[Top News] from [REUTERS]
[Green Business]
Tiny "carbon neutral" club struggles with costs
Tue Nov 24, 2009 9:07am EST
By Alister Doyle, Environment Correspondent - Analysis
OSLO (Reuters) - Norway, Costa Rica and the Maldives are struggling with high costs and technological hurdles to stay in the world's most exclusive club for fighting climate change -- seeking to cut net greenhouse gas emissions to zero.
The United Nations is praising their "carbon neutrality" targets before a U.N. summit on December 7-18 in Copenhagen meant to agree a new pact to combat global warming. But the model is hard to imitate with its demand for a drastic shift to clean energy.
"What they're trying to do is fundamentally change the direction of their economic growth," Yvo de Boer, head of the U.N. Climate Change Secretariat, told Reuters. "It's a way of getting ahead of the game."
Yet all three of the small nations face big problems.
Greenhouse gas emissions in Norway are 7 percent above its 2012 target under the Kyoto Protocol, while emissions are rising in Costa Rica, especially in the transport sector.
And the Maldives' plan to be a tropical showcase for solar and wind power in the Indian Ocean, shifting from dependence on costly diesel, will need an estimated $1.1 billion in investments over a decade for its 310,000 people.
The Maldives is aiming for carbon neutrality by 2020, Costa Rica by 2021 and Norway by 2030.
But New Zealand and Iceland have dropped past aims of carbon neutrality because of high costs amid recession. And the Maldives failed at a meeting this month to win new recruits to the club among poor nations such as Bangladesh and Barbados.
Carbon neutrality means a nation can use fossil fuels -- in power plants, factories or cars -- only if the greenhouse gas emissions are either captured and buried or offset elsewhere, for instance by planting carbon-absorbing forests or by investing in wind turbines or solar panels abroad.
"Norway's not on track," said Knut Alfsen from the Center for International Climate and Environmental Research, Oslo.
CARBON CAPTURE AND CASH
Norway, seeing itself as a green leader even though it is the world's number five oil exporter, is spending $620 million in 2010 on research into capturing emissions from the oil and gas sector. But there have been few breakthroughs so far.
"It will be very hard to achieve (carbon neutrality) if we have no big technological change," Environment Minister Erik Solheim told Reuters. "But you have to set ambitious targets."
And the Nordic nation has a trump card -- cash. "We have more financial freedom than other countries," Solheim said. Norway has a $444 billion fund of oil savings invested in foreign stocks and bonds -- or almost $100,000 for each person.
At current market prices of about 13 euros ($19.46) a tonne, it would cost $650 million a year to buy quotas to emit Norway's annual 50 million tonnes of greenhouse gas emissions. "It's a lot of money but in some ways peanuts for Norway," Alfsen said.
Solheim insisted much of the cuts would be in domestic emissions as part of a wider global goal of slowing rising temperatures projected to bring more heatwaves, droughts, floods, species extinctions and rising sea levels.
Both Norway and Costa Rica have a head start because they already generate almost all electricity from clean hydropower. The Maldives, worried that rising sea levels could swamp coral atolls, hope to be a testing ground for green technology.
And the goals may help both Costa Rica and the Maldives promote themselves as eco-friendly tourist destinations.
"Our main challenge is transport with fossil fuels," said Pedro Leon Azofeifa, coordinator of Costa Rica's 'Peace with Nature' initiative which is seeking carbon neutrality.
Some Costa Ricans complain of a lack of progress.
"The goal of carbon neutrality was set 2-1/2 years ago but not much has happened -- our carbon footprint is growing," said Roberto Jimenez, leader of the www.co2neutral2021.org group which says carbon neutrality will help businesses.
One goal is a new railway in central Costa Rica -- costing hundreds of millions of dollars.
And Costa Rica hopes that its forests -- trees soak up heat trapping carbon dioxide as they grow -- will qualify for credits under a new U.N. plan due to be agreed in Copenhagen aimed at slowing deforestation in developing nations.
The Central American nation cleared forests in the 1980s to make way for cattle ranching but then reversed policy to promote sustainable logging and tourism -- before climate change was a worry. It is not clear whether that will qualify for credits.
"Costa Rica is in a unique position because all tropical countries want to do what Costa Rica has already achieved," said Carlos Manuel Rodriguez, a former environment minister who works for Conservation International.
A plan for the Maldives foresees investments of $110 million a year over a decade in solar and wind power -- reckoning that savings on diesel imports would quickly repay investments.
"If the poorest countries in the world are doing the most, where is there for the United States to hide?" said Mark Lynas, a British climate expert and author who advises the Maldives.
All three states have highlighted their neutrality efforts. Maldives President Mohamed Nasheed staged the world's first underwater cabinet meeting last month, in scuba gear, to put pressure on nations at Copenhagen to shift to clean energy.
[Green Business]
Carbon will mature as inflation hedge
Tue Nov 24, 2009 9:57am EST
By Nina Chestney
LONDON (Reuters) - The $126 billion global carbon market will mature so that investors will use it as a hedge against equities and inflation, Bache Commodities Ltd.'s emissions trading head told Reuters in an interview.
Crude oil or gold have often been used to hedge against inflation risk or equities, as investors believe they can offer some protection against rising consumer prices.
"The carbon market is expanding on a rapid basis," said Andrew Ager, head of emissions trading at Bache Commodities Ltd.
"As the U.S. gets cap-and-trade legislation and the Australian bill is passed, the market could mature to become a similar commodity to oil in the way it is used by hedgers as a strategy," he added.
The EU's flagship emissions trading scheme (EU ETS) began in 2005. Prices for permits traded under the scheme, called EU Allowances (EUAs), are the global benchmark for emissions markets.
EUAs frequently correlate to oil and German power prices, as well as natural gas and coal. A sign of the relatively young market's development is that these markets have started to look at carbon prices for direction.
"There's now a situation where oil, coal and gas traders are looking at carbon prices for direction. That's a complete 180 (degree turn)," Ager said.
"Say you have a portfolio of mining shares, it is possible to use carbon as a hedge as part of your portfolio. (Carbon) has even correlated with copper quite strongly recently. As people look at copper as an indicator of industrial growth, it makes sense."
Reuters estimates show EUA prices have shown a weekly correlation of 0.75 with copper since November 1, and 0.85 in the corresponding period the previous month.
GROWTH
The European Union's executive Commission is aiming for the world's major emissions trading schemes to link by 2020.
Progress toward this goal is being hampered by U.S. cap-and-trade legislation's slow progress through the Senate and reduced expectations for a legally binding climate treaty in Copenhagen next month.
"I hope to see a global carbon market sooner than 2020. There is at least a framework for a future market. Regulation may get stricter, there will be foibles and quirks but the underlying (market) structure is there," Ager said.
Ager expects London to continue its reign as the hub of the global carbon market, flanked by a U.S. exchange and an Asian/Antipodean exchange.
An Australian carbon scheme is scheduled to start in July 2011. The government gained bipartisan political backing for its revised carbon-trade plan on Tuesday, but some opposition members still threaten to vote against it or try to have the Senate vote, expected on Thursday, delayed until February 2010.
"You do need something to push the southern hemisphere. You need that link up for a 24-hour market," Ager said.
Major metal market player Bache Commodities expanded into emissions trading by opening a desk in London in June. Ager heads a team of three emissions traders.
(Reporting by Nina Chestney; Editing by William Hardy)
[Green Business]
Tiny "carbon neutral" club struggles with costs
Tue Nov 24, 2009 9:07am EST
By Alister Doyle, Environment Correspondent - Analysis
OSLO (Reuters) - Norway, Costa Rica and the Maldives are struggling with high costs and technological hurdles to stay in the world's most exclusive club for fighting climate change -- seeking to cut net greenhouse gas emissions to zero.
The United Nations is praising their "carbon neutrality" targets before a U.N. summit on December 7-18 in Copenhagen meant to agree a new pact to combat global warming. But the model is hard to imitate with its demand for a drastic shift to clean energy.
"What they're trying to do is fundamentally change the direction of their economic growth," Yvo de Boer, head of the U.N. Climate Change Secretariat, told Reuters. "It's a way of getting ahead of the game."
Yet all three of the small nations face big problems.
Greenhouse gas emissions in Norway are 7 percent above its 2012 target under the Kyoto Protocol, while emissions are rising in Costa Rica, especially in the transport sector.
And the Maldives' plan to be a tropical showcase for solar and wind power in the Indian Ocean, shifting from dependence on costly diesel, will need an estimated $1.1 billion in investments over a decade for its 310,000 people.
The Maldives is aiming for carbon neutrality by 2020, Costa Rica by 2021 and Norway by 2030.
But New Zealand and Iceland have dropped past aims of carbon neutrality because of high costs amid recession. And the Maldives failed at a meeting this month to win new recruits to the club among poor nations such as Bangladesh and Barbados.
Carbon neutrality means a nation can use fossil fuels -- in power plants, factories or cars -- only if the greenhouse gas emissions are either captured and buried or offset elsewhere, for instance by planting carbon-absorbing forests or by investing in wind turbines or solar panels abroad.
"Norway's not on track," said Knut Alfsen from the Center for International Climate and Environmental Research, Oslo.
CARBON CAPTURE AND CASH
Norway, seeing itself as a green leader even though it is the world's number five oil exporter, is spending $620 million in 2010 on research into capturing emissions from the oil and gas sector. But there have been few breakthroughs so far.
"It will be very hard to achieve (carbon neutrality) if we have no big technological change," Environment Minister Erik Solheim told Reuters. "But you have to set ambitious targets."
And the Nordic nation has a trump card -- cash. "We have more financial freedom than other countries," Solheim said. Norway has a $444 billion fund of oil savings invested in foreign stocks and bonds -- or almost $100,000 for each person.
At current market prices of about 13 euros ($19.46) a tonne, it would cost $650 million a year to buy quotas to emit Norway's annual 50 million tonnes of greenhouse gas emissions. "It's a lot of money but in some ways peanuts for Norway," Alfsen said.
Solheim insisted much of the cuts would be in domestic emissions as part of a wider global goal of slowing rising temperatures projected to bring more heatwaves, droughts, floods, species extinctions and rising sea levels.
Both Norway and Costa Rica have a head start because they already generate almost all electricity from clean hydropower. The Maldives, worried that rising sea levels could swamp coral atolls, hope to be a testing ground for green technology.
And the goals may help both Costa Rica and the Maldives promote themselves as eco-friendly tourist destinations.
"Our main challenge is transport with fossil fuels," said Pedro Leon Azofeifa, coordinator of Costa Rica's 'Peace with Nature' initiative which is seeking carbon neutrality.
Some Costa Ricans complain of a lack of progress.
"The goal of carbon neutrality was set 2-1/2 years ago but not much has happened -- our carbon footprint is growing," said Roberto Jimenez, leader of the www.co2neutral2021.org group which says carbon neutrality will help businesses.
One goal is a new railway in central Costa Rica -- costing hundreds of millions of dollars.
And Costa Rica hopes that its forests -- trees soak up heat trapping carbon dioxide as they grow -- will qualify for credits under a new U.N. plan due to be agreed in Copenhagen aimed at slowing deforestation in developing nations.
The Central American nation cleared forests in the 1980s to make way for cattle ranching but then reversed policy to promote sustainable logging and tourism -- before climate change was a worry. It is not clear whether that will qualify for credits.
"Costa Rica is in a unique position because all tropical countries want to do what Costa Rica has already achieved," said Carlos Manuel Rodriguez, a former environment minister who works for Conservation International.
A plan for the Maldives foresees investments of $110 million a year over a decade in solar and wind power -- reckoning that savings on diesel imports would quickly repay investments.
"If the poorest countries in the world are doing the most, where is there for the United States to hide?" said Mark Lynas, a British climate expert and author who advises the Maldives.
All three states have highlighted their neutrality efforts. Maldives President Mohamed Nasheed staged the world's first underwater cabinet meeting last month, in scuba gear, to put pressure on nations at Copenhagen to shift to clean energy.
[Green Business]
Carbon will mature as inflation hedge
Tue Nov 24, 2009 9:57am EST
By Nina Chestney
LONDON (Reuters) - The $126 billion global carbon market will mature so that investors will use it as a hedge against equities and inflation, Bache Commodities Ltd.'s emissions trading head told Reuters in an interview.
Crude oil or gold have often been used to hedge against inflation risk or equities, as investors believe they can offer some protection against rising consumer prices.
"The carbon market is expanding on a rapid basis," said Andrew Ager, head of emissions trading at Bache Commodities Ltd.
"As the U.S. gets cap-and-trade legislation and the Australian bill is passed, the market could mature to become a similar commodity to oil in the way it is used by hedgers as a strategy," he added.
The EU's flagship emissions trading scheme (EU ETS) began in 2005. Prices for permits traded under the scheme, called EU Allowances (EUAs), are the global benchmark for emissions markets.
EUAs frequently correlate to oil and German power prices, as well as natural gas and coal. A sign of the relatively young market's development is that these markets have started to look at carbon prices for direction.
"There's now a situation where oil, coal and gas traders are looking at carbon prices for direction. That's a complete 180 (degree turn)," Ager said.
"Say you have a portfolio of mining shares, it is possible to use carbon as a hedge as part of your portfolio. (Carbon) has even correlated with copper quite strongly recently. As people look at copper as an indicator of industrial growth, it makes sense."
Reuters estimates show EUA prices have shown a weekly correlation of 0.75 with copper since November 1, and 0.85 in the corresponding period the previous month.
GROWTH
The European Union's executive Commission is aiming for the world's major emissions trading schemes to link by 2020.
Progress toward this goal is being hampered by U.S. cap-and-trade legislation's slow progress through the Senate and reduced expectations for a legally binding climate treaty in Copenhagen next month.
"I hope to see a global carbon market sooner than 2020. There is at least a framework for a future market. Regulation may get stricter, there will be foibles and quirks but the underlying (market) structure is there," Ager said.
Ager expects London to continue its reign as the hub of the global carbon market, flanked by a U.S. exchange and an Asian/Antipodean exchange.
An Australian carbon scheme is scheduled to start in July 2011. The government gained bipartisan political backing for its revised carbon-trade plan on Tuesday, but some opposition members still threaten to vote against it or try to have the Senate vote, expected on Thursday, delayed until February 2010.
"You do need something to push the southern hemisphere. You need that link up for a 24-hour market," Ager said.
Major metal market player Bache Commodities expanded into emissions trading by opening a desk in London in June. Ager heads a team of three emissions traders.
(Reporting by Nina Chestney; Editing by William Hardy)
※コメント投稿者のブログIDはブログ作成者のみに通知されます