species Act to remove legal obstacles for commercial activities such as mining and oil and gas exploration in wildlife habitats, thus reducing protection of endangered species. The US has the world’s largest captive tiger population, but regulation is lacking in this area. While the US is the primary force pushing behind the scene for the elevation of eight pangolin species from Appendix II to Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), only Temminck’s ground pangolin (manis temminckii) has been listed among endangered species in the US.

5. On Wildlife Trafficking. The US is one of the largest destinations of wild animals trafficking and one of the major consumers of their products. According to the World Wildlife Crime Report released by the United Nations Office on Drugs and Crime (UNODC), North America accounted for 38.5% of the shared data on world wildlife confiscation from 2005 to 2018. The US is the largest trafficking destination country for aquatic turtles, tortoises, lions and their products, and sea cucumbers listed in CITES appendices. The US is also a major shark fishing country and sells a large number of products such as shark oil, seriously damaging shark resources. In recent years, the US has fished and exported a large number of sharks. In 2018 alone, the US exported nearly 3 million kilograms of shark meat and shark fins. While calling on others to join in the global fight against illegal wildlife trade, the US has evaded the question of its importing of live African elephant (loxodonta africana) and MacDonald’s weakfish (totoaba macdonaldi)listed in CITES Appendix I, and its involvement in ivory trade.

6. On Waste Management. As the world’s largest exporter of solid waste and a major consumer of plastic in per capita terms, the US has not ratified theBasel Convention on the Control of Transboundary Movement of Hazardous Wastes and Their Disposal, impeding the global management and control of plastic waste and frustrating the adoption of relevant amendments aiming to strengthen the regulations. The US has long taken developing countries whose handling capacity are still inadequate as the final dumping site of plastic waste, disregarding the environmental interests and people’s health of these developing countries. According to a report released by the NGO Basel Action Network (BAN), US companies are still illegally exporting hazardous electronic waste to developing countries in 2020. Since July 2017 when China began to include plastic waste and other imported hazardous wastes into its Catalog of Prohibited Imports of Solid Waste, the US has attacked China’s legitimate policy of not importing those wastes, and even asked China to revoke the ban for the single purpose of finding a way out for their own wastes.

7. On Chemical Management. The US has not yet ratified three major international chemical conventions, namely, the Basel Convention on the Control of Transboundary Movement of Hazardous Wastes and Their Disposal, the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, and the Stockholm Convention on Persistent Organic Pollutants, and thus has long stayed free from restrictions and controls prescribed in those conventions. The United Nations Environment Program’s Global Mercury Assessment shows that more than 50%-60% of mercury emissions are re-emissions from the past. Among them, emissions before the 19th Century were far greater than those since the 20th Century, mainly caused by gold or silver mining in the Americas.

8. On Combating Desertification. The Global Land Outlook shows that irrigated farmlands in western US and pastures in the central and southern US are facing pressures of degradation. According to a report by the United Nations Intergovernmental Panel on Climate Change (IPCC), bush encroachment has taken place in the grasslands in western US and is spreading at a faster speed. The outstanding contributions of the US to the United Nations Convention to Combat Desertification from 1999 to 2019 have reached a total of more than €3.058 million.

9. On Forest Management. From 1989 to 2018, a total of 2,210,546 wildfires broke out in the US, burning 68,059,232 hectares of land, registering a 0.6% annual increase of the number of fires and a 5.7% annual increase of area burned. In the past 30 years, the total number of wildfires in the US is 11.5 times that of China, and the area burned is 10.9 times. By the time of the release of this Fact Sheet, wildfires in California have been burning for nearly two months, spreading over 16,000 square kilometers. As a result, air pollution went off the charts multiple times, and carbon emissions are beyond imagination. Statistics show that just this year, more than 8,200 wildfires have occurred in California, claiming more than 30 lives and destroying over 8,400 buildings.

10. On Illegal Logging. Per capita timber consumption in the US in 2018 was 1.73 cubic meters, which was nearly three times of the world’s average of 0.61, and four times that of China. Illegal logging and deforestation are rampant in the US. Statistics from the US Forest Service show that illegal logging accounts for 10% of timber produced every year in the US, causing huge economic losses to forest owners and state-owned forests, and severe damage to the local environment. At the same time, the US imports a large amount of timber from unknown sources, which has emboldened illegal logging.

11. On Water Pollution. In the US, water resources are poorly managed, water conservancy infrastructure is in disrepair, and floods and droughts are frequent. Water sources are polluted and the supply of clean drinking water is insufficient. The water ecological environment is deteriorating, as evidenced by the annual outbreaks of large-scale cyanobacterial and water blooms and the long-term pollution of underground aquifer.

12. On Methane Leaks. Shale gas mining in the US has created a large quantity of methane gas leakage, which is a huge environmental hazard. According to the assessment report of IPCC, methane is 25 times stronger than carbon dioxide as a heat-trapping gas. In August 2020, the US Environmental Protection Agency made substantial amendments to its regulations on methane leak management, further loosening requirements on oil and gas mining companies. This has caused strong opposition from many American pro-environment institutions.

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Here is another:
http://www.chinese-embassy.org.uk/eng/PressandMedia/Spokepersons/t1825542.htm

Ministry of Foreign Affairs News
Oct. 21, 2020

Humankind has only one earth, and humans and nature are a shared community. It is the common responsibility of all countries to preserve ecological environment and promote sustainable development. Only by building and implementing a fair, equitable, and win-win global environmental governance mechanism can we achieve sustainable development in a comprehensive, complete, efficient and economical way, and attain the future we want. To this end, the international community has worked to formulate a series of multilateral environmental treaties, covering various aspects including climate change, biodiversity conservation, ozone layer protection, and chemical pollution prevention and control. These treaties provide a basic legal framework and guidance for international cooperation. As the most advanced developed country, the US has a poor track record in its engagement and compliance with multilateral environmental treaties, which has greatly damaged the fairness, efficiency, and effectiveness of global environmental governance.

I. Withdrawal from the Paris Agreement on Climate Change

The United Nations Framework Convention on Climate Change (UNFCCC) has been in effect for more than 20 years. Thanks to the joint efforts of all parties, the global response to climate change has made good progress.

In order to strengthen the implementation of the Convention, from the end of 2011 to 2015, countries including the US, through difficult negotiations, finally reached a comprehensive, balanced, strong and binding Paris Agreement in Paris, France in December 2015. This marked a new milestone of global climate governance. The Agreement embodies the greatest international consensus on strengthening the efforts to jointly address climate challenges, enriches and develops the international climate governance system based on the UNFCCC, and points out the direction for post-2020 global cooperation. It is a shining pearl among the major multilateral achievements in recent years. In November 2016, less than one year after the Agreement was adopted, and just half a year after it was opened for signature, the requirements of the clause of entry into force were met, and the Agreement came into effect.

The US is a party to the Convention and played an important part in the conclusion of the Paris Agreement and its entry into force. From 2014 to 2016, China and the US issued three joint statements on climate change. The political consensus embodied in the above statements laid an important foundation for the adoption of the Agreement and its entry into force. The Agreement was approved by President Obama shortly after its adoption. On 3 September, the eve of the 2016 G20 Hangzhou Summit, the presidents of China and the US jointly deposited instruments of ratification to the Secretary-General of the United Nations, which injected impetus into the rapid entry into force of the Agreement.

Since taking office, Trump administration has reversed the climate- and environment-friendly policies of the Obama administration. It has run in reverse gear on environmental issues, resulting in a serious regression in the US position on climate change.

Before his inauguration, Trump made repeated skeptical comments on climate science, calling global warming a hoax, frequently creating a political atmosphere of climate change skepticism, and openly challenging the international consensus on climate change.

Trump administration has constantly loosened the environmental constraints related to the development of fossil fuel industries, involving areas such as air pollution, oil and gas exploration and exploitation, protection of animals, plants and the environment, and prevention and control of water pollution.

On 28 March 2017, Trump administration signed the executive order on “Promoting Energy Independence and Economic Growth”, proposing that in order to promote US energy independence and facilitate economic and employment growth, it should comprehensively evaluate, revise and rescind climate change-related measures in place.

According to the statistics released by the New York Times in July 2020, since Trump administration took office, around 70 major environmental policies have been rescinded directly or indirectly, with 30 more reversals in process.

Trump administration regarded the Paris Agreement as a thorn in his flesh, repeatedly blaming it for placing the US businesses at a disadvantage, and clamoring for withdrawal from the Agreement to clear the thorn.

On 1 June 2017, Trump administration announced that the US would withdraw from the Paris Agreement, cease implementing its Nationally Determined Contributions, and cease its funding to the Green Climate Fund (GCF).

On 4 August 2017, the US State Department stated that it had submitted a notice of intention to withdraw from the Paris Agreement to the United Nations, and would submit a written notice of withdrawal to the UN Secretary-General as soon as it is eligible to do so, unless appropriate circumstances have emerged that are favorable for the US to re-engage the Agreement. The statement also tried to re-open negotiations on the Agreement, stating that if President Trump can see more favorable terms for the US and American companies, workers, people, and taxpayers, the US is open to re-engage the Agreement.

On 4 November 2019, the US Secretary of State Mike Pompeo said that the US had notified the United Nations and announced that it would officially withdraw from the Paris Agreement. Pompeo also emphasized that the US withdrawal is due to the unfair economic burden imposed on it. Pursuant to the withdrawal clause, the US will formally withdraw from the Agreement on 4 November 2020, and it will become the only party to withdraw thus far.

Trump administration’s reckless withdrawal from the Paris Agreement is a telling manifestation of its pursuit of “America First” policy and unilateralism. It embodies its contemptuous attitude toward international laws and rules, that is, “apply or abandon them in a selective way”. Such withdrawal severely undermines global climate governance and international climate collaboration.

First, it has weakened the ambition and joint efforts of the international community to tackle climate change. The US is the world’s largest emitter in history, and the second largest emitter at present, accounting for about 15% of global carbon emissions. An United Nations Intergovernmental Panel on Climate Change (IPCC) report identified the US as the largest emitter in terms of accumulative carbon emissions. From 1751 to 2010, its emissions from the energy and industrial sectors accounted for up to 27.9% of the global total. In terms of carbon emissions per capita, the US has been among the highest. In 2017, its fossil fuel emissions per capita were 14.6 tons, 3.3 times of the global average.

The US emission reduction performance is an important factor affecting the effectiveness of global climate governance. The US has not ratified the Kyoto Protocol and has now withdrawn from the Paris Agreement, denying its own binding quantified emission reduction obligations. It has completely digressed from the global system and arrangements, and seriously impeded global emission reduction and green and low-carbon development.

Second, it has enlarged the deficit in global climate governance leadership. As a developed country and a major global emitter, the US has always been an important player in global climate governance. It played an important role in promoting the adoption of the Paris Agreement. Its attitude toward enforcement leads the way for many developed countries. The US withdrawal from the Paris Agreement and shifting of its responsibilities to other countries set a bad example and severely damaged the multilateral process, exerting unpredictable negative effects on the follow-up implementation of the Agreement and the realization of global temperature targets.

Third, it has brought complexity to the multilateral process of climate response. Although the US repeatedly claimed to withdraw from the deal and initiated the withdrawal procedures, the status of “will withdraw but not yet” and “withdraw in word but not in reality” has lasted for quite a long time. During the above period, the US has been constantly disrupting the negotiations on the follow-up negotiations of the Paris Agreement and exerting negative influence on the consolidation of the rule system.

During the 2018 United Nations Conference on Climate Change in Katowice (COP24), the US ignored the green and low-carbon development trend and held a side event on the promotion of fossil fuel technology, which triggered resentment from all parties and fierce resistance from non-governmental organizations. At the three United Nations Climate Change Conferences since 2017, the US held a negative negotiating stance. It has been the winner of the ironic “Fossil of the Day” award based on NGO votes for one-fifth of the times, more than any other country in the world.

The US withdrawal from the Paris Agreement has been opposed unanimously by the international community. Leaders of various countries and international organizations have expressed their regrets and disappointments to Trump administration’s decision. The Secretary-General of the United Nations, the Executive Secretary of the Secretariat of the UNFCCC, the European Union and Germany, France, Italy, the UK, Mexico, Canada, and Japan, among others, have all expressed their regrets through spokespersons, statements or in other forms.

In response to the U.S. claim that it is willing to re-engage the Agreement under the condition of re-negotiation, all parties emphasized that the Paris Agreement has been widely accepted and negotiations cannot be reopened.

Contrary to the flagrant withdrawal of the US, the international community has reaffirmed its firm will to implement the Agreement and strengthen global climate governance.

The EU said it will strengthen cooperation with other allies to address climate change. Germany, France and Italy issued a joint statement underscoring their readiness to implement the Paris Agreement and climate financing goals as early as possible, and to assist developing countries at full stretch, especially the least developed countries and countries that are most affected by climate change, in realizing mitigation and adaptation related goals. The UK, Mexico, Australia, the Republic of Korea and others have also reiterated their support and commitment to the Agreement. UN Secretary-General António Guterres expressed through his spokesperson his belief that countries and businesses around the world will continue to demonstrate outstanding vision and leadership, and are committed to low-carbon and resilient economic growth. At the same time, people in the US have also launched the “We are still in” campaign, and the voices against the US withdrawal continue to rise.

II. Failure to Fulfill International Obligations

Fulfilling treaty obligations in good faith is an important basic principle of international law, and a country’s earnest fulfillment of treaty obligations is essential for observing and implementing the rules of international law. In the international environmental field, the US has fulfilled its treaty obligations and international commitments in a non-good faith manner, trampling on international laws and rules.

i. Insufficient implementation of climate action commitments

1. The US has moved slowly in fulfilling its emission reduction commitments. Under the UNFCCC, the US, as an Annex I country of the Convention, should take measures to limit greenhouse gas emissions and take the lead in fulfilling its emission reduction obligations. However, after the ratification of the Convention in October 1992, the US witnessed a rapid increase in its carbon emissions, and the growth trend had lasted for 15 years. It did not reach its peak emissions until around 2007.

In 2010, the US notified the Secretariat that it pledged to reduce its economy-wide carbon emissions by 17% compared to the 2005 level by 2020. However, according to the latest US greenhouse gas inventory report, as of the end of 2018, the US greenhouse gas emissions were only 10.2% lower than in 2005, barely fulfilling its 60% emission reduction target. In 2015, the Obama administration proposed a new climate action target, promising to reduce emissions by 26%-28% compared to the 2005 level by 2025. Trump administration reneged on the promise by announcing in June 2017 that it would refuse to fulfill the above goals.

2. The US has ignored the reporting obligations of the Convention. According to Article 12 of the Convention and relevant COP decisions, as a developed country, the US should submit Biennial Report every two years and National Communication every four years. The US has refused to submit relevant progress reports for three consecutive years, making it impossible for the international community to have a full picture of the US actions and progress. Since 2018, the US has not submitted its 3rd and 4th Biennial Reports and its 7th National Communication, becoming one of the very few developed countries that failed to fulfill this obligation. The above-mentioned actions of the US once again set a bad example for developed countries who are expected to stringently implement the Convention, thus injecting negative energy into global climate governance.

ii. Failure to fulfill funding commitments

Funding support is key to the implementation of multilateral environmental treaties and to the effective climate actions by developing countries. According to relevant treaty provisions, the principle of “common but differentiated responsibilities” and historical responsibilities, the US, as a developed country, has the obligation to provide sufficient and sustained financial support to developing countries. But instead of doing so, Trump administration has kept cutting down environment-related budget and substantially reduced investment in environment-related research and development and international cooperation. Its proposed budget for fiscal year 2021 allocates almost nothing for multilateral environmental cooperation, including on climate change and biodiversity. Internationally, the US has not earnestly fulfilled its obligations, with frequent contributions arrears and slackening of environment-related efforts. It has also arbitrarily rejected developing countries’ appeals for funding, and gone out of its way to weaken funding mechanisms under the UNFCCC and the Paris Agreement.

1. The US has drastically reduced its pledges to Global Environment Facility (GEF). Established in 1991, GEF serves as the main financial mechanism for important international environmental agreements, including the UNFCCC, the Convention on Biological Diversity (CBD), the United Nations Convention to Combat Desertification (UNCCD), the Stockholm Convention on Persistent Organic Pollutants, and the Minamata Convention on Mercury. In the history of GEF, the largest contributions arrears come from the US, which stand at US$111 million (approximately US$111 million in GEF-2 replenishment), accounting for 95.7% of the total arrears of US$116 million. At the same time, the US has substantially lowered its pledges of contributions. While most developed countries raised their pledges during the GEF-7 replenishment in 2018, Trump administration drastically reduced its pledges to US$270 million, a 50% reduction from the previous round, marking the first major decrease in GEF’s history.

2. The US has failed to fulfill its funding pledge for GCF. Established in 2010, GCF is an important financial mechanism under the UNFCCC and the Paris Agreement. Its funding support is needed for developing countries to deal with climate change. At GCF’s initial fund-raising stage in November 2014, the Obama administration promised to contribute US$3 billion and in effect provided US$1 billion before the end of its term. But after Trump administration took office, he announced the cessation of funding and refused to provide the outstanding US$2 billion. At the first round of GCF replenishment negotiations in 2019, while most developed countries agreed to increase their contributions, Trump administration contributed nothing, creating troubles for meeting the GCF replenishment target.

3. The US has contributions arrears for multilateral environmental treaties. The US has taken a negative attitude toward paying membership contributions to multilateral environmental treaties. According to the 2019 report of the UNCCD secretariat, the US had contributions arrears of more than 3.058 million euros from 1999 to 2019. Since 2018, the US has yet to pay over 13.547 million euros of UNFCCC contributions.

4. The US has hindered the progress of global environmental research. According to a report of the US House Select Committee on the Climate Crisis, “Solving the Climate Crisis: the Congressional Action Plan for a Clean Energy Economy and a Healthy, Resilient, and Just America”, Trump administration provided no funding to the IPCC and the UNFCCC in 2017, despite the fact that previous administrations contributed US$10 million each year. In doing so, the US has impeded scientific research on climate change both at home and across the world.

In general, the US has greatly weakened the ability of relevant mechanisms to provide funding to developing countries and hindered global climate and environmental cooperation. Its membership contributions arrears and funding cuts for environment-related R&D have also reduced financial resources for implementing multilateral environmental treaties, obstructed the multilateral process of environmental governance under various conventions, and slowed down the progress of global environmental research.

III. Absence from Multilateral Environmental Treaties in Multiple Fields

i. The US has refused to be bound by treaties by signing but not ratifying them.

Environmental issues are common challenges for humanity. They concern the global commons and carry strong spill-over effects. As countries across the world form a community with a shared future, relevant challenges urgently need to be addressed by the international community under the multilateral framework through strengthened rules and implementation of treaties.

However, out of its selfish interests, the US has been selectively absent from the multilateral environmental field. It has signed treaties such as the Kyoto Protocol, the Convention on Biological Diversity, the Basel Convention on the Control of Transboundary Movement of Hazardous Wastes and Their Disposal,the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, and theStockholm Convention on Persistent Organic Pollutants, but it has ratified none of them and has long been an outsider of the multilateral framework. The above-mentioned treaties have global implications, with each having more than 160 parties, and the CBD and the Kyoto Protocol even having more than 190 parties. But the US has neither ratified the CBD nor acceded to the three important protocols on biodiversity, i.e. the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from Their Utilization, the Cartagena Protocol on Biosafety and the Nagoya-Kuala Lumpur Supplementary Protocol on Liability and Redress.

The US is not only an important party to global climate and environmental governance, but also a major country of greenhouse gas emissions, bio-technology, chemical production and waste export. It can and should make great contributions to multilateral governance in relevant fields. However, it has not ratified multiple environmental treaties after signing them. This shows that the US has taken a unilateralist approach of evading restrictions from international environmental treaties and its own international responsibilities, and that it has been ignorant of international environmental protection efforts and non-cooperative toward the multilateral environmental field. Its inaction has created major loopholes in multilateral governance under relevant treaties, including reducing by one third the greenhouse gas emissions covered by the Kyoto Protocol, and posed severe challenges to global environmental integrity and effectiveness of multilateral environmental treaties.

ii. The US has violated purposes of treaties and disrupted their implementation.

According to the Vienna Convention on the Law of Treaties, a country is obliged to refrain from acts which would defeat the object and purpose of a treaty after signing it, even though it has not entered into force for this country. However, after signing the Kyoto Protocol, the US has seen a rapid rise of carbon emissions, which is inconsistent with the purpose of the Protocol and its emission limitation or reduction commitment of 7% cuts. But at the same time, the US has been pushing developing countries to lower their emissions, and even claimed that the precondition for its ratification of the Kyoto Protocol is the undertaking of emission reduction obligations by developing countries. This fully reveals the double standards applied by the US, i.e. treating others strictly while being lenient to itself.

Affected by the passive attitude of the US, many developed countries have refused to make new emission reduction commitments under the second commitment period (2013-2020) of the Kyoto Protocol. Some developed countries have even withdrawn from the Protocol without fulfilling their emission reduction obligations under the first commitment period. This has further reduced the global emission coverage of the Protocol and created major difficulties for relevant negotiations and implementation work. As a result, the Doha Amendment which concerns the second commitment period of the Protocol has been long put on hold, and the Protocol now only exists in name due to the US-led withdrawal.

IV. Disruption of the Multilateral Environmental Process

While dodging international responsibilities under multilateral environmental governance, the US has also disrupted international environmental cooperation and acted as a trouble-maker in global environmental governance.

i. The US has broken G20 consensus on climate change. Climate change had been a subject of G20 leaders’ declarations since 2009. Yet due to the deliberate obstruction of the US, no consensus was reached on this topic for the first time in the G20 Hamburg Declaration in 2017. In the end, the Declaration adopted a “19+1” compromise in the climate-related paragraphs, i.e. 19 members reiterating their commitment to the Paris Agreement and global climate governance, while the US announcing its withdrawal from the Paris Agreement. Because of the continued negative stance of the US, the 2018 and 2019 G20 leaders’ declarations followed the same “19+1” approach, which seriously weakened the G20’s leading role on climate change.

ii. The US has deliberately impeded environmental projects in developing countries. When it comes to environmental funds and project approval, the US has not only sharply reduced contributions in recent years, but also pointed fingers at developing countries’ right to use funds and frequently created troubles for international cooperation. The US has repeatedly challenged the legitimate and reasonable rights of developing countries to use funds, and has also been single-handedly blocking the adoption of projects in developing countries:

Since November 2013, it has blocked climate change, biodiversity and other projects in developing countries with such excuses as human trafficking and human rights violations.

In the past five years, it has expressed unreasonable objections to several China-related projects. Since December 2018, it has rejected all Chinese projects according to a memorandum signed by Trump administration concerning countries that have not complied with the Trafficking Victims Protection Act.

On similar grounds, it has single-handedly expressed opposition regarding projects in many developing countries, including Cuba, Burundi, Sudan, South Sudan, Equatorial Guinea, Mauritania, The Gambia, Comoros, the Republic of the Congo, the Democratic Republic of the Congo, Laos, Eritrea, and Venezuela.

iii. The US has blocked the global plastic waste management process. As countries have deepened their awareness of the hazardous effects of plastic waste pollution, strengthening control over plastic waste import and export has gradually become an international consensus. China decided to include plastic waste and other wastes from overseas into its Catalog of Prohibited Imports of Solid Waste in July 2017. But the US, as a signatory to the Basel Convention, has made groundless accusations against China for disrupting the global waste recycle business, and asked China to cancel its decision, with the purpose of meeting its own need for waste export. In doing so, the US has gone against the international trend and ignored China’s rights as a party to the Convention.

In May 2019, the Conference of the Parties of the Basel Convention adopted an amendment to strengthen plastic waste management, establishing a global framework for the prevention and control of plastic waste pollution. It was reported that during the meeting, the US, as a non-party to the Convention, kept playing tricks behind the scenes in an attempt to block the adoption of the amendment. Such acts once again revealed the arrogance of the US.

Ecological conservation is vital to the future of humanity, and making the earth our green home is our shared dream. Protecting the ecological environment and addressing climate change require the concerted efforts of all countries. No country can stay out of it and no country can do it alone.

Guided by Xi Jinping thought on ecological conservation, China has treated nature with awe and stepped up efforts to foster an ecological system conducive to green development. China calls for jointly building a clean and beautiful world and a shared future for all life on earth.

As a developing country, China has been taking climate actions to the best of its ability. We have over-delivered on our 2020 climate action target ahead of schedule and made important contributions to global response to climate change. On 22 September 2020, President Xi Jinping announced in his statement at the General Debate of the 75th session of the UN General Assembly that China will scale up its Intended Nationally Determined Contributions by adopting more vigorous policies and measures, and aims to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060.

The US backpedaling on global environmental governance issues goes against the aspirations of the American people and harms the common interests of people around world and future generations. It is hoped that the US will return as soon as possible to the right track of responding to global environmental crises by upholding international law and multilateralism and promoting global synergy and extensive participation. The US is expected to work with other countries to create a future of win-win cooperation, the rule of law, fairness and justice, inclusiveness, mutual learning, and common development, with each country making contribution to the best of its ability.

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U.S. State Dept. Fact Sheet Criticizing China Here:
https://www.state.gov/chinas-environmental-abuses-fact-sheet/#:~:text=It%20has%20been%20the%20world%27s,third%20of%20all%20emissions%20globally.&text=In%202019%20alone%2C%20China%27s%20energy,States%27%20decreased%20by%202%20percent.


(Feedback my way – more to come; I will write a story on China’s climate record soon; updated Sunday to include Regional Comprehensive Economic Partnership, updated Wednesday evening London time with U.S. State Dept. Response, updated Thursday with Bloomberg News report.)

Get in touch with carrzee.org
Mathewncarr@gmail.com

EU’s Ambitious 2030 Emissions Cap Ain’t Ambitious Enough (1)

By Mathew Carr

Nov. 6, 2020 — LONDON— The European Union continues to push for linkages to its carbon market, the world’s biggest by traded value, as it considers a much tighter emissions-reduction target for 2030.

As the U.S. is set to resume participation in the United Nations Paris climate deal, the EU is getting ambitious with its 2030 emissions-reduction agreement.

The target of a 60% emission reduction target vs 1990 levels is being flagged by the European Parliament, 5 points tighter than that proposed by the European Commission and a full 20 points more than the current level of 40%.

The parliament must be a bit crazy, you might think. Isn’t the EU worried all the profitable dirty industries will pack up and move to …well, pretty much anywhere else on earth?

The European People’s Party, the biggest group in the region’s parliament, is worried about just such a scenario.

“No other major economy in the world is anywhere near the direction the European Commission wants to go,” Peter Liese, EPP representative, told other lawmakers.

“The only argument I hear from the Environment Committee in favour of the 60% against the Commission proposal is that it is tactical. The Council (of nations in the EU) may be pushing us down, so we have to vote for something higher now. But firstly, the Council is already at 55% with a qualified majority, and secondly one cannot say to the people who are worried about their jobs, in the steel industry, in the automotive supply industry, etc. (that 60% was) was just a tactic. Let’s vote for what we mean and that is the Commission’s proposal: 55%!”

It’s fair enough that rich countries are worried about jobs, isn’t it?

When Europe and Japan (and other rich nations) agreed to targets under the Kyoto Protocol climate deal from 2008-2020, industrial output in China and other emerging nations surged, equalising global wealth. Or perhaps that was a coincidence.

Europe began its carbon market covering about half its economy in 2005, but so far, it’s been giving away carbon allowances — effectively rights to pollute — ever since, to factories covered by the program, the world’s largest by traded volume.

Here’s something that might surprise you, especially those in industry: A 60% reduction target for Europe is simply not ambitious enough, given the urgency of the climate crisis and historical responsibility.

That’s because the first half of emissions in any economy are much easier to cut than the second half. Plus, the EU can use emissions credits created by BRIC countries AND those proved before 2021, to cut its risks of taking on an ambitious 2030 target.

Europe has already shown this. It’s got a target to cut emissions by 20% vs 1990 by 2020 and it cut by 24% already by 2019. This year, it’s set to cut by another 15% or so in a single year because of the coronavirus pandemic, so it could potentially reach 30% by this year.

See this:
https://carrzee.org/2020/11/05/plans-to-reach-net-zero-emissions-come-too-late-for-the-eu-to-adopt-a-tighter-2020-target-that-its-probably-already-met/

The EU can probably afford to cut by even 70%, or even 75%, by 2030. This is not just me saying it, it’s Yvo de Boer, former executive secretary of the UN Framework Convention on Climate Change. He was overseeing the UN climate process 2006-2010 (the UN doesn’t really oversee anything to be sure, but the UN is, or should be, a democracy, of sorts).

Countries and environmental lobby groups are thinking the oversupply in the Kyoto era (2008-2020) should mean the UN carbon credits produced already are “old rubbish” and they should not be transferred into the Paris era for compliance from 2021 and beyond.

But in actual fact, countries that produced those carbon credits, e.g., Brazil, Russia, India, China, should be rewarded, because companies in those emerging nations spent real money to help clean up the mess mainly created by richer nations.

Canada, China, Japan, New Zealand, South Korea are planning net-zero emissions targets in the 2050-2060 realm. India is considering a domestic carbon market, like China is, according to emissions-pricing news service Carbon Pulse:
https://carbon-pulse.com/114016/

My home country, Australia, where are you?

By linking to other carbon markets, the EU can dramatically cut the risks associated with its 2030 emissions-reduction target, both via borders and timeframes. Emerging countries can get good-value finance via carbon markets to leap frog rich nations economically speaking, or at least catch up, substantially.

Inupiat town in Arctic struggles with rising waters. Brian Adams, British Museum

Cutting by about 75% in 2030 by the EU, “I think that would help because you would significantly increase the level of ambition and, at the same time, you are cleaning up the system, by putting previous credits to some useful purpose in an enhanced-ambition context,” de Boer said Friday by telephone from Holland.

Emerging countries will be willing to pledge bigger emission reductions if they get finance from richer nations for that extra effort, de Boer said, citing Indonesia as an example.

Some of that help will be via carbon market linking under Article 6 of the Paris climate deal, the transfer of emission obligations.

Post 2020, Indonesia has set unconditional reduction target of 29% and a reduction target up to 41% that’s conditional on “international support”, compared with a business-as-usual scenario, by 2030.

These conditional targets are becoming very important for stirring global climate action, de Boer said.

If Biden wins office, he’s promised to make global climate cooperation a vital part of the U.S. foreign policy … the world might be on a better trajectory.

(Corrected, edited Friday evening, edited Sunday morning, more to come)

Zero Emission Plans Come Too Late for the EU

Pandemic’s impact on emissions could present the EU with an opportunity to improve global climate politics

By Mathew Carr

Nov. 5, 2020 — LONDON, EXCLUSIVE: The adoption of emission-reduction targets by Canada, China, Japan and South Korea, including some net-zero limits mid century, has apparently come too late for the European Union to tighten its objective for 2020.

That’s despite the fact that Europe is probably going to meet that target anyway — because coronavirus-pandemic lockdowns are slashing emissions from electricity, transport and industry.

Back in 2012, the EU was trying to get the world interested in protecting the climate. It pushed to extend the Kyoto Protocol climate agreement to 2020 and sought to muster other countries to adopt tight 2020 emission targets.

It was fighting a losing battle, with nations focused on recovering from the global financial crisis. Global emissions surged and remained at record, or near-record, levels until the pandemic hit this year.

To lure more ambition, the EU said at the time it would adopt a plan to cut emissions by 30% versus 1990 levels by 2020, instead of its current target of 20%.

Back in 2012, I was reporting from Doha, Qatar, at the UN meeting where envoys agreed to extend the Kyoto deal by eight years to this year. It was, like many UN climate meetings, punctuated by flare ups between nations about how to share the emissions-cutting effort going forward, and pay for it.

The deal achieved at the 2012 meeting in the desert outside the city and ratified only last month, said this in part:

As part of a global and comprehensive agreement for the period beyond 2012, the European Union reiterates its conditional offer to move to a 30 per cent reduction by 2020 compared to 1990 levels, provided that other developed countries commit themselves to comparable emission reductions and developing countries contribute adequately according to their responsibilities and respective capabilities.

European officials are thinking the condition was never met — other developed nations didn’t commit themselves to comparable reductions.

Quite right. U.S. emissions from energy are approximately flat on 1990 levels, according to BP Plc data.

The recently announced long-time goals by developed and emerging countries in 2030 (eg Canada) and/or in 2050 (Japan and South Korea) or 2060 (China), while very much welcomed, have no relationship to the Doha Amendment, is what EU insiders are saying.  The EU is nonetheless on track to overachieve its Doha Amendment commitment to reduce its emissions by more than 20%.

Indeed, the EU had cut emissions by about 24% by 2019, according to the region’s Environment Agency. They’ve dropped another 15 points so far this year alone because of the pandemic, if power-sector data from Finnish energy group Wartsila is any indication.

So, 30% seems doable.

It’s especially doable because the EU could make up any shortfall by buying Kyoto carbon credits such as Certified Emission Reductions.

There are plenty of these around. Prices for CERs have plunged because of a lack of demand because countries have not taken on ambitious enough targets that would create that demand.

They are about 1% of the price of EU carbon allowances:

Under Kyoto and its Doha extension, the EU was indicating it would probably need a few carbon credits produced in emerging countries such as Brazil, China, India and Russia. But the demand wasn’t that great because the 2020 target was weak. The EU has allowed a limited amount of CERs into its carbon market in the 13 years through this year, which briefly boosted prices 10 years ago.

Now, with the climate crisis getting worse and worse, the EU is wanting emerging countries (and others) to finally agree rules of the Paris climate deal, where starting next year countries can finance emission cuts in other nations as a way of meeting their pledges (known as contributions) in a cost-efficient way.

Since the EU is now considering a 2030 emissions-reduction target of 60% below 1990 levels, it seems to me to make sense to take on 30% by this year. This would show developing nations that the richer countries most of blame for global warming are willing to keep their promises and be as ambitious as possible in their greenhouse-gas cuts.

It would also potentially reward the companies that put real money into emission-reduction projects in developing countries during the past two decades, assuming the EU does indeed need a few extra carbon credits to meet its more-ambitious target.

Such a move would also show the incoming U.S. president, whoever he is, that steep emission cuts are not only doable, but beneficial, because they will probably spur more global cooperation on one of the world’s most urgent and dangerous problems — climate change.

Europe Has About 1 Trillion Euros of Green Projects Ready to Go Within Two Years: EY (2)

SHORT REPORT:
Oct. 9, 2020 – London – The European Union has about 1 trillion euros of “shovel ready” green projects in its pipeline that could reach financial close within two years, according to a survey by management and accounting firm EY.

The survey covered respondents including about a quarter of the top 30 European construction companies and demonstrates the opportunity available to politicians and investors from the coronavirus pandemic recovery: Climate & Strategy Chief Executive Peter Sweatman, speaking at an online OECD green finance event on Friday about the EY study.

The EU is seeking to shift away from fossil fuels as it beds down a plan to recover from the pandemic. Technology cost reductions, green finance and policy frameworks are seen crucial to get that shift to include a boost to employment. Other regions, including Asia, are seen following similar economic strategies, according to speakers at the OECD event.

Here is a slide from Sweatman’s presentation; the EY report covered 1,000 green projects seen as the tip of the iceberg:

The report dated last month found “all and more of the 12 million full-time workers lost to Covid-19” could possibly be returned into “green and productive” employment if the recovery plan is set right.

Some political groups are worried factories will cut back on EU capacity and output, should the region shift too quickly away from fossil fuels, boosting economic costs versus other regions of the world.

For the full EY report ( eg p5) … see this link:
https://assets.ey.com/content/dam/ey-sites/ey-com/es_es/news/2020/09/ey-summary-report-green-recovery.pdf?download

(Updated early Saturday with context in final paragraphs. Earlier version corrected Sweatman’s title – he was a member of the project steering board.)

EU Carbon Allowances Jump Briefly After Parliamentarians Push Nations to Adopt Surprisingly Ambitious 2030 Target (2)

By Mathew Carr

Oct. 7, 2020 — London — European carbon allowances fluctuated after members of the European Parliament voted for the world’s biggest trade block to adopt a 60% emission-reduction target for 2030.

The target, versus 1990 levels, would be 5 points tighter than that proposed by the European Commission.

EU carbon allowances immediately surged more than 4%, then erased the increase by the close of the market at 5pm London time, partly because of concern about Brexit negotiations, according to newsletter Carbon Pulse.

Finland was among nations immediately on board with the higher level of ambition for 2030, and countries will continue to debate the proposed target for at least the next several weeks:

The biggest group in Parliament said it was concerned that the tighter target may threaten jobs, according to Bloomberg News, which wrote:

The 60% target is higher than sought by the European People’s Party, the biggest political group in the EU Parliament. Still, the EPP will not vote against the climate law as amended in the final ballot scheduled for later on Wednesday, said Peter Liese, key German member of the assembly who oversees environment policies for the group.

“We will abstain, because we sincerely dislike the 60% and think it really endangers jobs,” he said on Twitter. “We are very confident that the Council of the EU will take care that we will come back to the Commission’s proposal of net 55%.”


See this link (paywall):
https://www.bloomberg.com/news/articles/2020-10-07/eu-parliament-boosts-pressure-on-stricter-2030-climate-target?cmpid=BBD100720_GREENDAILY&utm_medium=email&utm_source=newsletter&utm_term=201007&utm_campaign=greendaily&sref=fcMjhrdB

This analyst wasn’t so sure the EPP was right, because the energy transition has already created many jobs and brought in green money to Europe’s governments:

Those countries have benefitted from billions of euros of revenue from selling the right to emit greenhouse gases since the EU carbon market began in 2005.

Having a tighter target for 2030 would mean even higher market prices for emission allowances — and even more revenue for cash-strapped government coffers.

Nations around the world are seen considering carbon pricing as they seek to rebuild their economies after the damage wrought by the coronavirus pandemic.

That’s because carbon taxes and markets, unlike company and payroll taxes, can spur employment as they encourage a shift away from coal, oil and natural gas and toward huge new cleantech investments.

In April, the International Energy Agency said investing in the climate transition would help economies recover and many countries are still finishing their post-Covid-19 recovery plans.

“We believe that by making clean energy an integral part of their plans, governments can deliver jobs and economic growth while also ensuring that their energy systems are modernised, more resilient and less polluting,” the IEA said.


*******
See this for the immediate market reaction to the EU parliament’s vote, announced earlier today:

(This story was updated Wednesday afternoon London time, and again in the evening)