08/04/2021

(AU) Climate Change Will Render Parts Of Australia “Uninsurable”

Energy Matters

Experts warn that increased flooding events in Australia caused by climate change could make insurance premiums too expensive for the average resident to afford.

We already see the impacts of climate change in our country, and data shows that Australia is flooding more than ever because of it. This is because our atmosphere now holds more water; our oceans’ heating means more evaporation and heavier rain systems, while the La Niña phenomenon has increased the likelihood of severe systems colliding.

Severe weather events like flood, bushfires and hail have already hit insurers hard, and they were forced to pay out $5.3 billion for damages caused during the first quarter of 2020.

Mark Leplastrier is an atmospheric scientist and also the head of Insurance Australia Group’s (IAG) Natural Perils unit. He said that climate change was making all of these weather events worse with every cycle.

   
“The main thing is, with climate change in the background of a natural variability cycle, if you have the same event coming back, and you have more warming, you have extra rainfall or intensity associated with that,” he said.

We have seen this recently with the record flooding in New South Wales that has seen 17,000 insurance claims filed – a number rising as fast as the floodwaters. There are also fears that significant weather systems like cyclones could strike areas like south-east Queensland and northern NSW, which have never seen powerful storms like that.

Insurance costs are almost outreach in some regions already

You only have to look at North Queensland to see how the severe weather events have impacted insurance costs. Cyclone Yasi’s devastation alone caused strata premiums to more than triple from $25,000 for 25 apartments to $81,000. By the time Cyclone Debbie rolled around in 2017, many North Queenslanders could not afford insurance anymore due to the skyrocketing premiums.

The situation is so severe that homeowners have asked for Federal Government intervention, and the Australian Competition and Consumer Commission (ACCC) has launched the Northern Australia Insurance Inquiry, which is due to be concluded soon.

A big fear now is that climate change could lead to another once-in-a-generation flooding event in a region like North Queensland, which could then see a cyclone collide with the existing chaos. That would cause widespread devastation and potentially see premiums soar to completely unaffordable levels.

Renewable energy and sustainability remain crucial to reversing climate change

The world is moving towards a net-zero carbon future to halt and reverse the human-made climate change causing these catastrophic weather events. A large part of that is moving away from fossil fuels and turning towards renewable energy solutions like solar.

Australia is already well on its way towards a green future, with the individual states leading the way through investment in renewable energy infrastructure and solutions.

To help play your part, consider joining the two million-plus homeowners who have already installed solar panels on their roof. You will not only be helping save the world, but you will also enjoy enormous savings on your electricity bills. 

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(USA) Your Diet Is Cooking The Planet

The AtlanticAnnie Lowrey

But two simple changes can help.

Getty

What’s for dinner?

On a planet wracked by rising seas, expanding deserts, withering biodiversity, and hotter temperatures, that’s a fraught question to answer. Food production accounts for roughly a quarter of the world’s greenhouse-gas emissions, and scientists have found that limiting global warming will be impossible without significant changes to how the world eats. At the same time, climate change is threatening the world’s food supply, with land and water being exploited at an “unprecedented” pace. 

Reforming the food system to save the planet is going to require new corporate practices, and new laws and regulations at the national and international levels. But individual consumer behaviors matter as well—more than you might think. Your diet is likely one of your biggest sources of climate emissions. But what should you do? Eat locally? Get your food from small-scale farmers? Choose organics and fair trade? Avoid processed foods? Eat seasonally?

The choices are many; the stakes are high. But experts on land use, climate change, and sustainable agriculture told me that two habits tower above all others in terms of environmental impact. To help save the planet, quit wasting food and eat less meat.

The conservation nonprofit Rare analyzed a sweeping set of climate-change mitigation strategies in 2019. It found that getting households to recycle, switch to LED lighting and hybrid vehicles, and add rooftop solar systems would save less than half the carbon emissions combined than would reducing food waste and adopting a plant-based diet.

Let’s begin with the role of food waste. Americans waste a lot of food. Nearly one-third of it, in fact. More than 130 billion pounds a year, worth roughly $160 billion. We throw away enough food to close our own “meal gap” eight times over. Food is the single biggest component of our country’s landfills, and the average American sends more than 200 pounds of food there every year. More than 1,250 calories per person a day, or more than 140 trillion calories a year, get tossed in the garbage.

Households, not restaurants or schools or corporate cafeterias, are the dominant wasters. The problem is worse in the United States than in most other countries, and it has worsened over time. When you toss a spoiled chicken breast or moldy tomato into the trash, you’re wasting a greenhouse-gas-intensive product. You’re also sending it to a landfill, where it will emit methane.

Addressing food waste would be low-hanging fruit: The country could save money, emit less carbon into the atmosphere, alleviate the burden on landfills, reduce the number of animals subjected to life on a factory farm, and address its hunger crisis just by eating all the food it makes. Households consuming more of what they buy, and thus buying less, would have a major effect on the whole food system. Food suppliers would produce less to meet the country’s more efficient demand. Supermarkets would stock less food. Fewer trucks would need to run from plant to store. Fewer refrigerators would be needed in stores and industrial facilities to keep groceries cold. Fewer cows would fill up feedlots. Fewer acres of corn and soy would be grown to feed them.

How to do it? For one, get wise about expiration labels and quit throwing out perfectly good food. Research shows that nearly all Americans misinterpret date labels and toss their groceries out prematurely, for fear of food poisoning, and understandably so. Retailers and production companies use 50 different Use By–type labels, and none is federally regulated, except for those on infant formula. Sell By stamps tend to be for inventory management, and have nothing to do with food safety; Best If Used By and Use By stamps tend to be about freshness and food quality, not whether you are about to enjoy a serving of mycotoxins. As a general point, most food is safe to eat as long as there is no evident spoilage, such as visible mold or an off smell. “Use your senses,” says Yvette Cabrera of the Natural Resources Defense Council, the conservation nonprofit, noting that those senses were refined through millennia of natural selection in no small part to help us figure out whether food is safe to eat.

Experts also point to a series of simple, old-fashioned techniques households can use to ensure that they eat more of the food they buy. They amount to thinking like your Depression-era forebears, pretty much. Figure out appropriate portion sizes; eat your leftovers; store food in appropriate containers and at the right temperature; prepare and freeze perishables instead of letting them linger and go bad; and shop in your refrigerator and cabinet before you hit the store.

And when you’re at the store, there is one dietary change to consider that beats all others in terms of its climate impact. It is not eating locally or seasonally. It is not eating organic or fair-trade. It is not eating unprocessed foods or avoiding big-box and fast-food retailers. It is eating less meat. Roughly three-quarters of the world’s farmland is used to pasture livestock or raise crops to feed that livestock. That contributes to deforestation, destroys the planet’s natural carbon sinks, erodes the planet’s biodiversity, and uses up fresh water.

The main, mooing offender is beef. Cattle are responsible for roughly two-thirds of the livestock sector’s greenhouse-gas emissions, while beef and dairy products are responsible for about one-tenth of global emissions overall. Gram for gram, beef produces roughly eight times more greenhouse-gas emissions than farmed fish or poultry, 12 times more than eggs, 25 times more than tofu, and even more compared with pulses, nuts, root vegetables, bananas, potatoes, bread, or maize.

Beef is so bad for two reasons, Michael Clark, a scholar of food systems and health at the University of Oxford, explained to me. The first is that it takes a lot of inputs to produce beef as an output: about 20 kilograms of corn and soy protein to produce one kilogram of beef, he said. The second is that cows produce methane as they digest their food. “Other types of animals don’t do that,” he said. “And methane is a more potent greenhouse gas than carbon dioxide.”

Trading your rib eyes and cheesesteaks for lentils and tofu is one of the best things you can do as a consumer for the environment; if all Americans did, the country would be roughly halfway to hitting its Paris Agreement targets. Still, the all-or-nothing way the choice is often presented is a mistake. There is enormous acreage between the Atkins diet, or even the meat-heavy diet of the average American, and full-on veganism, which remains a niche lifestyle choice that few follow for long. Better all Americans cut meat consumption by 40 percent than 3 percent of Americans cut it out completely. Experts encourage taking small, meaningful steps to reduce your meat consumption, and trying to find some joy in doing it. Participate in Meatless Monday; try learning to cook dishes from a plant-heavy cuisine you like; offer a vegetarian option at work events; opt for dishes where meat plays a supporting, rather than leading, role.

After wasting less food and eating less meat, all other changes a person might make are marginal, experts said, among them eating locally, organically, and seasonally. Moreover, the climate impact of those food choices is in many cases contradictory. “I work in food, and it’s confusing for me,” Cabrera, of the NRDC, told me. “Is this lettuce better than this lettuce? Consumers are faced with so many choices, and it is really hard to know.”

Humanely raised, local meat, for instance, can produce more emissions than meat coming from a concentrated industrial operation, Clark told me. Cows in concentrated animal-feeding operations are generally slaughtered at 12 to 18 months of age, while cows raised exclusively on pastures typically live twice as long. “The cow that lives for longer is going to emit more methane over the course of its lifespan,” he said, though he added that there were still compelling reasons to opt for the local beef.

Similarly, growing a given amount of organic produce usually requires more emissions and acres of land than growing the same amount using conventional farming methods. One study conducted in Sweden, for instance, showed that organic peas and wheat have a bigger climate impact than their conventionally farmed cousins.

That said, when it comes to the emissions related to shipping food around the world, experts argue that—surprisingly—local is not always better. There’s a certain uncanny decadence to eating Peruvian avocados and Chinese grapes in the dead of winter, or opening a bottle of French Beaujolais or a package of Scottish smoked salmon at will. But transporting food around the world tends to make up only a small share of a given product’s total greenhouse-gas emissions. What you are eating and how it was farmed is far more important than how it got to you, and imported food typically has a low carbon impact.

For all that, experts said there are good reasons to opt for organic, locally produced, seasonal food, even if it might not be as efficient to produce, or might not have the lowest greenhouse-gas emissions. Many smaller-scale operations outside Big Ag produce food without pesticides, without monoculture, with manure instead of chemical fertilizers, and with respect for biodiversity and soil health. Those are all important facets of environmental preservation too.

Complicating things, what’s good for the environment isn’t always what’s good for animal welfare. When it comes to eating animals, “unfortunately, the cruelty scale is the flip of the emissions scale,” Leah Garcés, the president of Mercy for Animals, a nonprofit that advocates for better conditions for animals raised in industrial environments, told me. A family can easily eat a chicken in a single night, but might struggle to eat a whole cow over the course of a year. Moreover, transportation and processing is much rougher on birds, which have delicate bodies. (Each year, more than 1 million chickens die en route to slaughter, and half a million are not actually dead when they hit the scalding tank.) For these reasons, a chicken breast represents much more suffering than a steak, even though the steak is worse for the planet. But the fact remains: The fewer animals you eat, the fewer die, and the better off the planet is.

Diets that are good for the planet tend to be good for people too. Research by Clark and his colleagues has shown that foods associated with good health generally have low environmental impacts, “indicating that the same dietary transitions that would lower incidences of noncommunicable diseases would also help meet environmental sustainability targets.”

Our diets are cooking the planet, and changing them, even in small ways, might help avert catastrophe. A burger for lunch, a bag of wilted greens in the trash—these may not be as obviously destructive to the environment as a private jet or a gas-guzzling car. But they are choices we make daily, and they matter. 

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(AU) Malcolm Turnbull Has The Right Vision But Once Again Tricky Politics Got In The Way

Sydney Morning Herald - Frank Jotzo | Mark Howden

Author
  • Frank Jotzo is director of the Centre for Climate and Energy Policy at the ANU Crawford School of Public Policy.
  • Mark Howden is director of the ANU Institute for Climate, Energy and Disaster Solutions.
The ferocity of conflicts over coal still throws spanners in the works of Australian politics.

Malcolm Turnbull’s removal as chair of the NSW Net Zero Emissions and Clean Economy Board is a stark example of the difficulties Australian governments have in dealing with climate change and the transition to clean energy.

And yet, the momentum in the shift to a cleaner economy will ultimately sweep aside the adverse politics.

The NSW government has shown deft footwork developing forward-looking climate and energy policy, including an electricity strategy with renewable energy investment at its core.

It has a strategy that maps out first steps towards a net zero goal, and commissioned a stocktake of innovation opportunities in decarbonisation. In Matt Kean, NSW has an Environment Minister who understands the economic upside of the shift to low emissions, and who often leads on the issues nationally.

Former prime minister Malcolm Turnbull has been removed from his job in NSW as a byelection looms. Credit: James Brickwood

So how can it be that barely a week after having announced the former prime minister as chair of the new Net Zero board, the NSW government makes an about-turn and reverses the appointment? Clearly it is about the byelection in the Upper Hunter, where the future of coal is an important factor.

The byelection reflects a groundswell of ongoing change in Australia’s attitudes towards gender. There is a similar groundswell on climate change too. Political parties ignore such societal changes at their peril. Or embrace them to the advantage of many. The reality is that coal mining does not have a long-term future.

Longer-term continued use of coal is incompatible with any tolerable scenario for climate change. And even without carbon policy, technology will gradually push coal to the sidelines. Where new power generation is needed, wind and solar is already cheaper than new coal plants in many parts of the world, and much cheaper in Australia.

And that is before including the costs of carbon emissions or the financial risk that coal plants might shut down early because of emissions constraints. Carbon capture and storage was once the hope for the survival of coal, but that is no longer cost-competitive with zero emissions alternatives. We will see demand for coal fall away.

Rather than sticking our collective heads in the sand, we need to have honest conversations about this. How are we, as a society, to go about supporting the regions, communities and workers in those few parts of the country where coal plays a big role in local economies? What are the industries that could rise in Australia’s other coal mining regions, and what can governments usefully do to support them?


How Turnbull’s new role was ended before it even began

These are questions that Malcolm Turnbull engaged with before, during and after his spell as PM. A focus on innovation was part of the answer.

But ideology, sectional political interests and the micro-politics of “the way things have been done around here” stymied much of his vision then, as now. But there are alternatives.

There are countries where climate and energy policy questions are not so toxic. Germany’s decision to stop using coal is supported by the major political parties.

It is underpinned by a consensus process where all major stakeholders hammered out an agreement. In Britain, there is bipartisanship in favour of ambitious climate policy, despite oil and gas interests.

These and other examples leverage off innovation – social, technological, political. Bypassing the landmines of “the way things have to be done”.

And so, having moved in reverse a bit to accommodate some tricky politics, the caravan will move on. With the byelection out of the way, the NSW government will be freer to do what needs to be done, at least until the state election looms.

And Malcolm Turnbull will have been, once again, the victim of the micro-politics that continues to delay constructive change.

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07/04/2021

New Report Hails The Decade Of Renewables As 2020 Hits Capacity Record

RenewEconomy - 


A new report released by the International Renewable Energy Agency (IRENA) has shown that global renewable energy capacity additions in 2020 have surpassed a range of prior estimate and all records from previous years.

The majority of the year was impacted by the COVID-19 pandemic, with supply chains, businesses and shipping all heavily disrupted, making the records even more remarkable.

IRENA found that global additions of renewables added up to 260 gigawatts, exceeding 2019’s value by nearly 50%. More than 80% of all new electrical capacity added in 2020 was renewable, and of that renewable energy 91% was wind and solar.

IRENA attributes this to a “net decommissioning” of fossil fuel power in Europe, North America and Eurasia (including the Russian Federation and Turkey). In Asia, the Middle East and Africa, there is a net expansion of fossil fuels. The expansion of fossil fuels continues, but is slowing, according to their data.  


The data also highlight that China and the US were the two dominant players globally for these markets, with China adding a stunning 72 gigawatts of wind power and 49 gigawatts of solar power in 2020.

The US installed 29 gigawatts of renewables, “nearly 80% more than 2019, including 15 GW of solar and around 14 GW of wind”.

However, most other countries “continued to increase renewable capacity at a similar rate to previous years”, the report adds.



The new additions put the renewable share of total generation capacity in the world from 24.6% in 2019 to 36.6% in 2020.

“An energy transition requires that the use of renewables expands by more than the growth in energy demand, so that less non-renewable energy needs to be used”, write the authors of the report.

“Many countries still have not reached this point, despite dramatic increases in their use of renewables for generating electricity”. 
  

Of the various regions reported upon, the highest increase in capacity was Oceania (18.5%), almost all of which occurred in Australia.

However, the region is a small share of global totals and Australia remains heavily dependent on world-leading quantities of coal-fired power, as reported in another recent analysis of 2020 electricity data.

Another Australian government report suggested that Australia’s growth could be heading for a downturn.

“Despite the difficult period, as we predicted, 2020 marks the start of the decade of renewables,” said IRENA Director-General Francesco La Camera.

“Costs are falling, clean tech markets are growing and never before have the benefits of the energy transition been so clear.

"This trend is unstoppable, but as the review of our World Energy Transition Outlook highlights, there is a huge amount to be done.

"Our 1.5 degree outlook shows significant planned energy investments must be redirected to support the transition if we are to achieve 2050 goals. In this critical decade of action, the international community must look to this trend as a source of inspiration to go further”.

A recent preview of the 2021 IRENA “World Energy Transition Outlook” report, to be released in full later this year, found that “proven technologies for a net-zero energy system already largely exist today”, and that “in anticipation of the coming energy transition, financial markets and investors are already directing capital away from fossil fuels and towards other energy technologies including renewables”.
 

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(AU) Alan Kohler: The Climate Spin Can’t Go On Forever. Net Zero Must Be Our Aim

New DailyAlan Kohler

Australia must tackle climate change head on and strengthen its emissions trading scheme, writes Alan Kohler. Photo: TND

Author
Alan Kohler writes for The New Daily twice a week. He is editor in chief of Eureka Report and finance presenter on ABC News
The Morrison government faces a big choice when it comes time to commit fully to net-zero carbon emissions by 2050.

Most other countries have already made that commitment, and just about every other Australian organisation and state government has done it as well, but Scott Morrison’s current wording is that he wants to achieve net-zero emissions “preferably” by 2050.

That means the government doesn’t have to announce any actual policies to achieve that, just talk about advances in technology and say it would be nice if they were to cut net emissions to zero by 2050.

Maybe they can keep that sophistry going for a while, but as the pandemic passes the pressure will resume.

When Mr Morrison is forced to lose the word “preferably” from his climate change incantation, a choice will have to be made between public and private spending. That is, between the American and European methods.

Biden’s spending big

Having got his $US1.9 trillion ($2.5 trillion) economic stimulus through Congress, US President Joe Biden is now working on a $US2.3 trillion ($3 trillion) infrastructure spending plan, some of which is to go on emissions reduction and renewable energy.

By contrast, Europe runs the first and still biggest emissions trading scheme, started in 2005.

Neither of them, it should be noted, is doing anywhere near enough yet to reach net zero by 2050, but at least they’ve made a start.

The great irony is that the headquarters of capitalism – the United States – is doing it with the socialism of government spending, while Europe is using the market.

The Australian government is using a bit of both, with the emphasis on “a bit”.

There’s the Snowy 2.0 pumped hydro storage scheme, which will cost up to $4.5 billion, the $1.3 billion Modern Manufacturing Initiative and the Low Emissions Technology Statement that talked about building a hydrogen industry without mentioning a dollar figure for government investment.

Mr Biden’s $US2.3 trillion ($3 trillion) “American Jobs Plan” now before Congress only contains about $US300 billion ($394 billion) in direct spending on emissions reduction, with the rest to be spent on things like a national broadband network, new water pipes, affordable housing, roads and bridges.

But since America’s GDP is 10 times Australia’s, that’s equivalent to $30 billion here.

Even if you count emissions reduction infrastructure spending by all Australian governments you only get to $7.4 billion (according to WWF Australia).

Joe Biden’s $3 trillion ‘American Jobs Plan’ contains about $394 billion in direct spending on emissions reduction. Photo: Getty

Australian system achieving little

Australia’s emissions trading scheme is likewise a pale shadow of Europe’s.

The government’s Clean Energy Regulator issues “Australian Carbon Credit Units” (ACCUs) to anyone who gets a project approved by the Emissions Reduction Fund.

In 2020, 158 projects were approved that cut emissions by 16 million tonnes, 8 per cent more than in 2019. The CER is predicting it will be 17 million tonnes in 2021.

That 16 million tonnes of abatement in 2020 was 3 per cent of Australia’s total emissions; Europe’s ETS apparently contributed to a 21 per cent reduction in 2020.

Another way to measure the difference is the carbon price: On the European market, it recently hit a record high of 43 euros, or $66 per tonne. The “spot price” in Australia is currently $16.55.

That’s because the caps in our cap-and-trade system are high, which means emitters don’t have to buy many ACCUs.

The way an ETS works is that the government puts a cap on how much carbon dioxide each company in the land can emit, and if they want to emit more, they have to buy (trade) credits from someone who is emitting less or has an approved emissions reduction project, like planting trees, and therefore gets credits issued to them.

The European Union has a low cap and then issues a lot of free allowances, as they’re called, (17.8 billion euros worth last year); Australia simply has a set of caps that are equal to what the companies are emitting now, so they don’t have to buy any ACCUs.

That’s because the Coalition doesn’t want anything that smells remotely like a carbon tax, having triumphantly repealed Labor’s ETS in 2013 after falsely describing it as a carbon tax.

But while repealing the Clean Energy Act, the Coalition only amended the Clean Energy Regulator Act. Not only was it retained, its funding was increased in last year’s budget.

Times have changed

Angus Taylor, who goes by the title of Minister for Energy and Emissions Reduction, now regularly emits press releases announcing the regulator’s marvellous achievements in reducing emissions.

But times have changed and Tony Abbott lost his seat to an independent promoting action on climate change.

Since then, the Coalition has been trying to appear to be doing something about climate change without being accused of actually doing anything serious – thus the word “preferably” inserted into its version of the net zero by 2050 commitment.

But the “preferably” can’t last, which means the loose caps in Australia’s ETS and/or the tiny spending on renewable infrastructure can’t last, either.

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Here’s All The Climate Science You Missed So Far This Year

Bloomberg Green

Don’t worry, we’ve got your back.

Flood in Australia. Photographer: Flavio Brancaleone/Getty Images

In early January the high atmosphere above the Arctic warmed abruptly, which happens about six times a decade. That warming gradually weakened the jet stream below, causing frigid air to spill down across North America. Texas froze, and tragedy ensued.

Some evidence points to a link between the quickly heating Arctic and cold spells to the south, but not everyone agrees, and it’s become a bit of a stalemate. Two things are certain: Winter is the fastest-warming season, and Texas missed warnings.

Scientists are much clearer about humanity’s role in more common extreme weather events. Some 40,000 people evacuated their homes in New South Wales in March after biblical rainfall.

Aspects of Australia’s climate make parsing the climate influence of any precipitation event more complicated, but new work affirms that more greenhouse gas means more heat, a wetter atmosphere, and more extreme rainfall. 

It’s not only about more or less precipitation—the timing of the seasons is changing almost everywhere, with California’s rainy season now starting a month later than it did 60 years ago.

Global heating has also slowed down the Gulf Stream, the vast Atlantic circulation system that directly affects climate in Africa, the Americas, and Europe, to its lowest level in 1,000 years. This deceleration is a long-predicted and long-feared development, and scientists say a better understanding of it “is urgently needed.”

Keeping the temperature rise below 1.5°C seems like a better and better idea, even as it’s becoming harder and harder to achieve. With heat comes more humidity, a potent combination that can push a human body to its breaking point.

Halting climate change below 2°C would dramatically cut the risk to people in the tropics of conditions that push the body past “the survival limit.”

A quarter of the CO₂ pollution we emit every year washes into the ocean, and some falls to the floor as sediment, where it stays safely away from the atmosphere for millenniums. Except when industrial fishing trawlers run over 1.3% of the ocean floor every year, releasing as much as 20% of the atmospheric CO₂ that the oceans absorb annually. 

The good news: The creation of protected marine areas would help keep down this carbon, while improving both fisheries and marine life, according to a new study. The authors included Jane Lubchenco, a university distinguished professor at Oregon State University, who’s since taken the White House’s highest-ranking climate-science adviser position.

Like marine sediment, soil is an amazing place to hide carbon from the atmosphere. It’s supposed to be a twofer: Plants suck down CO₂, and when they shed leaves or die, the stored carbon becomes a part of the soil.

That process is now called into question by research suggesting that as plants soak up soil nutrients, microbes wake up and feast—with their metabolism releasing stored CO₂ back into the atmosphere. The more plants grow, the less the soils hold on to. The discovery may require changes to important models.

There’s a downside to earlier springtime and later winter: more time for plants to kick out allergens. Allergy season is 20 days longer than it used to be in North America, with pollen concentrations growing by 21%. 

Meanwhile across the pond, scientists trying to give Europeans better tools to prepare for allergies found that seasonal severity may rise an additional 60% in the decades ahead. And if that’s not too much to inhale, researchers in Colorado found that the energy required to grow cannabis indoors produces 1.3% of the state’s emissions.

Somehow there’s still good news—the adoption of renewables and electric vehicles, oil-industry introspection, even sweeter peaches (drought stress raises sugar production). With sustained effort, we might see the most important measures of planetary health improve.

Global CO₂ emissions from energy rose by 0.9% a year from 2010-18, less than a third of the annual growth in the previous decade.

The pandemic year knocked down annual CO₂ emissions by an historic 7%, but economic engines have restarted, and December 2020 emissions were already higher than the same month in 2019. 

It adds up: Last year tied 2016 as the hottest year on record, and the hottest seven years in the last 141 have all occurred since 2014.

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06/04/2021

Climate Change Cannot Be Mitigated Without Effective Carbon Pricing

Forbes -  Georg Kell

NASA picture of long-term global temperature increases. NASA

Author
Georg Kell is the Chairman of the Board of Arabesque, a technology company that uses AI and big data to assess sustainability performance relevant for investment analysis and decision making.
He is also Vice Chairman of the DWS ESG Advisory Board and Speaker of the Volkswagen Sustainability Council and a founding Director of the United Nations Global Compact, the world's largest corporate sustainability initiative.
More and more countries, already representing about 70% of the world economy, are setting climate neutrality targets.

Hundreds of corporations, including the largest emitters of greenhouse gases, have pledged to become “net zero” by 2050 or earlier, and over 1,000 corporations have embraced science-based targets to measure carbon reductions.

This outburst of public declarations and pledges signifies a promising new alignment of ambitions to face the climate crisis. But declarations of good intentions by themselves are not going to lead to the required timely actions.

In fact, despite the growing popularity of voluntary commitments, especially since the Paris Agreement of 2015, average carbon dioxide (CO2) levels in the atmospheres have kept growing. They exceeded 410 parts per million in 2019 and kept rising in 2020 despite the Covid-19 lockdown, reaching a new record of 416 parts per million in February 2021.

Mitigating climate change is largely about accelerating the transformation of the energy systems that power and sustain our modern lives. The burning of fossil fuels accounts for about 80% of the emissions that cause global warming. Growing the share of renewable sources of energy for producing electricity, electrifying all segments of the economy and employing low carbon technologies is possible in principle.

But despite technological breakthroughs and the growing cost competitiveness of renewables, the current pace of change is still far too slow. According to statistics on recent primary energy consumption, the share of renewable sources now stands at about 5% of primary energy. If all non-CO2-emitting sources – renewables, hydro and nuclear - were included, that share would stand at 16%.

Organizations such as the International Renewable Energy Agency (IRENA) and the World Resource Institute (WRI) estimate that the share of renewables must grow exponentially, and the share of fossil fuels decreased accordingly. The overall estimate is that the level of ambition needs to be roughly tripled to align with the 2°C limit and must be increased around fivefold to align with the 1.5°C limit. 

Such a massive systems change cannot be achieved by public sector actions alone. In the case of the European Union, for example, it is estimated that in order to achieve the 55% emission reduction target by 2030, €350 billion more need to be invested annually in the period from 2021 to 2030 than the amount invested in the period from 2011 to 2020.

Public funding can help kickstart such a massive investment, but most of it will have to come from the private sector. By using 37% of the €750 billion NextGenerationEU funds, as proposed by the EU Commission, €277 billion will be spent directly on the European Green Deal objectives, contributing about 8% to the additional investment needs for the next decade.

The situation is similar in the US. The huge infrastructure proposal by President Biden - even if fully implemented - would amount to only one eighth of the estimated required investments to stave off the worst projected dangers of a warming climate.

It is obvious that the full potential of the private sector needs to be activated in order to realize investments of such magnitude. This in turn can only be accomplished if framework conditions are adjusted and if CO2 is priced high enough to establish the business case for decarbonization. 

Establishing the business case for decarbonization is the key to bringing about the systemic change needed to unleash the resources and creativity of the private sector.

Much has been said and written about the failure to price emissions - Nick Stern called climate change “the greatest market failure the world has seen” - and in principle there is broad understanding that “we cannot solve the climate crisis without effective carbon pricing”, as Janet Yellen, US Secretary of the Treasury, said at her confirmation hearing. 

As illustrated in the report “State and Trends of Carbon Pricing 2020”, there are some 61 carbon pricing initiatives either implemented or scheduled within 46 national and 32 subnational jurisdictions. The recent results of the largest such scheme, the European Emissions Trading Systems (EU ETS), are encouraging.

Greenhouse gas emissions covered by the scheme (power and heat generation and emission-intensive industries) have decreased by 33% since 2005, with significant reductions especially in 2018 and 2019. 

However, overall progress is slow. As of today, only about 22% of global emissions are covered by carbon pricing initiatives and less than 5% are subject to high enough levels. About half of the emissions are priced at less than US$10 per ton - with the global average price standing at US$2 per ton!

Worse, subsidies for fossil fuels, estimated at US$478 billion in 2019, are more than ten times higher than revenues from carbon pricing (US$45 billion in (2019). If the indirect costs were to be included in the “perverse subsidies” for fossil fuels, this amount would be about US$5 trillion per year, according to the International Monetary Fund (IMF).

As the world is preparing for the 2021 United Nations Climate Change Conference (COP26) in Glasgow, there is now an opportunity to get serious with climate policies. We are only one investment cycle away from 2050 and we need to get the policies right - and right now. Policy makers have it in their hands to change the framework conditions by establishing effective carbon pricing that will unlock the needed investments. 

A promising new initiative, Call on Carbon, aims to encourage policy makers to do so. The initiative was born in the Nordic countries. Carbon pricing has already been successfully introduced in these countries and has led to major shifts away from high-emitting activities toward cleaner and future-oriented technologies. Supported by business leaders and civil society actors, the Call on Carbon asks governments to:
  • Back their net-zero targets with effective, robust, reliable and fit-for-purpose carbon-pricing instruments consistent with the Paris agreement in order to establish cost-efficient paths to reach net-zero emissions.
  • Align carbon-pricing instruments to create stable and predictable investment environments.
  • Finalize the rules for international market mechanisms under Article 6 of the Paris Agreement in order to support cost-effective mitigation efforts, create a level playing field and minimize carbon leakage.
It is hoped that many more private sector actors will join the Call on Carbon and encourage policy makers to be bold on carbon pricing. Unlike the many previous carbon pricing advocacy efforts that showed limited success, this time around the chances for getting heard are better - for several reasons: 

First, capitals around the world today. Governments can no longer postpone climate action or get away with cosmetic changes. The climate crisis is already upon us. Especially young people are rightly demanding bolder actions. Moreover, crisis situations lower barriers against change. As governments are employing trillions of US dollars to recover from the Covid-19 crisis, they have an opportunity to change the framework conditions for markets.

Second, as more robust climate action is becoming inevitable, decarbonization and digitalization of economies are fast becoming pillars of competitiveness. The inevitability of carbon reduction as a currency of the future should motivate policy makers and the private sector alike. 

Third, thanks to technological progress and applications at scale, the cost of clean technology, such as solar and wind power generation, batteries, electrolyzers and the production of low carbon materials, is falling rapidly.

According to estimates by the Institute for Sustainable Development and International Relations (IDDRI), the break-even CO2 price for very low-carbon cement, primary steel and primary aluminum would be €50 to €90 per ton, with electricity costs between €40 to €50  per megawatt-hour. According to a Swedish study, this would increase the retail price of a car by only about €100 to €125.

Breakeven cost estimates of very low-carbon cement, primary steel and primary aluminum technologies. IDDRI
Fourth, some environmental advocacy groups have been reluctant to support market instruments, fearing that these instruments could be used to undo performance standards for industries or further disadvantage low-income populations.

But the evidence from existing carbon pricing schemes, such as those implemented in Nordic countries, show that both approaches can and should be employed simultaneously. Moreover, revenues from carbon pricing can be earmarked to offset any disadvantages to low-income populations. 

With the upcoming COP26, this year is a potential turning point, offering policy makers to think big and to act accordingly.

Phasing out fossil fuel subsidies and establishing an effective price for carbon is an essential and long overdue measure to mitigate climate change.

The United States, China and the European Union are well positioned to demonstrate genuine leadership.

Note: This article has been written in cooperation with Jouni Keronen, Chief Executive Officer of the Climate Leadership Coalition.

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