Thursday, March 4, 2010

Struggling to find successor to Kyoto


The Kyoto climate change pact isn’t dead.

It just isn’t showing much sign of an after-life, amid upheavals within the United Nations ranks, including a review of the U.N.’s own climate change panel, whose credibility has been tarnished by errors in global warming reports, and the departure of two super oil majors from a United States Climate Action Partnership, or USCAP.

The collective mood is one of gloom after December’s conference in Copenhagen, which fell short of the hoped-for consensus deal.

If there is to be an international breakthrough it will now have to wait for November’s meeting in Cancun, Mexico, where efforts will be directed at turning Copenhagen’s non-binding political agreement into a legal treaty.

But the failure at Copenhagen to use Kyoto as the basis for a global carbon price to guide billions of dollars in capital spending on such undertakings as nuclear and solar power means there is nothing in place yet to extend the pact that was adopted 12 years ago and implemented in 2005.

Due to expire in 2012

Kyoto, which binds 37 rich nations (excluding the United States) to reduce greenhouse gas emissions by 5 percent below 1990 levels between 2008-2012, is due to expire in 2012.

The rapidly-emerging economic powers of China and India have demanded that the Kyoto signatories must extend Kyoto to 2020 before they will agree to rein in their GHGs in a new treaty.

Many climate change negotiators worldwide are increasingly concerned that the post-2012 period is in jeopardy unless there is a deal on the price of carbon, although some believe the carbon credit trading market will survive, regardless of other developments.

At the United Nations, there is also a leadership void following the decision by Yvo de Boer to step down July 1 as executive director of the U.N. Framework Convention on Climate Change.

He was seen as extremely frustrated by the Copenhagen process and the inability of participants to bridge the gap between developing and developed countries, created by divergent energy needs, economies and political systems.

Likened to herding cats

De Boer’s role was likened to herding cats, with one climate change consultant, Mark Lynas, suggesting the resignation “indicates (de Boer’s) frustration at the general unraveling of the process that was so depressingly evident at Copenhagen.”

Lynas said the chances of a legally-binding deal in Cancun “seem to recede by the day.”

De Boer said governments “provide the policy framework” for combating climate change, but the “real solutions must come from business.”

Just as troubling for the United Nations has been its decision to review its climate change panel after the Intergovernmental Panel on Climate Change admitted in February that its 2007 report had exaggerated the rate at which Himalayan glaciers were melting and overstated how much of the Netherlands is below sea level (a report that shared the 2007 Nobel Peace Prize with former Vice-President Al Gore).

The inquiry dovetails with a separate inquiry by Britain’s University of East Anglia into the content of the hacked e-mails at the university’s Climate Research Unit that indicated some scientists have been trying to muzzle those who disagree that climate change is “settled science.”

It doesn’t help that ConocoPhillips and BP plan to quit USCAP, which is made up of businesses and environmental organizations that lobby Congress to impose a cap on carbon emissions.

Concerned Congress ignoring critical role of natural gas

Neither company opposes a legislated cap, but both are taking issue with provisions in a U.S. House-passed bill and pending Senate legislation, saying the measures are unfair to the transportation sector and will place U.S. refineries at a competitive disadvantage and drive down the use of natural gas.

ConocoPhillips said it wants to concentrate more on “ensuring fair and equitable treatment of the transportation sector and its consumers and on expanding opportunities for greater near-term GHG reductions through increased use of natural gas.”

Company chairman and chief executive officer Jim Mulva said the House climate legislation and Senate proposals are ignoring the “critical role that natural gas can play in reducing GHG emissions.

“We believe greater attention and resources need to be dedicated to reversing these missed opportunities … (to) save thousands of American jobs, as well as create new ones.”

A BP spokesman said the company believes USCAP has achieved its primary goal of creating a “price-based framework for climate change legislation.”

However, he said, the legislation "imposes a disproportionate cost burden” on the transportation sector and consumers.

U.S. refineries at risk

The BP spokesman said the House bill, which allocates only 2 percent of emissions-free allowances to the oil and gas industry, could see the closure of U.S. refineries.

He said the 35 percent allowances available to coal-burning utilities will drive down the demand for natural gas, which BP views as the lowest-cost option for reducing GHGs.

BP said that pulling out of USCAP does not change its call for legislation to cap and reduce GHGs.

Shell said it will remain in USCAP to lobby for federal legislation that “will protect existing jobs, create new jobs via development of domestic oil and gas resources, allowing the U.S. to be more self-reliant, incentivize the development of lower-carbon energies and reduce GHGs.”

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