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The new language of Climate Change | Climate Change Lawyer

The new language of Climate Change | Climate Change Lawyer

New international method of funding Climate Change brings significant business opportunities to the UK. The following article is from the seminar that Jeremy Barnett gave at the Energy and Environment Expo Academy on 18. June 2014.

Jeremy was a keynote speaker at the Energy and Environment Expo Academy, held at Exel in June 2014.

Click Here to download the powerpoint presentation.

Government across the world are planning to underwrite the innovation projects and policies of developing nations to attract eye-watering sums required for Green House Gas abatement programmes.

NAMAs – Nationally Appropriate Mitigation Actions will underpin the new Green Development fund that aims to have in place $100 billion by the end of the year, all of which will be contributed by the developing nations. Wall Street and London private capital will then be targeted as new bonds and instruments replace the private sector ETU certificates that are being traded in carbon markets.

The current CDM (Clean Development Mechanism) is seen to be unsatisfactory for a number of reasons including lack of transparency and fraud, as well as the collapsing price of carbon and the current small capacity that can only handle 400 projects per annum with a total spend on abatement projects of $6 billion. The new NAMAs are governed by the UNFCCC [ United Nations Framework Convention on Climate Change] and the Bali Action Plan.

Large sums have already been pledged by developing countries with the UK and German setting up a €70m ‘NAMA facility fund’, announced in Doha that is currently investing in four projects. Examples that will be covered in the seminar include a $22m deforestation project in Colombia using satellite imaging and land use mapping in a $10m project in India.

There have already been 90 applications for NAMA’s from developing nations around the world, with projects targeting deforestation, building of eco homes, new resilient energy networks and Carbon Capture Storage.

All new projects have to be beyond reproach, hence the new industry of MRV - (Measurement, Reporting and Validation) that will grow up, as nations establish procedures to ensure that there are real benefits to be gained, rather than the opaque scheme that is currently being managed in which Chinese firms are suspected of being paid huge sums of money to continue belching out carbon into the atmosphere with little or no oversight. 

The language

In order to understand the landscape, it is important to learn the new acronyms that have been invented. The following list is a good starting point.

       IEA – International Energy Agency

       CDM  - Clean Development Mechanism

       UNFCCC  - United Nations Framework Convention on Climate Change

       BAU – Business As Usual

       IPCCC – Intergovernmental Panel on Climate Change

       COP – Convention of the Parties.

       NAMA - National Assisted Mitigating Action

       MRV   -  Measurement   Reporting Verification.

       GPG- LULUCF - Good Practice Guidance for Land Use, Land Use Change and Forestry 2003;

       REDD and REDD +  - reducing emissions from deforestation and forest degradation

       FCMC  - Forest Carbon, Markets and Communities programme

       CCS  -  Carbon Capture Storage

       BECCS  - Bioenergy CCS

NAMAs and MRV.

Nama’s first appeared with the Bali Action plan and can be either a set of policies, a strategy or a project taken by a developing nation to reduce Green House Gas emissions.

The key issue is that these are national schemes rather than private sector initiatives as with the CDM, and have to be subject to stringent MRV. It is anticipated that this step will prevent the widespread allegations of fraud that are surfacing with carbon trading – see for example the Financial Conduct Authority website that there is no viable secondary market for ordinary investors to sell or trade carbon credits, despite claims and promises being made by many firms advisers and brokers. It is therefore recommended that ordinary investors avoid the entire market without expert advice.

More importantly, the FCA make it clear that the two problems are that the majority of schemes are abroad and ‘authorities in the UK have no way of controlling the quality or validity of the schemes.’   Hence the need for independent and robust MRV systems in the brave new world.

The UNFCCC Nama registry shows that there have been 90 applications under development and 8 in implementation, most in Latin America. They deal with energy supply, waste, building and deforestation. Initial funding has been provided by developed (Annex 1) nations for example the UK/German ‘ NAMA Facility Fund’ which will provide €70m in relation to 4 projects.

The plan is to raise $100m in the Green Development fund every year, starting with 2014 from the Annex 1 countries, then begin to raise money from the private sector by the use of bonds or other financial instruments

REDD and REDD+

Deforestation is one of the main causes of growing GHG emissions. Forests still cover 70% of the world’s land area, but huge swathes, (18 million acres) the size of Panama are being lost every year. Business as Usual ( BAU) is not an option as the world’s forests help regulate the climate and sequester and store 375 billion metric tons of carbon, and any further substantial loss will have dramatic effects

Deforestation is one of the main causes of growing GHG emissions. Forests still cover 70% of the world’s land area, but huge swathes, (18 million acres) the size of Panama are being lost every year. Business as Usual ( BAU) is not an option as the world’s forests help regulate the climate and sequester and store 375 billion metric tons of carbon, and any further substantial loss will have dramatic effects.

MRV plays an important part in this difficult subject as the Green Climate fund was established to ‘prime the pump’ before the market based approach was adopted.  Techniques such as remote sensing and ground based observations have been approved as reporting has to follow the guidance known as Good Practice for Land Use, Land Use Change and Forestry [GPG-LULUCF] which requires verification of the GHG inventory to be;

  • Transparent
  • Complete
  • Consistent
  • Comparable and
  • Accurate

so that inventory planning, preparation and management can be developed in a consistent manner across all regions.

CCS

Carbon Capture Storage is now seen as the other great solution to increased GHG emissions around the world. The UK has thrown its lot in by the announcement of a £1 billion fund that is supporting the first demonstrator project at Hatfield, Doncaster and Drax Powerstation, supported by 164 million from the EU.

The IEA predict that 19% of global emissions reduction could result from full scale adoption of CCS technology, but the current ETS scheme does not support such development. So far $23 billion has been invested in CCS technology around the world, but the sums of money required are truly staggering. For example, it is predict that over $3 trillion is required to ‘prime the pump’.

Numerous proposals have been made to fund the development of this technology including the new BECCS – Bioenergy CCS which uses techniques such as the use of Biochar to break down the CO2   into other materials such as fertiliser that can be reused, rather than purely sequestering the unwanted carbon underground.

Conclusion

With so much international action needed, climate change prevention is almost putting business opportunities on a plate for those who understand the importance of the new technology and the new MRV requirements, but the key to exploiting these is learning the new language of climate change and knowing what international legislation demands.

For any advice and assistance for issues like these please do call Jeremy on 0844 2722322 or submit a comment below. Jeremy will come back to you at the earliest convenience.

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