Latest thinking by the energy and climate department (DECC) over climate change agreements (CCAs) smacks of blue-sky thinking. It has floated ideas not only to reform but even potentially to scrap the instruments. The government should be careful before reinventing this particular wheel.

Last December, DECC organised a closed workshop including representatives of sectors covered by CCAs to discuss their future. It released a report on the meeting last week.

There is general consensus that CCAs need reform. The voluntary agreements to cut emissions now signed with 52 industry sectors have various shortcomings. These include difficulties with monitoring and benchmarking of progress and an uneasy mixture of absolute and relative targets in different agreements. (more…)

2010 has been a bad year for the climate.

Not just for climate treaty negotiations – few expect a deal in Cancún in Mexico this December after the failure in Copenhagen last December. But also for the carbon markets that ultimately depend on strong policies.

Huge interests are at stake. Pioneering investors feel let down and are warning they could go to the wall. The uncertainty could go on until Cancún, or even longer.

This is on top of uncertainty over the post-2012 status of the UN clean development mechanism. The CDM’s future is further clouded by European Union proposals to stop many types of UN offsets from entering the EU Emissions Trading Scheme after 2012.

Why should we worry? There are several reasons. (more…)

The chances of even an outline global climate deal at Cancun in December 2010 look slim after America’s Democrats failed to garner the 60 votes needed for a cap and trade bill in the dying days of July. Short of a miracle, President Obama will in effect go naked into that conference chamber.

The passage of the House of Representatives bill in 2009 was a high watermark (ENDS Report, May 2009). Since then, the US Senate, which must also get a version through before a unified bill can pass into law, has struggled against strong fossil fuel interests (ENDS Report, June 2010). (more…)

Traditionally, research, development and training are among the first things to go in hard times. Squeezed by falling sales, businesses look to consolidate by relying on mature technology.

This pays in the short term but provides little hope of competing with new technologies, often developed overseas, when good times return. And government investment in basic research, which translates only indirectly into cash in the long term, is another soft touch.

Why does this matter? Because if we really are serious about a more diverse, energy-efficient and low-carbon economic recovery then we must stop expediently cutting back the wrong shoots when we look to make savings.

And even where the investment means continued borrowing in the short term, we need to recognise that there is nothing wrong with that if it transforms the economy and provides the future jobs so desperately needed. (more…)

Ever since the European Union introduced the world’s first mandatory greenhouse gas cap-and-trade scheme in 2005 it has faced complaints that by setting a price on carbon it would drive heavy industries away.

The financial crisis and recession, plus the failure of the Copenhagen climate summit to agree a post-2012 global climate policy framework have pushed this issue of ‘carbon leakage’ way up the political agenda.

I explore the rights and wrongs of the whole issue at length in a new feature article, which will appear in the June edition of the ENDS Report.

The critical context is the decision facing Europe of whether it should increase its 2020 climate targets from a 20% reduction relative to 1990 to 30%. And the burning question is whether raising the target would add to carbon leakage. (more…)