Bank of England Governor Warns Of Risks From Climate Change

The Guardian -  Larry Elliott

Bank of England governor tells Lloyd’s insurers that ‘challenges currently posed by climate change pale in significance compared with what might come’

Mark Carney said: ‘Once climate change becomes a defining issue for financial stability, it may already be too late.’ He proposes that firms ‘would disclose not only what they are emitting today, but how they plan their transition to the net-zero world of the future’. Photograph: Jonathan Brady/PA

Mark Carney, the governor of the Bank of England, has warned that climate change will lead to financial crises and falling living standards unless the world’s leading countries do more to ensure that their companies come clean about their current and future carbon emissions.
In a speech to the insurance market Lloyd’s of London on Tuesday, Carney said insurers were heavily exposed to climate change risks and that time was running out to deal with global warming.
The governor said that proposals would probably be put to the G20 meeting in Turkey in November urging the world’s leading developed and developing countries to bring in tougher corporate disclosure standards so that investors could better judge climate change risks.
“The challenges currently posed by climate change pale in significance compared with what might come,” Carney said. “The far-sighted amongst you are anticipating broader global impacts on property, migration and political stability, as well as food and water security. So why isn’t more being done to address it?”
Carney added that there was a growing evidence of humans’ role in climate change, noting that since the 1980s the number of registered weather-related loss events had tripled. Inflation-adjusted losses for the insurance industry had increased five fold to $50bn (£33bn) a year.
France will host the latest global attempt to combat climate change at a summit in December, and Carney added to the pressure for action by pointing to the threats to “financial resilience and longer-term prosperity. While there is still time to act, the window of opportunity is finite and shrinking”.
The governor, who is chairman of the Financial Stability Board, the international body set up by the G20 in 2009 to monitor risks to the financial system, said losses would be higher than expected if recent weather events proved to be the new normal.

A man by the Qiantang river after Typhoon
Dujuan hit China. Claims for flood damage
could affect financial stability.
Photograph: Imaginechina/Rex Shutterstock

“Climate change is the tragedy of the horizon. We don’t need an army of actuaries to tell us that the catastrophic impacts of climate change will be felt beyond the traditional horizons of most actors – imposing a cost on future generations that the current generation has no direct incentive to fix.
“The horizon for monetary policy extends out to two to three years. For financial stability it is a bit longer, but typically only to the outer boundaries of the credit cycle – about a decade. In other words, once climate change becomes a defining issue for financial stability, it may already be too late.”
Carney said there were three ways in which climate change could affect financial stability: physical risks, such as claims from floods and storms; liability risks that could arise if those suffering climate change losses sought compensation from those they held responsible; and transition risks caused by the revaluation of assets caused by the adjustment to a lower-carbon economy.
The governor said that global action to tackle climate change could have a profound impact on companies if their business models were challenged by the move away from fossil fuels.
“Take, for example, the International Panel on Climate Change’s estimate of a carbon budget that would likely limit global temperature rises to 2 degrees [centigrade] above pre-industrial levels.
“That budget amounts to between a fifth and a third of the world’s proven reserves of oil, gas and coal. If that estimate is even approximately correct it would render the vast majority of reserves “stranded” – oil, gas and coal that will be literally unusable without expensive carbon-capture technology, which itself alters fossil fuel economics.
“The exposure of UK investors, including insurance companies, to these shifts is potentially huge.”
Carney said that, following a meeting in London last week, the FSB was “considering recommending to the G20 summit that more be done to develop consistent, comparable, reliable and clear disclosure around the carbon intensity of different assets”.
One proposal, he added, was the creation of an industry-led group, a climate disclosure taskforce, to design and deliver a voluntary standard for disclosure by those companies that produce or emit carbon.
“Companies would disclose not only what they are emitting today, but how they plan their transition to the net-zero world of the future. The G20 – whose member states account for around 85% of global emissions – has a unique ability to make this possible.”

Fairfax Video

RAW VIDEO: Bank of England governor Mark Carney warns "climate change threatens financial resilience and longer term prosperity."

Shark Culling And Overfishing May Be Contributing To Climate Change

ABC - Sarah Sedghi

Research finds shark culling is contributing
to climate change (AAP: ScreenWest)

 New research has found that sharks play an important role in preventing climate change, warning that overfishing and culling sharks is resulting in more carbon being released from the seafloor.

A paper published in the journal Nature Climate Change has found that the culling and fishing of sharks and other large fish is leading to an overabundance of their prey, such as turtles, stingrays and crabs.
Larger numbers of these marine creatures means that vegetation which stores carbon is being eaten in greater quantities.
"Sharks, believe it or not, are helping to prevent climate change," said Dr Peter Macreadie, an Australian Research Council Fellow from Deakin University and one of the paper's authors.
Several years ago researchers found that carbon is stored in blue carbon ecosystems in the marine environment.
"They are the seagrasses, the salt marshes, the mangroves and they're among the most powerful carbon sinks in the world," Dr Macreadie said.
"So they will capture and store carbon at a rate 40 times faster than tropical rainforests like the Amazon and they'll store that carbon in the ground for millennial time scales."

He said as predators were culled and overfished, other marine life consumed more and more vegetation.

"Turtles, crabs, certain types of worms, stingrays — these animals that are overabundant to do with loss of predators used to keep their numbers in check," Dr Macreadie said.
The researchers used Cape Cod in Massachusetts as an example of where this process had been observed.
"There had been overfishing in the region, so a lot of the big fish had been removed and then what we saw was an increase — a remarkable increase, a huge increase — in the number of crabs that bury and borrow down in the system, in the salt marsh which sequestered all this carbon," Dr Macreadie said.
"And we'd found that in an area there, the crabs had become so abundant that they had pretty much destroyed the salt marsh, and it was a small area, it was only 1.5 square kilometres, but it liberated 250,000 tonnes of carbon that had been stored in the ground."

Release of ancient carbon would have 'catastrophic' effect
He said with the culling of huge numbers of sharks and other top ocean predators, researchers had discovered many other examples of this occurring.
"There's been some 90 per cent loss of the oceans' top predators and so we've learnt this link between sharks and other top predators and the cascading effects they will have down to other animals in those ecosystems that are eating themselves out of house and home.
"They're eating the blue carbon ecosystems that have sequestered so much carbon and this is causing release of ancient carbon as a consequence."
Dr Macreadie said it would have a catastrophic effect on the environment.
"We've only just scratched the surface here," he said.
"These blue carbon ecosystems are so critical for sequestering carbon and they support these important food webs, and when these food webs are disrupted it's a bit like playing a game of Jenga — you pull out a few pins and the whole thing falls apart.
"If we just lost 1 per cent of the oceans' blue carbon ecosystems, it would be equivalent to releasing 460 million tonnes of carbon annually, which is about the equivalent of about 97 million cars.
"It's about equivalent to Australia's annual greenhouse gas emissions.
"So I think it's time to take a good look at the way in which nature helps mitigate climate change for us and trying to do everything we can to let that natural process operate in full force, and if sharks are a part of that, if predators and a part of that we need to take that into consideration."

Australia Leads World On Household Solar … And On Coal

Renew Economy - Sophie Vorrath 

With 1.4 million households with solar PV installed, rooftop solar has been one of Australia’s renewable energy success stories – a fact that is celebrated in a new report by the Energy Supply Association of Australia.
The report, titled Renewable Energy in Australia – How do we really compare?, notes that while Australia is ranked sixth in the world for total solar per capita, it is number one when it comes to solar on rooftops.



And the ESSA fact sheet has plenty of nice graphics to illustrate this achievement.



“More than one in seven households now have solar PV systems mounted on their roofs, which is a 15 per cent penetration rate,” the report says.
And it shows that South Australia and Queensland are leading the charge, with an average of 25 per cent and 24 per cent of households with solar on their roofs, and some suburbs in Adelaide and Brisbane – like Virginia and Chandler – boasting more than 50 per cent household PV penetration.



“We have double the penetration rates of the next best country, Belgium, and more than three times the level in Germany, which is considered a leader in solar generation,” says ESAA chief Matthew Warren.
The report also shows that South Australia and Tasmania have some of the highest per capita wind generation in the world, alongside leading US states like Iowa and Texas.



The message from this analysis, argues Warren, is that Australia “has not been a laggard” on renewable generation.
“This analysis clearly (shows) that we are have made progress in terms of sourcing energy from wind and solar and this can be expected to continue,” he says.
It’s an interesting message, coming from ESAA, which has in the past lobbied to have Australia’s Renewable Energy Target reduced and, more specifically, for the removal of upfront payments under the small-scale technology component of the RET – a measure aimed squarely at slowing rooftop solar uptake.
It seems to suggest that Australia is tracking just fine in its shift to renewable energy, as it tackles the dual task of emissions reduction and the modernisation of its grid. But surely the ESAA is not arguing that Australia has done enough.
The chart below, which is included on ESAA’s fact sheet, tells another story: That Australia is also among the world’s leading consumers of coal power generation. Anyone else confused?

Australia’s $234 Billion Climate Gamble

The Climate Change Guy

As of last year, China and the US were first and third on the list of Australia’s trading partners. Australian trade with China was worth $152.53 billion - a total that has grown by 12.2% on average over the last 5 years. Australia’s trade with the US was worth $60.43 billion as of 2014, having grown 4% on average over the last 5 years.

See more on Australia’s trade figures here

In March this year, China raised a number of concerns regarding Australia’s Intended Nationally Determined Commitment (INDC) for greenhouse gas emissions in the lead up to the Paris Climate Summit in December. In particular, they queried whether replacing the planned Emissions Trading Scheme (ETS) and the Carbon Farming Initiative (CFI) with the Emissions Reduction Fund (ERF) will yield the reductions that were likely under those two. The US also queried whether the ERF will primarily replace the ETS or whether other Policies and Measures will be considered.
I discussed a number of issues regarding the ERF (the Flagship of the Australian Government Direct Action plan) and the first Auction in April this year in an earlier blog. The second Auction will be held on 4 and 5 November, which is approximately three and a half weeks prior to the Paris Summit. It is possible that news of the second Auction results will spread as widely and quickly as for the first, including to representatives of other nations attending the Summit. The representatives may be keen to quiz the Australian party on the results, particularly if the results are questioned as extensively in social media as the results of the first Auction were. This will be very interesting to watch indeed.

See more on the second ERF Auction here 

In the time since the first Auction, it is fair to say that a lot has transpired politically in an international and domestic context that highlights and brings into focus Australia’s stance on emissions reductions. In an international context, China and the US have progressed a deal on emissions reductions reached last November with discussions earlier this month, as a result of which many cities including Atlanta, Houston, New York, Beijing, Guangzhou and Zhenjiang have pledged new actions. A number of other nations have announced their INDCs in the lead up to Paris.
Last Friday (US time) Chinese President Xi Jinping announced a nationwide cap and trade emissions program as part of efforts to tackle climate change. Cap and trade programs cap the total emissions and sources including power stations and factories purchase and sell credits. In terms of the US, although plans for a nationwide cap and trade program were defeated in 2009, California and other north-eastern states have implemented emissions trading schemes.

See more on President Xi Jinping’s announcement here

Domestically, the Government has changed leadership resulting in the installation of Malcolm Turnbull as Prime Minister. Last week, in response to the announcement of China’s cap and trade program, Environment Minister Greg Hunt announced that the Government will stay the course regarding the ERF which is reported to be “the best, most effective scheme in the world”.

See more on the Australian Government response to China’s announcement here

 According to the Government, further reductions could be considered in 2017/18 as part of discussions on Australia’s 2030 target policy framework.


See more on Australia’s actions here

Given that China and the US (amongst others) have raised concerns with Australia’s commitment for Paris and have signed agreements to peak and reduce emissions respectively, I would be very surprised if they (and other nations attending the Paris Summit) would be prepared to give Australia until 2017/18 to consider further emissions reductions. I think it more likely that the US and China lead the charge in maintaining pressure on Australia to do more in the global challenge that is climate change.
Given the recent announcements by the Australian Government with respect to the state of the domestic economy and the discussions as to the exact nature of the problem, I struggle to fathom why they believe they can maintain one particular strategy and direction with respect to emissions reduction when an increasing number of countries are going in another.
If trade with China and the US continues on their current respective trajectories, by 2017, the combined figure is at approximately $233.7 billion (at a minimum) - $170.84 billion from China and $62.85 billion from the US. I don’t know if many Australians would be prepared to allow their Government to gamble such a figure on any matter - least of all emissions reduction specifically but climate change more generally, especially given the global nature of today’s economy. This is effectively what they are doing by continuing to ignore the rising tide of emissions trading.

China Announces National Emissions Trading Scheme – Experts React

The Conversation

Chinese President Xi Jinping has announced pledged to adopt a national emissions trading scheme from 2017. EPA/MICHAEL REYNOLDS/AAP

China has confirmed that it will launch its national emissions trading scheme.
In a joint US-China climate statement, issued as part of President Xi Jinping’s state visit to the United States, China confirmed that its new trading sytem will cover “key industry sectors such as iron and steel, power generation, chemicals, building materials, paper-making, and nonferrous metals”.
Below, our experts react to the development.

---

John Mathews, Professor of Strategic Management, Macquarie Graduate School of Management, Macquarie University
Xi Jinping is scoring a propaganda coup by announcing China’s intention to introduce a national cap-and-trade scheme in 2017, while he is a guest of Obama at the White House. It will not be lost on observers that China will be introducing the very kind of scheme that failed to get through the US Congress, passing the House but being defeated in the Senate.
How interesting that China the communist country is introducing the kind of market-based emissions trading scheme that the United States was unable to launch.
There are two further points to make. The first is that China is introducing its national scheme after trying out various options as local and city-level experimental schemes over the past couple of years. In 2012, pilot programs were initiated in seven provinces, and have been closely monitored since. Here China is teaching the world a lesson in how to introduce reform: first try it out at a small scale in a variety of forms, and then scale up the most successful.
Second, China is not relying on these market-led cap-and-trade initiatives alone. It is also reducing coal consumption in its power sector through direct state intervention, and has been actively promoting solar photovoltaic and wind power through state-guided targeted investment, national planning, and local promotion programs. So the new scheme will take its place as an initiative that helps to solidify China’s trajectory towards greening its energy systems – after direct state action has done the heavy lifting.

Anita Talberg, PhD candidate, Australian-German Climate and Energy College, University of Melbourne
China’s greenhouse gas emissions represent a quarter of the global total. For this reason alone, any tangible progress on Chinese climate action is encouraging. However, what is more promising is what a Chinese emissions trading scheme could mean for the world.
To date we have only seen pockets of emissions trading across the globe; most notably the EU has had a scheme since 2004 and a Californian system has been operating since 2013. Despite concerted efforts, there has been very little headway in linking regional emissions trading schemes. This is because carbon credits would become fungible.
So if one market crashes, so do the connected markets. The entire system is only as strong as the safeguards in the weakest market. The environmental effectiveness of the entire system is only as credible as the monitoring and verification in the least stringent scheme.
The EU and the rest of the world will be looking closely at the integrity and robustness of the Chinese market’s design. If China gets it right, and can elicit enough buy-in, it could represent a turning point for climate change.

Peter Christoff, Associate Professor, School of Geography at University of Melbourne
The announced introduction of China’s national emissions trading scheme in 2017 places irresistible pressure on Malcolm Turnbull to revisit the issue of an Australian ETS.
When China joins the European Union (the world’s third biggest aggregate emitter) and a number of other major emitting countries and states using cap-and-trade schemes to help cut emissions, some 40% of total global emissions will be covered by carbon markets.
Tellingly, Chinese President Xi Jinping made his announcement at a joint White House Press Conference with President Obama. Together they emphasised how the world’s two largest emitters are now collaborating closely to tackle global warming. Pressure is building within the US to create a national integrated scheme on the foundations of its regional efforts, and other major emitters, like Brazil and Russia, are contemplating similar measures.
Australia’s Direct Action Plan cannot easily be linked to this growing global carbon market. Its underfunded “reverse auction” process cannot acquire sufficient emissions to meet even Australia’s 2020 target. Its “safeguard mechanism” is unlikely to require major Australian emitters to reduce their emissions significantly. Australia is now transparently out of step with global trends and, relying only on current measures, incapable of meeting the tougher mitigation targets which will be required of it in the near future.

David Hodgkinson, Associate Professor, Faculty of Law, University of Western Australia
The Chinese government’s announcement of a 2017 national ETS is not surprising. Since 2011 China has been piloting seven trading schemes in cities including Beijing and Shanghai, albeit with varying success, and has been planning for and had foreshadowed a national scheme.
The announcement also builds on last year’s US-China bilateral agreement, which included a pledge from China (for the first time) that its emissions would peak no later than 2030 – although no mention was made of the level at which they would peak.
What is surprising is the speed with which the divide between developed and developing states enshrined in both the UNFCCC and its Kyoto Protocol has now crumbled. Both developed and developing countries in Paris in December will now state their climate pledges, or “intended nationally determined contributions”, including China. These contributions won’t be negotiated by all the parties – that approach has long gone. And the legal character of these contributions is uncertain. But China’s announcement on Friday certainly works in favour of a more robust agreement.
The climate change problem can’t be addressed without China, the world’s largest emitter (or indeed India, the third largest). China now joins the other 75 countries (and the European Union) with frameworks for limiting emissions, and the 47 countries (plus the EU) that have carbon pricing.

Celebrated NASA Planet Hunter Shifts His Sights Back To Climate Change On Earth

The Guardian - Dana Nuccitelli

Earth rise over the Moon. Photograph: Alamy

William Borucki donated Shaw Award prize money for pioneering planet finding to the Union of Concerned Scientists for its climate change efforts
William Borucki has had an amazing scientific career. One of his first jobs was at NASA Ames Research Center, where he worked on the Apollo moon missions, including helping to develop the heat shield for the space shuttle. After the successful moon landings, Borucki shifted to NASA’s Theoretical Studies Branch in the 1970s, where he developed models of the Earth’s atmosphere to predict the effects of nitric oxides and chlorofluoromethanes on the ozone layer. Both were determined to contribute to the problem of ozone depletion and the hole in the ozone layer.
In the 1980s, Borucki began advocating the development of a space mission that could detect Earth-size planets. He published a paper in 1984 showing that a photometer 1,000 times more precise than any in existence could detect Earth-size planets. Undeterred by rejections of four proposals in the 1990s for a planet-finding mission, Borucki was ultimately appointed Principal Investigator in 2001 for NASA’s new Keppler Mission to discover these planets. During its four years of its operation, the Keppler Mission discovered over 4,600 planetary candidates, confirmed more than 1,000 as planets, and made numerous contributions to stellar astrophysics.
For his work in conceiving and leading the Keppler Mission, Borucki was awarded the Shaw Prize in astronomy. He decided to donate a portion of the award to the Union of Concerned Scientists (UCS) to support the organization’s work in addressing climate change, explaining,

I’ve spent a large portion of my career searching for other worlds. What we’ve found has underscored how important it is to protect this one. While we can detect other worlds, we cannot go to them. Our future is here on Earth and we must do much more to ensure that our planet’s climate remains hospitable.
The UCS has a reputation for actively and successfully advocating mitigation of the climate change problem. Their arguments are based on scientifically valid arguments and on comprehensive climate data and model results.

I asked Dr. Borucki about his perceptions of the threats posed by human-caused climate change, and his thoughts on the steps we’ve taken so far to address them.

I consider the threat to be severe. Substantial changes are already occurring to the environment that effect many people; especially those who are impoverished. In the 1980s, the Climatic Impact Assessment Program warned that if changes weren’t made very soon, it would be difficult to reverse the changes. Clearly, they were correct.
I am very hopeful because the leaders of many countries (and some religious leaders) now recognize the problem as an imminent threat and are meeting to develop a consensus as to the most practical methods of mitigating it.

Searching for Earth-like planets has made Dr. Borucki appreciate our own and the need to preserve it, as he told the Huffington Post,

The Earth is a very special place. Unless we have the wisdom and technology to protect our biosphere, it could become like many other dead worlds ... It wouldn’t take a lot of change to make the planet uninhabitable for ourselves.

Borucki remains optimistic that humans will still solve the problem of climate change before the consequences become too severe.

Once mankind understands the threat, I think they will get together ultimately and conquer that threat. But they have to recognize it and really be dedicated to accomplishing the task, because the tasks are just enormous.

China Shows It’s Getting Serious About Climate Change

TIME - Justin Worland

The best thing to come out of a summit between China and the U.S. is a renewed commitment to fight global warming

Chinese President Xi Jinping listens as President Barack Obama speaks during an official state arrival ceremony for the Chinese president at the White House in Washington on Sept. 25, 2015.

China—the world’s largest polluter—has sought to portray itself as a leader in the global fight against climate change in recent years. The country has expedited the development of renewable energy power plants, experimented with cap-and-trade programs and last year committed to curb its growing carbon dioxide emissions in coming decades.
But despite these initiatives many lawmakers in the United States and policy makers around the world have viewed China’s environmental programs with skepticism—more promise than performance. China’s landmark announcement Friday of a national cap-and-trade program and other policies to reduce carbon emissions should ameliorate some of those concerns, experts said, even while the country faces roadblocks to implementation.
Last year’s joint announcement from the U.S. and China set big goals on the part of both countries to eventually reduce greenhouse gas emissions. The U.S. promised to reduce carbon emissions by 26% to 28% below 2005 levels by 2025, and Chinese officials said the country’s carbon dioxide emissions would reach peak levels by 2030.
This week’s announcement, both from the U.S. and China, follows up on that target, providing a plan to reach it. A cap-and-trade program would set a national limit in China on carbon emissions in the heavy-polluting industries of power generation, iron and steel, chemicals, and building materials and require companies to buy credits to pollute. Another program will prioritize the use renewable energy on the grid. (Right now, while China produces a great deal of renewable energy, problems with the grid means much of it goes unused.) The country will also improve appliance and vehicle efficiency standards.
“It’s really walking the talk to the commitment last year,” said Alden Meyer, director of strategy and policy at the Union of Concerned Scientists. “China has really been working over the last year to put flesh on the bones.”
China benefits internationally from taking on climate change—especially at a time when the country is coming under pressure for alleged cyberespionage and territorial expansion—but experts say the most logical reason to trust the commitment China may be because of internal issues the country faces. Most of the country’s energy currently comes from coal. In the past, coal plants in China have been cheap and easy to build, but the fossil fuel source has led to crippling pollution and a dramatic public health problem. Air pollution in China causes 1.6 million premature deaths every year, or 4,400 per day, research has shown. At the same time, the country is the world’s largest importer of foreign oil, leaving it dependent on shifting oil prices and the messy geopolitics of the Middle East. Renewable energy provides the logical alternative, experts say.
“Their cities are choking, to put it bluntly,” said John Creyts, managing director at the Rocky Mountain Institute, an energy think tank. “They need a development pathway that allows them to grow without choking their people and requiring them to be depend on external economies for the resources they need.”
In fact, China has already matched commitment with action. In 2014, for instance, the country invested $90 billion in clean energy, compared to $52 billion in the U.S., according to a U.S. government report.
Still, experts say implementing some of the policies in China will face uphill battles given the many overlapping jurisdictions and different reporting standards throughout the sprawling country. In their announcement Friday, China and the U.S. said they would develop a program to ensure transparency, but the details remain unclear.
Many in the U.S. and around the world have expressed skepticism about investing in efforts to fight climate change, arguing that costly efforts would lead to a free rider problem of sorts. They say under national plans to curb climate change, the U.S. would invest in expensive efforts to cut carbon emissions while other countries—primarily big developing nations like China and India—would reap the benefit without doing anything to slow their own emissions.
The argument has played out in public as recently as last week, when Republican presidential contenders suggested that government regulations to address climate change would leave the country at a competitive disadvantage.
“We are not going to destroy our economy,” said Florida Senator Marco Rubio, a GOP presidential candidate. “America is not a planet. And we are not even the largest carbon producer anymore, China is. And they’re drilling a hole and digging anywhere in the world that they can get a hold of.”
Meyer says this week’s announcement undercuts this opposition, leaving the U.S. to show how it will meet its commitment to cut emissions.
“This is yet another indication of momentum and seriousness,” Meyer said. “The job’s not done yet.”