China Building Coal Stockpiles of 100 Million Tonnes, Calls For Greater Emission Cuts From Developed Nations

China is building four to six coal reserves each with capacity exceeding 20 million tonnes in order to address the problem of shortage of the fuel. Meanwhile, Chinese officials also called upon the leaders of developed nations to set ambitious carbon emission reduction goals.

China is the world’s largest coal producer and consumer but lately the demand has outpaced supply, a trend likely to continue into the next year. To address this gap in demand-supply China’s National Development and Reform Commission (NDRC) has planned to build coal reserves in the the eastern province of Shandong which will be ready within three to five years. According to the officials of the NDRC, the stockpiles are meant for use with the province only and China has substantial coal supply on the national level.

Coal remains China’s primary source of energy and it is also exported to many neighboring countries as well. Easy and plentiful availability of coal is one of the major reasons behind China’s strong resistance to any kind of emission reduction targets. Instead, officials from the NDRC itself called upon the developed nations to commit to more ambitious emission targets closer to 25 to 40 percent by the year 2020 from 1990 levels.

Reports about shortage of coal reserves have been doing the rounds lately with some of them predicting a peak in coal supplies by 2025. India, too, has been facing shortage of coal.

How About a Global Carbon Labelling Law?

The Copenhagen round of talks aimed at building a consensus about the features of the next climate treaty is scheduled to take place this December however, there seem to be no signs of consensus over how the world should proceed to reduce its carbon emissions. Which tool would be most effective? Clean Development Mechanism, a global carbon tax or maybe a global carbon labelling law?

Clean Development Mechanism has been tried, tested and, well, has been branded somewhat ineffective by not only the people outside the system but the people who are actually a part of it, the United Nations Framework Convention on Climate Change (UNFCCC). Bureaucratic delays, procedural wrongdoings in approval of projects and failure to make any difference at the grass-root level are some of the well known problems with this scheme.

The European Union has proposed that the CDM be replaced by a global carbon tax. United States saw a national carbon tax bill introduced in the Congress. The bill calls for levying an ‘carbon equivalency fee’ on imported products, in addition to the nationwide carbon tax in order to neutralize the losses incurred by domestic manufacturers. China has opposed this move saying that the developed countries are in part responsible for the emissions as they are the end users.

Al Gore Hopes Obama’s Radical Measures Would Bring the World Closer to Climate Deal

Al Gore in a scene from his documentary An Inconvenient Truth

Speaking at the International Climate Change Congress, the former US Vice President and imminent environmental activist Al Gore expressed hope that a broad consensus on a new and ground-breaking climate deal would be reached soon. Al Gore pointed out the new steps initiated by the current US President Barack Obama, to promote renewable energy and reducing carbon emissions, as one of the main reasons for an emerging possibility of successful negotiations for a new climate deal. 

President Obama has been quite aggressive in breaking away from the policies of his predecessor, President George W. Bush. His administration has answered to the critics of United States’ climate policy (or the lack of it!). No doubt the confidence among the environmental activists, like Gore, is high given the revolutionary measures announced by President Obama. 

The European Union has been eagerly waiting for some kind of cap and trade scheme from the United States so that the much needed credit to finance the technology transfer from developed nations to poor nations could obtained. 

The European Union is also looking at the United States to pass a carbon tax bill which eventually could form the foundations of a global carbon tax effective enough to replace the current Clean Development Mechanism of offsetting carbon emissions. A national carbon tax in the United States would put pressure on rest of the world and especially the advanced developing countries like India and China to agree to a global carbon tax, and possibly mandatory emission reduction targets. 

The Obama administration has also pledged billions of dollars of investments in renewable energy in the form of direct infrastructure spending in building wind farms and solar power plants, tax rebates to families who wish to install solar panels and in research & development of new and affordable forms of renewable energy. 

The steps taken by the United States may very trigger steps from the European Union to adopt stricter carbon emission reduction targets potentially laying foundations of long-term targets. 

For the first time in almost a decade the United States has acknowledged its responsibility as being the one of the largest polluters in the world. India and China have long accused United States of being negligent towards its duty to act decisively on critical environmental issues. Now that the times have changed the pressure to act is now on the developing nations.

Image: Juampe López (Creative Commons)

Europe Argues Over Funding Emission Reduction Projects in Poor Countries

The European Union is in a tussle over how the emission reduction goals be set under the next climate treaty, discussions for which are scheduled to talk place at Copenhagen in December this year.

Two ways put forward are

money raised through the auction of pollution permits in carbon markets around the world, or a mechanism whereby funds are levied according to a country’s economic strength, population growth and emissions.

Many EU nations like Poland are opposed to any strict emission reduction goals. Poland which has vast reserves of coal has made it clear that it would oppose decision which could hamper its efforts to tap its coal reserves.

“We’re against the subsidy plan, we’re open to talks, but the proposal will have to be changed if it’s to win our agreement”, said Polish Environment Minister Maciej Nowicki. Poland also has protested a separate EU plan to tighten emissions-trading rules that would boost costs for coal-burning power generators.

Poland is unwilling to either buy emission rights or pay taxes for carbon emissions generated by its coal-powered energy plants.

EU has also put forward a plan wherein the Clean Development Mechanism is to be replaced by carbon tax which would be levied on the developed (and possibly ‘advanced’ developing nations) for exceeding emission limits set under the new climate treaty.

Developing countries like India and China are opposed to any mandatory emission cuts and want developed countries to adopt stricter emission reduction goals as they have a ‘historical responsibilty‘ to the state of the current state of the environment. 

The European Union is also eyeing the cap-and -trade scheme announced by President Obama. 

It would be interesting to see how the European Union assembles the financial resources to make the emission reductions globally effective.

Europe Plans $200 Billion Climate Tax on Developed Nations

With eyes on the Copenhagen talks for discussion on the next climate policy, the European Union plans to propose a tax on the carbon emissions of the developed nations, a move which could generate more than $200 billion by 2020. These funds will be used in helping developing and poor nations move from fossils fuels based energy systems to those based on renewable sources.

The European Union proposes that carbon offsetting through the trade of carbon credits under the Clean Development Mechanism be phased out and replaced by a scheme under which the developed nations would commit to cut their but would also pay taxes for extra emissions. The proposal also calls for a similar scheme for the ‘advanced developing nations’ like India and China but fails to clarify its nature.

Carbon offsetting cannot be pursued as a long term solution to mitigate the global carbon emissions and thus the Clean Development Mechanism should be seen only as a transformational step and not the solution to the problem. Replacing carbon offsetting with binding emission reductions seems to be the obvious next step but one has to ask if the world can afford a climate tax at this time of economic meltdown.

UN Plans to Introduce New Carbon Offsetting Scheme For Saving Rain Forests

The United Nations plans to introduce a new market-based emissions trading scheme which would allow developed nations to buy credits from countries having vast stretches of rain forests. The UN hopes that the new scheme would help reduce deforestation and restore the depleting resource of rain forests.

Called the Reduced Emissions from Deforestation and Degradation, REDD, the emission permits would be traded in a way similar to the Certified Emission Reduction permits. The REDD permits would help raise funds for restoring the fast depleting rain forests in the African, South American and South East Asian countries and in return the developed nations would be able to achieve the set emissions reduction goals. The UN plans to include this scheme in the next climate treaty which would follow the Kyoto Protocol.

But there are several problems with the basic model of the REDD emissions credits which would work principally in the same manner as the Kyoto carbon credits scheme. UN administrators have themselves admitted that the current carbon emissions trading mechanism should be made more transparent and effective. In addition, global banking giants have also slammed the Clean Development Mechanism saying that it is plagued by unnecessary delays and bureaucratic hurdles.