By JEFFREY BALL
With the push to cap greenhouse-gas emissions all but dead in the U.S., world diplomats will meet in Mexico starting Monday to try to eke out a less-ambitious attack on global warming.
Few observers are confident of a breakthrough.
At a two-week United Nations climate conference in the Mexican resort city of Cancun, negotiators will focus not on the stick of mandatory emissions limits but on the carrot of tens of billions of dollars in subsidies from industrialized countries to help developing nations grow on a greener path.
Almost all growth in global greenhouse-gas emissions in coming years is expected to come from developing countries. The subsidies likely would, among other moves, help China build more-efficient coal-fired power plants, Brazil preserve forests, and an array of developing countries build wind farms and solar projects.
Diplomats pledged the incentives at a U.N.-sponsored climate summit in December in Copenhagen. They promised $30 billion in climate funding for poor countries by 2012, and another $100 billion annually, expected to come largely from private investment, starting in 2020.
But negotiators left for another day the task of hashing out the details of how to deliver on those funding pledges. The day has come, but the details have prompted yet another standoff.
Many developing countries say the U.S. and other rich nations are in some cases cutting as much money in other parts of their foreign-aid budgets as they're adding in what they call climate aid—basically shuffling rather than enlarging their foreign-aid budgets. They say the billions of dollars in new climate aid should be in addition to that already-existing assistance.
The U.S. rejects the argument that only climate funding that adds to past years' total amounts of foreign assistance should qualify toward such pledges, Todd Stern, the Obama administration's top climate negotiator, said in an interview. "There are very sharply differing views on what is new," he said.
No one suggests the incentives would bankroll emission cuts large enough to put a major dent in global greenhouse-gas output.
But the fight over these subsidies is a "concern, because, quite frankly, everyone has to start doing things now" to make deeper emission cuts down the road more possible, Robert Orr, the U.N.'s assistant secretary-general for policy planning, said in an interview.
Yet expectations of any major emission cuts over the next decade or two are dimming. In recent months, Congressional leaders in the U.S. have made clear they don't intend to take up the issue of a nationwide emissions cap anytime soon. China has said repeatedly it doesn't intend to accept a mandatory cap.
The U.S., China, and many other countries pledged voluntarily in Copenhagen to curb the growth in their emissions by specific amounts. The fitful economic recovery makes it easier to notch progress on those pledges, because a slower economy requires less growth in fossil-fuel consumption. Fossil fuels contribute to climate change, many national scientific academies say. And many countries, including China and India, are implementing policies that nurture domestic makers of renewable-energy and energy-efficiency equipment, hoping to promote new export industries.
But the International Energy Agency said in a report this month that even if countries met the emission-reduction pledges they made in Copenhagen, greenhouse-gas output probably would rise enough to push average global temperatures more than two degrees Celsius (or 3.6 degrees Fahrenheit) above pre-industrial levels.
Write to Jeffrey Ball at jeffrey.ball@wsj.com
Sunday, 28 November 2010
Fuel bills: turning up the heat
New powers to force energy companies to disclose their wholesale trades could give energy regulator Ofgem teeth
The Guardian, Saturday 27 November 2010
And so returns that hardy yuletide perennial: a story about high energy prices and empty threats from the regulator.
Here is this year's version, as launched yesterday. Annoyed by the rise in energy firms' profit margins (up 38% over the past two months alone, which makes the mark-up on a standard dual-fuel tariff £90), the gas and electricity watchdog has announced a probe into pricing. Ofgem's review will be wide-ranging and even quite aggressive, going by the warning from top regulator Alistair Buchanan that he wants to "ask if companies are playing it straight with consumers".
Promising stuff. There is just one snag: as watchdogs go, Ofgem is among the tamest of the lot. The last time it conducted a big review of the energy market – as fuel prices were soaring in early 2008 – the conclusions could have been filed under T for Timid, revolving around making more information available to the savvy consumer. Former chartered accountant Mr Buchanan makes an unlikely firebrand; up until very recently he made all the leave-it-to-the-market noises conventional among British regulators – at least until the great banking crisis forced them to update their catechisms. And despite all the talk among observers about how Ofgem has been monitoring rising fuel prices with rising alarm, the fact remains that this review has been launched at the back end of November and will not conclude until next spring – by which time all the usual seasonal anger about big bills will have dissipated.
Still, there are some grounds to be more hopeful this time around. The most important is the political climate: fuel bills are going up sharply just as British households enter the age of austerity. VAT rises to 20% just as the new year sales begin – then the sharpest cuts in public spending in decades start. Meanwhile, the Conservatives have been wondering whether to sling Ofgem onto their great bonfire of the quangos. One of the recurrent suggestions is that the coalition could strip Ofgem of its consumer powers and hand them to the Office for Fair Trading. It is in Mr Buchanan's interest to bare his teeth.
If so, they will be teeth fitted in Brussels. Next March an EU directive comes into force that will enable states to get energy companies to disclose all of their trades in the wholesale market – and by implication how much it costs them to supply fuel to households and businesses. At the moment, Ofgem has to estimate these costs – a tricky job, and one that makes regulatory oversight difficult. These new powers bestowed by Brussels could allow Mr Buchanan's team to go much further in protecting customers. Let us hope they use them well.
The Guardian, Saturday 27 November 2010
And so returns that hardy yuletide perennial: a story about high energy prices and empty threats from the regulator.
Here is this year's version, as launched yesterday. Annoyed by the rise in energy firms' profit margins (up 38% over the past two months alone, which makes the mark-up on a standard dual-fuel tariff £90), the gas and electricity watchdog has announced a probe into pricing. Ofgem's review will be wide-ranging and even quite aggressive, going by the warning from top regulator Alistair Buchanan that he wants to "ask if companies are playing it straight with consumers".
Promising stuff. There is just one snag: as watchdogs go, Ofgem is among the tamest of the lot. The last time it conducted a big review of the energy market – as fuel prices were soaring in early 2008 – the conclusions could have been filed under T for Timid, revolving around making more information available to the savvy consumer. Former chartered accountant Mr Buchanan makes an unlikely firebrand; up until very recently he made all the leave-it-to-the-market noises conventional among British regulators – at least until the great banking crisis forced them to update their catechisms. And despite all the talk among observers about how Ofgem has been monitoring rising fuel prices with rising alarm, the fact remains that this review has been launched at the back end of November and will not conclude until next spring – by which time all the usual seasonal anger about big bills will have dissipated.
Still, there are some grounds to be more hopeful this time around. The most important is the political climate: fuel bills are going up sharply just as British households enter the age of austerity. VAT rises to 20% just as the new year sales begin – then the sharpest cuts in public spending in decades start. Meanwhile, the Conservatives have been wondering whether to sling Ofgem onto their great bonfire of the quangos. One of the recurrent suggestions is that the coalition could strip Ofgem of its consumer powers and hand them to the Office for Fair Trading. It is in Mr Buchanan's interest to bare his teeth.
If so, they will be teeth fitted in Brussels. Next March an EU directive comes into force that will enable states to get energy companies to disclose all of their trades in the wholesale market – and by implication how much it costs them to supply fuel to households and businesses. At the moment, Ofgem has to estimate these costs – a tricky job, and one that makes regulatory oversight difficult. These new powers bestowed by Brussels could allow Mr Buchanan's team to go much further in protecting customers. Let us hope they use them well.