Externalities

It’s shaping up to be a crucial week in climate politics.

At the centre stands the EU, cast, in this guise, as climate champion - determined to take a small step towards charging airlines for the full environmental costs of flying, and to tax highly-polluting forms of fossil fuels.

Attacking the EU from every side is a large number of countries with serious clout.

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If the EU is successful on either of these issues, it opens the door to other measures.

One idea that’s been batted around for years is some kind of border adjustment.

So country A levies charges on emissions from companies making a certain type of goods.

Country B doesn’t have any such charges. So when Country A imports that type of goods from Country B, it imposes a tariff to compensate.

You can see immediately why it’s controversial; not least because if such measures came into use for climate change, might countries also try to impose them for other reasons? How far would it go before it became protectionism?

That’s why all kinds of observers from environment groups and business lobbies will be watching this week’s events like hawks.

A Japanese diplomat recently showed me a chart he’d drawn up where the positions of various countries and blocs were marked on a two-dimensional grid.

One axis showed how keen they were on taking more emission cuts under the Kyoto Protocol (KP), the other how keen they were to see negotiations begin on a new global instrument covering emissions by all nations.

Japan itself sits at one diagonal extreme - very keen to get cracking on a new agreement, very unkeen on more cuts under the KP. Russia sits alongside.

At the opposite extreme is the powerful Basic bloc - Brazil, South Africa, India and China - very keen on seeing Japan and its rich counterparts get fully back inside the KP, not keen on starting talks on a new agreement.

Small island states want a bit of both; the US and Canada want neither.

And the EU… is tired of being taken for granted and refuses to be the only important member of a post-2012 KP. I suspect the best thing the Durban meeting could do is to definitively kill off any prospect of continuing the KP past 2012, rather than dragging out the debate only to reach the same conclusion in a year’s time.

“Those countries that are currently talking about deferring an agreement [to come into force] in 2020 are essentially saying we are taking you from high risk to very high risk in terms of the effects of global warming. This is a choice – a political choice.”

The UK government’s contention is that if countries know a new agreement is due in 2020, they will need to take strong action on reducing emissions before then in order to meet their new commitments. This should, according to the official view, ensure that emissions peak by 2020, which is the outer limit of what scientists have advised if the world is to stay below 2C of warming, beyond which global warming becomes catastrophic and irreversible.

However, this depends not only on a new agreement being signed in 2015-16, but on countries agreeing to toughen their emissions targets in line with scientific advice. UNEP showed this week that there remains a large gap between the emissions cuts pledged and those that are required.

Pissing away an entire decade is nothing to international diplomats.

(even without accounting for externalities)

The cost of electricity from onshore wind turbines will drop 12% in the next five years thanks to a mix of lower-cost equipment and gains in output efficiency, according to new research from Bloomberg New Energy Finance.

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Taking these factors together, the levelised cost of energy – the cost of energy before any subsidies or support mechanisms are applied – produced from onshore wind turbines has fallen by 14% for every doubling of installed capacity between 1984 and 2011. So the levelised cost of energy from onshore wind has fallen in 2011 real terms over this time period from EUR 200/MWh to EUR 52/MWh. This is only EUR 6/MWh more expensive than the average cost of a combined-cycle gas turbine plant in 2011. That figure for gas-fired power excludes the cost of carbon emitted - if that were included, wind would already be at grid parity.

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“The press is reacting to the recent price drops in solar equipment as though they are the result of temporary oversupply or of a trade war. This masks what is really going on: a long-term, consistent drop in clean energy technology costs, resulting from decades of hard work by tens of thousands of researchers, engineers, technicians and people in operations and procurement. And it is not going to stop…”

Via this Guardian article which also points out that offshore wind energy is much more expensive (is it worth it, NIMBYists?).

Despite the drop, this remains horrific if the figures are to be believed. £2 a day?! Isn’t that more than what half the world’s population earns (and therefore more than the total they have to compete with us in the food market)?

experts at the Royal Horticulture Society (RHS) said confused plants started to flower again due to the unseasonably warm weather.

Strawberries and rhododendrons were among the plants seen blooming at its flagship garden in Surrey when they were not expected to flower again until next spring.

Getting away from that ghastly debt ceiling business, here’s some good news!

Obama confirmed that automakers would be required to deliver an average fuel efficiency for their US fleets of 54.5 miles per gallon by 2025. …a significant step up from current standards which require automakers to deliver average efficiency of 35.5 mpg by 2016.

Obama went so far as to call this “the single most important step we’ve ever taken as a nation to reduce our dependence on foreign oil” (around a 10% reduction?) … “while White House figures have suggested that the new regime would help cut US carbon emissions by more than six billion tonnes over the next 15 years”.

If that last figure can be trusted, that’s really something; equivalent to over one tonne of CO2 per American per year* when averaged out over that time period, or the country’s entire emissions for one year at current rates. It would be a very significant contribution to the target of a 17% total emissions reduction by 2020 - perhaps making up half or more of that! Do correct me if I’m wrong.

* I believe US per-capita figures are around 19-20 tonnes: a reduction of one is significant but 19-20 is still much higher than it needs to be. These standards represent low-hanging fruit no longer available to less “exceptional” developed countries!