China Announces Long-Awaited Carbon Market Plan

The Nicholas Institute for Environmental Policy Solutions at Duke University

Editor’s Note: The Climate Post will not circulate next week in observance of the holiday. It will return on January 4, 2018.

China, the world’s top polluter, unveiled plans for an emissions trading scheme on Tuesday.

This carbon market, which would allow facilities to trade credits for the right to emit planet-warming greenhouse gases, would initially start with China’s power sector. It would include approximately 1,700 utilities that each emit more than 26,000 tons of carbon a year—adding up to more than 3 billion tons of carbon emissions annually. Experts indicate it will take at least a year for the program to get underway, although the National Development and Reform Commission (NDRC) gave no hard deadlines for launch. Over time, China is expected to gradually tighten annual allocations to force up the emissions credit price.

“Everything is gradual, step by step,” said Li Junfeng, a senior government adviser on the carbon market plan.

Nine regions and cities, including Jiangsu, Fujian and seven regions with pilot schemes, will coordinate to establish the program, the NDRC said.

Although details of the market’s expansion have not yet been released, once the market is fully operational, it is expected to cover eight sectors: power; iron and steel; non-ferrous metals, such as aluminum; chemicals; petro-chemicals; paper; building materials; and civil aviation. Designed to encompass as much as 40 percent of the nation’s total emissions, the program aims to be more than twice the size of the European Union’s emissions trading scheme.

Efforts to Replace the Clean Power Plan Underway

The U.S. Environmental Protection Agency (EPA) released an Advance Notice of Proposed Rulemaking for the Clean Power Plan Monday, asking the public to comment on what a replacement rule might look like. In October, the Trump administration proposed repealing the Obama-era rule, which sets state-by-state carbon reduction targets for power plants.

“EPA is considering proposing emission guidelines to limit greenhouse gas (GHG) emissions from existing electric utility generating units (EGUs) and is soliciting information on the proper respective roles of the state and federal governments in that process, as well as information on systems of emission reduction that are applicable at or to an existing EGU, information on compliance measures, and information on state planning requirements under the Clean Air Act (CAA),” the notice reads.

The notice followed an announcement Friday that the EPA plans to terminate the rule in 10 months. The agency has suggested that it could have a replacement by October 2018. The news came as part of a broader Trump administration agenda to retract many environmental and other regulations.

Studies Strengthen Link between Human-Caused Climate Change and Some Extreme Weather

On the heels of an announcement by the Trump administration that climate change would be removed from the list of national security threats, new studies are pointing to further connections between global warming caused by human activities and past extreme weather events such as heat, drought, flooding and wildfire outbreaks.

A United Kingdom Energy and Climate Intelligence Unit (ECIU) analysis of 59 studies published in the last two years examined the influence of climate change on extreme weather. It suggests that warming worsened that weather in 70 percent of cases.

A separate group of studies published last week in Explaining Extreme Events in 2016 from a Climate Perspective, a special supplement to the Bulletin of the American Meteorological Society (BAMS), analyzed 27 extreme weather events from 2016, the hottest year in recorded history, and found that human-caused climate change was a “significant driver” for 21 of them.

Many of the BAMS studies found a strong likelihood of a human influence on extreme weather events but stopped short of saying they were outside the realm of natural variability, and not all of the studies linked 2016’s extreme events to human activity.

But it’s the first time in BAMS history that scientists have found some events that could not have occurred in the absence of global warming. According to the new reports, the three definitively human-caused extreme events in 2016 were the overall global temperature increase; record heat in Asia; and marine hot spots in the Gulf of Alaska, Bering Sea (where a mass of warm ocean water has been dubbed “the Blob”) and off the coast of northern Australia.

“For years, scientists have known humans are changing the risk of some extremes,” said Jeff Rosenfeld, BAMS editor in chief (subscription). “But finding multiple extreme events that weren’t even possible without human influence makes clear that we’re experiencing new weather, because we’ve made a new climate.”

 

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.

Decisions on Nuclear Plant Construction, FERC Directive Could Affect Grid’s Generation Sources

The Nicholas Institute for Environmental Policy Solutions at Duke University

Over the last decade, market upheavals and the technological advances underpinning them have placed pressure on existing electric generation units and driven deployment of non-baseload generation, creating significant uncertainty about existing business and regulatory models. This uncertainty calls into question the fate of nuclear. The Georgia Public Service Commission on Monday said it will decide December 21 whether to allow construction of two new nuclear reactors at the Plant Vogtle site to proceed or to call for the project to be canceled. Plagued by delays and escalating costs, the Vogtle reactors represent the only large-scale nuclear construction underway in the United States since abandonment of two reactors this summer by South Carolina Electric & Gas and Santee Cooper.

Those earlier plant cancellations and the looming Vogtle decision highlight the uncertain future of the U.S. nuclear industry. As much as 90 percent of nuclear power could disappear over the next 30 years if existing units retire at 60 years of operation—the current maximum length of operating licenses. A study by Duke University’s Nicholas Institute for Environmental Policy Solutions explores how the potential loss of existing nuclear plants in the Southeast interacts with the region’s other electricity sector challenges—among them, increasing natural gas dependence, demand uncertainty, and emerging technology—and proposes steps states can take to address these challenges.

Nuclear plants, along with coal plants, would get a boost in wholesale power markets if the Federal Energy Regulatory Commission (FERC) approves a proposal by Department of Energy Secretary Rick that would mandate that plants capable of storing 90 days of fuel supplies at their sites get increased payments for providing “resiliency” services to the grid. Proposed by Perry on September 28, the directive to FERC to change its rules was set to expire this week, but Perry has granted FERC 30 more days to make a decision on the proposal.

The extension request, made by newly sworn-in FERC chairman Kevin McIntyre, divulged that the agency’s public comment request resulted in more than 1,500 pieces of feedback from a wide array of energy stakeholders.

“[T]he Commission has sworn in two new members within the last two weeks. The proposed extension is critical to afford adequate time for the new Commissioners to consider the voluminous record and engage fully in deliberations,” McIntyre wrote in the letter to Perry.

Studies: Arctic Warming Unprecedented; Most Accurate Climate Models Predict Greatest Warming 

Two new studies point to the accelerating threat of climate change. One, an annual assessment of the Arctic released by the National Oceanic and Atmospheric Administration (NOAA), finds that the Arctic is warming twice as fast as the rest of the planet, a pace that holds national security and economic implications. The other, a study comparing the results of simulations from multiple climate models to satellite observations of the actual atmosphere, finds that climate models predicting the greatest warming are more accurate than those predicting less warming.

According to the Arctic Report Card, 2017 was the second-warmest year on record in the Arctic, behind 2016; sea ice maximum set a new record low; and the permafrost rapidly warmed. Most worrying to scientists, though, was the pace of change.

“The current observed rate of sea ice decline and warming temperatures are higher than at any other time in the last 1,500 years, and likely longer than that,” the report states.

The changes will affect the entire planet, but especially the Northern Hemisphere, by altering weather patterns, leading to reduced wind power and increased drought.

“The changes that are happening in the Arctic will not stay in the Arctic,” said co-author Jeremy Mathis, director of NOAA’s Arctic Research Program. “These changes will impact all of our lives. They will mean living with more extreme weather events, paying higher food prices and dealing with the impacts of climate refugees.”

The NOAA report comes on the heels of a study published in the journal Nature suggesting that international policy makers and authorities are relying on projections that underestimate future warming—and, by extension, are underestimating the cuts in greenhouse gas emissions needed to avert catastrophic climate change. According to that study, global warming projections for the end of the century could be up to 15 percent higher than previously thought.

“The basic idea is that we have a range of projections on future warming that came from these climate models, and for scientific interest and political interest, we wanted to narrow this range,” said study co-author Patrick Brown of the Carnegie Institution for Science. “We find that the models that do the best at simulating the recent past project more warming.”

According to the study, global temperatures could rise nearly 5 degrees Celsius by century’s end under the United Nations Intergovernmental Panel on Climate Change’s business-as-usual prediction for greenhouse-gas concentrations. Moreover, the analysis increases the odds that temperatures will rise more than 4 degrees Celsius by 2100, placing odds at 93 percent, up from 62 percent.

Clean Power Plan Alternative; More Hearings on Horizon

During his first congressional hearing since taking office in February, U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt told the House Energy and Commerce subcommittee that he is working on a replacement to the Clean Power Plan. Proposed to be repealed in October, the rule aimed to set state-by-state carbon reduction targets for power plants. No new details about the replacement rule were pressed for by the six subcommittee members, however.

If the EPA does not issue a replacement for the Clean Power Plan, it could hint that Pruitt might open up a legal battle over the 2009 carbon endangerment finding. During the hearing, Pruitt hinted that he may be skeptical of the analysis backing the finding, which found that greenhouse gases endangered public health and welfare and required the EPA to regulate carbon dioxide and other greenhouse gases.

“In fact there was something done in 2009 that in my estimation has never been done since and was never done before,” said Pruitt. “[The EPA] took work from the U.N. [Intergovernmental Panel on Climate Change or IPCC] and transported it to the agency and adopted it as the core of the finding.”

But as ClimateWire reported, the finding was informed not only by reports from the IPCC, but also from the U.S. Global Change Research Program, U.S. Climate Change Science Program and National Research Council as well as studies and reports from other independent research groups. In 2012, the U.S. Court of Appeals for the District of Columbia Circuit rebuffed a criticism that the EPA had “improperly delegated its judgment” to the IPCC and other organizations in the endangerment finding.

In written testimony submitted to the subcommittee, Pruitt elaborated the three goals of his Back to Basics agenda: “Refocus the Agency back to its core mission. Restore power to the states through cooperative federalism. Lead the Agency through improved processes and adhere to the rule of law.”

Following Pruitt’s subcommittee hearing, this week, the EPA announced it will now hold three more hearings on its proposal to repeal the Clean Power Plan—in California, Wyoming and Missouri—after the EPA was criticized for not conducting a transparent review process and holding only one public hearing over two days in Charleston, West Virginia.

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.

Moody’s Warns Cities, States to Prepare for Climate Change Risks

The Nicholas Institute for Environmental Policy Solutions at Duke University

A new report from Moody’s outlines how the credit rating agency will evaluate the impact of climate change in its ratings for state and local bond issuers. The report warns cities and states to prepare for climate change or face increased difficulty maintaining or obtaining higher credit ratings.

Ratings from Moody’s also help determine interest rates on bonds issued by cities to fund roads, buildings and other civic projects. Cities not adequately preparing for climate change, then, may face higher rates.

“The interplay between an issuer’s exposure to climate shocks and its resilience to this vulnerability is an increasingly important part of our credit analysis, and one that will take on even greater significance as climate change continues,” the report notes.

Moody’s uses six indicators to assess exposure to the physical climate change, including hurricanes and extreme-weather damage as a share of the economy, and the share of homes in a flood plain.

Moody’s identifies Florida, Georgia, Mississippi and Texas as the states most at risk for damage from climate change. It says it will assess both a city’s ongoing risk from climate trends and climate shock from extreme weather events such as natural disasters, floods and droughts.

“What we want people to realize is: If you’re exposed, we know that. We’re going to ask questions about what you’re doing to mitigate that exposure,” said Lenny Jones, a managing director at Moody’s. “That’s taken into your credit ratings.”

Mayors Sign Climate Charter

More than 50 North American cities signed the Chicago Climate Charter Tuesday during the North American Climate Summit in Chicago, where former President Barack Obama spoke, calling cities, states and nonprofit groups “the new face of leadership” on climate change.

“Obviously we’re in an unusual time when the United States is now the only nation on Earth that does not belong to the Paris agreement,” Obama said. “And that’s a difficult position to defend. But the good news is that the Paris agreement was never going to solve the climate crisis on its own. It was going to be up to all of us.”

The mayors, who attended the summit hosted by Chicago Mayor Rahm Emanuel, hailed from cities across North America, including Mexico City, San Francisco and Phoenix.

“Climate change can be solved by human action,” said Emanuel (subscription). “We lead respectively where there is no consensus or directive out of our national governments.”

The charter calls for mayors to achieve a percent reduction in carbon emissions at least as stringent as the Paris Agreement; to quantify, track and report emissions; to support flexibility for cities to take action on climate issues; and to incorporate climate issues into emergency planning, among other provisions.

The charter also calls for cities to work with scientific and academic experts to find solutions. Some mayors have specifically agreed to commitments to expand public transportation and invest in natural climate solutions such as tree canopy and vegetation.

Study: Melting Arctic Sea Ice Will Lead to Increased Drought in California

Scientists have linked rapidly melting Arctic sea ice to warmer ocean temperatures and higher sea levels. Now new research shows it could also reduce rainfall in California, worsening future droughts in the state. By mid-century, according to a study by Lawrence Livermore National Laboratory published Tuesday in the journal Nature Communications, loss of ice in the Arctic and warming temperatures there could drop California’s 20-year median for rainfall by as much as 15 percent.

“Sea-ice loss of the magnitude expected in the next decades could substantially impact California’s precipitation, thus highlighting another mechanism by which human-caused climate change could exacerbate future California droughts,” the study says.

The authors describe a series of meteorological events that lead to formation of storm-blocking air masses in the North Pacific—masses similar to the so-called Ridiculously Resilient Ridge, a nickname given to the persistent region of atmospheric high pressure that occurred over the Northeastern Pacific Ocean that kept rain from making landfall during California’s 2012–2016 drought. Although the study doesn’t attempt to explain that drought, its lead author, climate scientist Ivana Cvijanovic said it could help scientists understand future weather patterns.

“The recent California drought appears to be a good illustration of what the sea-ice-driven precipitation decline could look like,” she said.

Previous studies hypothesized that the North Pacific atmospheric ridge is due to increased ocean surface temperatures and heat circulation in the tropical Pacific. The new study elaborates on that understanding by describing the relation of Arctic sea-ice loss and tropical convection.

The authors say large-scale warming of the Arctic surface and lower atmosphere affects the way heat travels from Earth’s lower latitudes into the Arctic, in turn causing circulation changes in the deep tropics that eventually boost the buildup of a giant high-pressure system, like the Ridiculously Resilient Ridge, off the California coast. In normal winters, high and low-pressure systems alternate. But when there’s a ridge, the wet and wintry Pacific storms instead slide north.

“We should be aware that an increasing number of studies, including this one, suggest that the loss of Arctic sea ice cover is not only a problem for remote Arctic communities, but could affect millions of people worldwide,” said Cvijanovic.

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.