World emissions rise, carbon markets fail
Global greenhouse gas emissions rose faster than ever last year and the market-based schemes set up to bring emissions down are in trouble. That’s the bad news from two recent reports by the International Energy Agency (IEA) and the World Bank.
The IEA said emissions in 2010 were 5% higher than 2008, the previous highest year. It estimated that about 44% of the emissions came from coal, 36% from oil and 20% from natural gas.
It also said 80% of projected emissions from energy generation in 2020 “are already locked in as they will come from power plants that are currently in place or under construction today”.
IEA chief economist Faith Birol said on May 30: “This significant increase in CO2 emissions and the locking in of future emissions due to infrastructure investments represent a serious setback to our hopes of limiting the global rise in temperature to no more than 2ºC.”
To stay below 2°C, the IEA said emissions had to rise by less in the next 10 years than they had in the past 12 months.
“The world has edged incredibly close to the level of emissions that should not be reached until 2020 if the 2ºC target is to be attained,” said Birol. “Given the shrinking room for manoeuvre in 2020, unless bold and decisive decisions are made very soon, it will be extremely challenging to succeed in achieving this global goal.”
A 2°C temperature rise target was endorsed by most nations (except Bolivia) at the 2010 UN climate talks in Cancun, Mexico. It is also the Australian government’s official target.
Even though the 2°C limit is set to be breached, climate scientists and poorer nations have long argued that 2°C is still too high a target, which could trigger runaway global warming, change weather patterns and condemn low-lying island nations to disappearing beneath the waves.
UN climate chief Christiana Figueres endorsed this position on June 1. The Guardian reported that she told a major international conference on carbon trading in Barcelona: “Two degrees is not enough — we should be thinking of 1.5°C. If we are not headed to 1.5 we are in big, big trouble.”
But the UN’s chosen method to tackle climate change — carbon trading and carbon offset schemes — is also in big trouble.
At the same conference, the World Bank released its State and Trends of the Carbon Market report, which said the market for the Kyoto Protocol’s Clean Development Mechanism (CDM) carbon offsets had fallen by 46% in 2010 — its lowest level since the scheme began in 2005.
There is little reason to think the CDM market has helped to cut emissions in any case. A 2008 paper by Stanford University’s Michael Wara and David Victor said: “In practice, much of the current CDM market does not reflect actual reductions in emissions.”
Carbon Trade Watch’s Kevin Smith explains the problems with CDM’s in the video below.
Despite the evidence showing market schemes are not helping to cut emissions, Figueres told the audience of bankers and carbon traders that they were “visionaries”.
“Some may be tempted to consider the carbon market a thing of the past,” she said. “I do not. While the future scope may be as yet unclear, I see many signs that the market is, in fact, in the process of reinvigorating itself.”
The UN will meet again in Bonn, Germany, from June 6 to 17 for a new round of international climate negotiations. Few expect it to make any progress.