News in the past few months has been dominated by the United Nations climate change conference held in December 2009 at Copenhagen. The aim of the conference was to bring about a new international agreement to succeed the 1997 Kyoto Protocol, which established targets for the developed world to reduce and manage emissions contributing to global warming.
Arising from the new ‘Copenhagen Accord’ should have been a raft of national measures to limit emissions. As many readers will be aware, Copenhagen unfortunately did not deliver explicit targets to reduce emissions. As such, national initiatives to limit emissions have largely been put on hold until emission reduction targets are agreed in order to avoid countries comprising economic competitiveness.
The following headlines detail the emission reduction initiatives that have made it through, and details how previously existing proposals have been influenced by the outcome at Copenhagen.
International
- Rather than delivering any commitment for emission reductions, the UN Framework Convention on Climate Change (UNFCCC) conference merely secured agreement on international aspiration to limit global warming to 2'C. Measures and targets to achieve this could not be agreed, and will now be the subject of negotiation in as many as five follow-up meetings of the UNFCCC over the course of this year, leading up to final agreement at the next UNFCCC conference in December 2010 to be held in Cancun, Mexico.
North America
- United States – The new US administration introduced a Bill in 2009 proposing a 17% reduction in emissions (on a 2005 baseline) by 2020 to include an emissions trading mechanism. The Bill faced considerable opposition, and with the loss of the Democrat’s ‘fillibuster-proof’ majority in the Senate the Bill was withdrawn.
In the meantime, the US Environmental Protection Agency (EPA) used the existing Clean Air Act to class carbon dioxide as a danger to human health through its impact on climate change, and has proposed regulating greenhouse gas emissions unilaterally should Federal means to regulate emissions fail. Indeed, the EPA’s Mandatory Greenhouse Gas Reporting Rule (MGGRR) already commenced in January this year for large emitters of greenhouse gases to report their emissions. The EPA’s proposals have caused considerable consternation amongst Senators. Now a new climate change Bill has been introduced to Congress which could provide concessions including the prevention of any regulation by the EPA and regional US schemes (such as the Western Climate Initiative and the Regional Greenhouse Gas Initiative) and the allowance of offshore oil drilling in return for an emissions reduction target and a cap and trade system.
Far East & Australasia
- Australia – An emissions cap and trade bill introduced by the Labor Government has been defeated three times in the Senate and has now been withdrawn. A Bill is not likely to be introduced until 2013 at the earliest (following elections later this year). Calls are being made for interim measures such as carbon taxes.
- New Zealand – An emissions trading scheme has already been launched however currently includes just the forestry sector. This is due to be extended to the transport, power, steel and cement industries from 1 July 2010, however the Government has recently stated that it may delay the introduction of these sectors if there is no global deal on emissions limitation and reduction in sight.
- Japan – A new emissions trading scheme has commenced for Tokyo. This requires 1400 energy intensive organisations to meet a legally binding emission target of 6% by 2014 (on a 2000 baseline) and by 25% by 2020. Those that fail will be required to purchase emission allowances to cover any excess emissions, with failure to comply resulting in fines as well as ‘naming and shaming’. The Tokyo scheme is intended to work as a model for a national scheme, a decision on which the government recently delayed.
- South Korea – Recently announced a target for GHG emissions in 2020 to be 20% on a 2005 baseline, with a three-year pilot emissions trading scheme to be launched in late 2010 including 641 organisations South Korea is already investing 2% of its annual GDP in green growth over the next five years
EU
- France - Plans for national ‘Carbon Tax’ on energy consumption have been withdrawn, with the French Government recently proposing a new EU-wide carbon tax instead. France (with Italy) has also recently called for trade tariffs on imports of goods and services into the EU from countries that do not have emission reduction initiatives in place, however, the level of opposition within the EU does not make this likely in the short term.
- United Kingdom - Launch of CRC Energy Efficiency Scheme - a mandatory emissions trading scheme for large consumers of energy not caught by the EU Emissions Trading System. The CRC requires consumers of 6000MWh or more of electricity per annum to purchase allowances to cover the emissions resulting from their electricity and fossil fuel consumption. The CRC is different to other emission trading schemes in that participants will be refunded the cost of the purchase of their emission allowances. This refund will however be based upon the performance of a participant in reducing their energy consumption and emissions.
The United Kingdom has also launched a feed-in tariff for organisations generating renewable electricity. Producers of such electricity will not only be paid for the quantity of electricity they generate (even if they consume it themselves) but also an additional payment for feeding that into the national grid.
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