European Union Rejects Carbon Market Solution

The Nicholas Institute for Environmental Policy Solutions at Duke University
The Nicholas Institute for Environmental Policy Solutions at Duke University

Editor’s Note: The Climate Post will take a break from circulation next week. We will return to regular postings May 2. 

The European Union Parliament rejected a proposal to backload the auctioning of credits within its Emissions Trading Scheme this week. The proposed “backloading” plan would have removed a surplus of emissions permits from the world’s largest carbon market—potentially saving it from collapse and making fossil fuels more expensive for utilities and factories to burn. The surplus, partly a result of the recession, had driven carbon prices down from 25 euros in 2008 to just 5 euros per ton in February. As a result, the permits were no longer doing their intended job of encouraging manufacturers and utilities to invest in cleaner fuels and new technology. Announcement of the ruling sent permit prices to their lowest yet and dealt a blow to partner Australia. The country intends to link to the EU carbon market in 2015.

“We will continue with our plans to link with the European emissions trading scheme from 1 July, 2015,” said Australia Climate Minister Greg Combet. “But this year’s budget, as is usual practice by Treasury, will include a revised forecast for a carbon price in 2015-16.”

On Wednesday, EU Commissioner for Climate Action Connie Hedegaard vowed to fight to save the system through new measures that include restricting rights to carbon permits and allowing for reviews of the number of permits companies receive for free.

EPA Says U.S. Greenhouse Gas Emissions Declined

A new report by the U.S. Environmental Protection Agency (EPA) suggests greenhouse gas emissions in the United States dropped 1.6 percent from 2010 to 2011. Since 2005, that number has decreased 6.9 percent. The agency attributed the drop to factors such as improvements in vehicle fuel efficiency and mild winter weather.

Electricity generation by power plants was termed the largest source of emissions, accounting for 33 percent of the 2011 total, according to the report. The EPA missed an April 13 deadline to issue a final rule limiting greenhouse gas emissions from new power plants, instead delaying release indefinitely on Friday. In its draft form, the rule would have made building new coal plants difficult. The Washington Post indicated that the EPA will alter the rule to better withstand legal challenge, including potentially establishing separate standards for gas-fired and coal-fired plants.

Meanwhile, little progress has been made to reduce the carbon content of the world’s energy supply over the last two decades, according to the International Energy Agency (IEA). In its third annual report tracking clean energy progress, the IEA found the resurgence of coal counters many of the greenhouse gas benefits of clean energy production. “The drive to clean up the world’s energy system has stalled,” said IEA Executive Director Maria van der Hoeven. “Despite much talk by world leaders, and despite a boom in renewable energy over the last decade, the average unit of energy produced today is basically as dirty as it was 20 years ago.” Renewables are a bright spot in the data, which reveal that solar and wind technologies grew by 42 and 19 percent, respectively, from 2011 to 2012.

Nuclear Leak Prompts Review, New Guidelines

The International Atomic Energy Agency (IAEA) has begun reviewing the decommissioning process for Japan’s Fukushima Daiichi nuclear plant, the site of a 2011 nuclear meltdown following a tsunami. Multiple leaks have been detected at the plant, and the IAEA will be analyzing the melted reactors and radiation levels.

The EPA, meanwhile, has been prompted by the disaster to rewrite rules to enlarge the focus of U.S. nuclear disaster response beyond immediate emergency response to long-term cleanup efforts. A new draft of recommended procedures will address the duration of evacuations, limits to radiation exposure over time and other concerns.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.