Summary

Unless you’ve been living in a cave, you know that today is the day the EPA unveils rules to cut carbon emissions by coal-based power plants. In today’s edition, already some stories on the impact of such rules in the future.  And a special assessment of the CCX by Paula DiPerna. 

CCX led the way

By Paula DiPerna 

As the US EPA moves to a national policy to limit greenhouse gases and eventually pricing those emissions through a cap-and-trade system, it is worth reflecting on the work of the Chicago Climate Exchange (CCX, which operated from 2003-2010 and was the world’s first cap-and-trade system for all six greenhouse gases.  CCX, a homegrown success, was well ahead of its time, a network of early adoptors who understood the climate change challenge and moved to meet it out of common sense and vanguard style.   A few key points about scale and scope:

  • During CCX Phase I and II, the baseline of capped participating emitters in CCX was larger than today’s RGGI and California baselines combined
  • CO2 futures prices reached a high of $13 USD for CO2; reductions were significant over the 8 year period
  • Members included most of America’s key companies, such as DuPont, AEP, Ford and IBM; visionary public entities such as the Cities of Chicago, Oakland and Portland, Oregon and the state of New Mexico;  and universities such as the University of Minnesota.  
  • The combined CCX baseline meant that at the time, the US had more emissions capped than any other nation in the world (larger than the Germany’s National Allocation Plan in the EU ETS, the largest in that system.  
  • CCX pioneered many offset reduction protocols, and when CCX was in existence, literally thousands of dollars were being paid to hard-pressed farmers nationwide as part of a system of bona fide, fully verified offsets for such accepted practices that sequested ghgs as methane capture, reforestation,  no-till agriculture, etc.  
  • Auditing of CCX activities was provided by FINRA.and members learned a great deal about greenhouse gas accounting that now holds them in good stead. 
  • Many of the rules and protocols developed through CCX have been adapted or adopted whole by various state programs now in existence or development
  • CCX helped kickstart emissions trading in China, through its joint venture to create the Tianjin Climate Exchange (TCX), China’s first greenhouse gas exchange, now up and running, along with various other exchange throughout China—all building toward a national cap-and-trade system 

            In short, CCX was a precursor to today’s dynamics.  CCX was originally conceived, founded and Chaired by financial innovator and economist Dr. Richard L. Sandor, well known as the “father of financial futures” and who was recently awarded the Legion d’Honneur by the Government of France for his pioneering work in environmental finance in general and CCX in particular, and a key partner, Dr. Michael Walsh.  The two had worked together at the Chicago Board of Trade and helped develop the US SO2 cap-and-trade system.  

CCX was sold to ICE in 2010, but at the time, even though the system was voluntary, a critical mass of the US economy was participating, including leading traders and financial institutions.   The message was clear: cap-and-trade was a great US invention, not from Mars, and most concerned entities in the US were ready and willing to participate and build a workable nationwide system, if legislation had ensued.   That the Waxman-Markey legislation did not get through the Senate was a political event, not a statement about the actual value or potential of cap-and-trade.   And cap-and-trade could co-exist with a carbon tax, so the either/or here is also greatly exaggerated.  That cap-and-trade has spent the last five years in the desert of do-nothing in the US is a national economic and environmental tragedy, perhaps now on the brink of redemption. 

            At minimum CCX was an important proof of concept, but also proof of existing and latent corporate appetite to take action, to make use of cap-and-trade, ie., business resistance to the concept is greatly exaggerated.   At the Congressional level during Waxman-Markey debates, there was much mis-information and this contributed significantly to the demise of the bill.   

Climate change is perhaps the world’s most critical inter-generational challenge.  CCX helped lead the way toward meeting this challenge.  It helped demonstrate that cap-and-trade was not only viable, but desirable, neither conservative nor liberal,  and the success of CCX demonstrates that when intellectual and operational élan get together, a new idea can actually be implemented and gather support like a rolling stone. 

Addressing climate change head-on would help re-invigorate economies world-wide, leading to a complete revamping of infrastructure, energy efficiency, and all kinds of other job-creating benefits and projects that will inspire people worldwide.  Let us hope that the new US policy is a catalytic step forward of which we can all be proud.  

Paula DiPerna was Executive Vice-President of CCX for Recruitment and Public Policy, as well as President, CCX-International. She serves currently as a Special Advisor to CDP, formerly known as the Carbon Disclosure Project. 

Quote of the day

“It’s not a magic bullet”

Alden Meyer, director of strategy and policy at the Union of Concerned Scientists, in the Bloomberg Businessweek’s story Obama’s Step Forward on Carbon Undone by China’s Steps Back 

Lead stories 

6 charts you should see before Obama unveils his new climate plan
Brad Plumer, Vox
On Monday, June 2, the Obama administration will propose new rules to cut carbon-dioxide emissions from the nation’s coal- and gas-fired power plants. 
http://jlne.ws/1kzGJvZ

EPA to propose cutting carbon dioxide emissions from coal plants 30% by 2030
Juliet Eilperin and Steven Mufson, Washington Post 
The Environmental Protection Agency will propose a regulation Monday that would cut carbon dioxide emissions from existing coal plants by up to 30 percent by 2030 compared with 2005 levels, according to individuals who have been briefed on the plan.  
http://jlne.ws/1n3jMpt

Obama to Take Action to Slash Coal Pollution
Coral Davenport, The New York Times
The Obama administration on Monday will announce one of the strongest actions ever taken by the United States government to fight climate change, a proposed Environmental Protection Agency regulation to cut carbon pollution from the nation’s power plants 30 percent from 2005 levels by 2030, according to people briefed on the plan who spoke anonymously because they had been asked not to reveal details. 
http://jlne.ws/1oMC8hF 
***LB: Also in this story “Under the rule, states will be given a wide menu of policy options to achieve the pollution cuts. Rather than immediately shutting down coal plants, states would be allowed to reduce emissions by making changes across their electricity systems — by installing new wind and solar generation or energy-efficiency technology, and by starting or joining state and regional “cap and trade” programs, in which states agree to cap carbon pollution and buy and sell permits to pollute.”

Five questions for Obama’s climate rule
Timothy Cama, The Hill
The Environmental Protection Agency (EPA) on Monday will announce the most aggressive effort yet under President Obama to cut greenhouse gas emissions. 
http://jlne.ws/1olYoey

Obama’s Carbon Rules Can Boost the Economy
Tom Zeller Jr., Bloomberg
With the Obama administration’s new carbon dioxide emissions limits for the nation’s aging power plants coming out today, the drumbeat of lost jobs, economic devastation and a liberal “war on coal” has once again reached a crescendo. 
http://jlne.ws/RWwomN

Obama’s Boldest Move on Carbon Comes with Perils 
Dina Cappiello, AP
The new pollution rule the Obama administration announces Monday will be a cornerstone of President Barack Obama’s environmental legacy and arguably the most significant U.S. environmental regulation in decades. But it’s not one the White House wanted.
http://jlne.ws/1jLIs0W

Obama’s Step Forward on Carbon Undone by China’s Steps Back
Mark Drajem and Jim Efstathiou Jr., Bloomberg Businessweek
President Barack Obama is set to take his boldest step to halt the rise of the oceans and stop the warming of the planet.
http://jlne.ws/1koyRlu 
***LB: Also in this story “Persuading developing countries to forgo the benefits of cheap coal power and economic growth won’t be easy.”

5 Dense Carbon Polluters In EPA Crosshairs
Jeff McMahon, Forbes
The utilities most vulnerable to EPA carbon regulations are not the giants—despite their giant volumes of CO2 emissions—but rural electric cooperatives that rely on old coal plants for cheap electricity.
http://jlne.ws/SnXaoD

Trying to Reclaim Leadership on Climate Change
Justin Gillis and Henry Fountain, The New York Times
At the end of his first year in office, President Obama flew to Copenhagen and made a big promise: that the United States would cut its greenhouse gas emissions substantially by 2020 — a bold and risky pledge that hinged on a balky Congress to make it possible. 
http://jlne.ws/1iKK5fG

Survey: Majority favor renewable energy over coal, despite costs
Tim Devaney, The Hill
The Environmental Protection Agency (EPA) is expected to come out with new greenhouse gas regulations as earlier as next week that could have a devastating impact on existing coal plants.
http://jlne.ws/1jLLBOj

Obama to tout latest US energy steps in Europe talks
Laura Barron-Lopez, The Hill
Days after the administration plans to announce its signature rules limiting carbon emissions from power plants, Obama will discuss climate change and energy issues with the leaders of the G7 nations at a summit in Brussels Thursday. 
http://jlne.ws/1kxqEvB 
***LB: Also in this story “Topics that will be on the table include natural gas exports and the new carbon power plant rule”

Energy UK: time to rethink ‘green’ power policies in Brussels 
Terry Macalister, The Guardian
Energy UK will on Monday use electoral successes made by Eurosceptics to call for a rethink on “green” power policies in Brussels.
http://jlne.ws/1kxrOHF 
***LB: Also in this story “The attempt to use political advances by the UK Independence party and others to dilute measures to counter climate change will infuriate environmentalists and renewable energy executives.”

The myth about climate change
Eric Reguly, The Globe and Mail
Canada, beware. The Prairie farmers and politicians who have convinced themselves that global warming presented more opportunities than problems – that Kansas’s loss would be Saskatchewan’s gain–might be guilty of wishful thinking. 
http://jlne.ws/1tASk3g

Obama’s Dirty, Coal-Loving Past
Alec MacGillis, New Republic
The Obama administration will announce major new restrictions on carbon emissions from existing coal-fired power plants, which will likely be the biggest step this country has taken to address climate change and almost certainly be the most consequential act of his second term.
http://jlne.ws/1oMKmX5

Russia’s Gazprom gives Kiev extension into next week in gas dispute
Reuters
Russia’s Gazprom gave Ukraine on Monday an extension into next week to resolve a gas price dispute at the heart of the two countries’ confrontation, a day before Moscow was due to switch off the gas unless Kiev paid in advance.
http://jlne.ws/1khECme

Events

EMA’s 18th Annual Meeting 
Join the Environmental Markets Association and environmental industry professional for two days of dynamic sessions, two nights of networking receptions, and countless opportunities to increase your business contacts. 
October 22 – 24, 2014
Santa Monica, CA
http://jlne.ws/1qaR5eE

Carbon

EU Emissions Trading System reform needs two political issues resolved: EU official
Platts
Two political issues must be resolved before a proposed reform of the EU Emissions Trading System can go ahead, a senior EU official said Friday. 
http://jlne.ws/1iKIuqd 
***LB: Also in this story “Peter Zapfel, head of policy coordination at the European Commission’s climate directorate, told delegates at Carbon Expo in Cologne, Germany, that member states and European parliamentarians must decide when the proposed market stability reserve should start and how to treat the 900 million EU allowances that are set to be returned to the market in 2019 and 2020.”

Brazil to Offset Almost Double Amount of Direct Greenhouse Gas Emissions Expected from World Cup
World Football Insider
Brazil will offset almost double the amount of direct emissions from greenhouse gases anticipated from hosting the 2014 FIFA World Cup Brazil. 
http://jlne.ws/1wSnXK7 
***LB: Also in this story “The equivalent of 115,000 tons of carbon credits have been donated to the country – compared to an estimated at 60,000 tons of direct emissions from the tournament.”

ClimeCo Enters into Agreement to Deliver Guaranteed, High Quality Offsets to Southern California Edison
Nassau News Live
ClimeCo Corporation (ClimeCo) has entered into an agreement with one of California’s largest state utilities, Southern California Edison (SCE), to transact greenhouse gas (GHG) offset credits to satisfy the utility’s compliance obligations under the California Air Resources Board’s (ARB’s) Cap-and-Trade Regulations.
http://jlne.ws/1m50HQy

Carbon Pricing Proposals of the 113th Congress
C2ES (Center for Climate and Energy Solutions)
The following table compares the Climate Protection Act of 2013 as introduced by Sens. Bernie Sanders (I-VT) and Barbara Boxer (D-CA) on February 14, 2013, the Carbon Pollution Fee discussion draft as released by Rep. Henry Waxman (D-CA), Sen. Sheldon Whitehouse (D-RI), Rep. Earl Blumenauer (D-OR), and Sen. Brian Schatz (D-HI) on March 12, 2013, and the State Choices Act discussion draft as released by Rep. John Delaney (D-MD) on May 21, 2014.
http://jlne.ws/1pLc5Vu

Despite dire predictions, carbon emissions debate continues 
Chuck Raasch, St. Louis Post-Dispatch 
The White House has made dire long-term predictions about the impact that climate change will have on Midwestern agriculture, forests, water and wildlife. 
http://jlne.ws/U6CfIm

Natural Gas / Coal

Cheniere signs 20-year deal to export gas to Spanish company
Timothy Cama, The Hill
Cheniere Energy Inc. has signed a 20-year, $5.6 billion deal to ship liquefied natural gas (LNG) to a Spanish company from its planned terminal in Corpus Christi, Texas. 
http://jlne.ws/1oMMLkm

Turkey’s TPAO signs deal to buy Total’s stake in Azeri gas project
Reuters
Turkey’s state oil company TPAO signed a deal on Friday to acquire French energy company Total’s 10 per cent stake in Azerbaijan’s Shah Deniz gas project, at a signing ceremony in Istanbul. 
http://jlne.ws/1gXht7W

How fracking helps America beat German industry 
Christoph Steitz and Ernest Scheyder, Reuters
Nestled in the green hills of southern Germany, chemical giant Wacker Chemie churns out a wide range of products, from an ingredient for chewing gum to the polysilicon crystals in solar cells. 
http://jlne.ws/1hr53We

The War On Coal Miners: How Companies Hide The Threat Of Black Lung From Watchdogs And Workers
Dave Jamieson, HuffPost
The dust was so thick that Justin Greenwell could barely see what was in front of him. 
http://jlne.ws/1tARZxq

Pakistan’s Coal Rush: A Bubble Waiting to Burst
Farrukh Zaman and Chaitanya Kumar, Inter Press Service
Mukhtar Ali is one of the many Pakistanis who are furious at politicians and authorities for failing to provide citizens with a regular supply of electricity during the smouldering summer months. 
http://jlne.ws/1tARFPb

Oil, gas wells often keep operating despite violations
Laura Arenschield & Jennifer Smith Richards, The Columbus Dispatch  
Ohio has more than tripled its number of inspectors of oil and gas wells in the past five years. 
http://jlne.ws/1hqWVFm 

Neighbors fret over scant science on oil, gas drilling health impacts 
Mark Jaffe, The Denver Post
When Noble Energy started drilling a well about 650 feet from Eric Ewing’s rural Weld County home in March, the noise was fierce and the house shook — but that’s not what worries Ewing. 
http://jlne.ws/1pLeAa9

Power 

Scenarios for U.S. Electricity in 2030
Manik Roy, C2ES (Center for Climate and Energy Solutions)
Affordable reliable electricity is a central pillar of modern life.
http://jlne.ws/SnVgoc

Solar market to nearly triple by 2018 as Asia leads Europe-EPIA
Christoph Steitz, Reuters
Globally installed solar capacity will nearly triple over the next four years, boosted by strong growth in Asia, which dethroned Europe as the world’s biggest solar market last year, according to a major industry association.
http://jlne.ws/1gXnnWp

UK can help China become world leader in offshore wind
Jessica Shankleman, BusinessGreen
The British offshore wind industry can play a major role in helping China install 5GW of new capacity off its coastlines over the coming years, a series of new reports by the Carbon Trust has found. 
http://jlne.ws/1pL9sTB

Ecotricity teams up with AEG in fresh energy efficiency drive 
BusinessGreen
Green energy company Ecotricity has teamed up with home appliance brand AEG to hand out energy-saving kits to consumers purchasing energy efficient washer dryers. 
http://jlne.ws/1rBh6V9

Clean Tech

State Action Plan Helps Power Up Electric Vehicle Market 
Luke Tonachel, The Energy Collective
The release of an action plan by state governments that hope to boost the visibility and use of electric vehicles is yet another sign the nation is moving deliberately toward getting gas-burners off the highways and cleaning up air pollution caused by petroleum-powered vehicles.
http://jlne.ws/1n2VfRt

Hydrogen-fueled cars face uncertain market in California
David R. Baker, SFGate 
Cars that drive hundreds of miles on a tank of hydrogen and spew nothing from the tailpipe but water will hit the market this month in California. 
http://jlne.ws/1nWU5b7

Water 

NASA’s Jason-2 satellite monitors warming ocean waters in the South Pacific 
Kathleen Kudlinski, New Haven Register
This has been a cold, miserable spring. There. I said it. Global warming was just not happening here.
http://jlne.ws/1khx6rw

Drought brings California gold prospectors back to life 
Scott Gold, Los Angeles Times 
David Fiori, waist-deep in the chilly Kern River, braced against the current, stabbed a shovel into the ancient silt between his feet and tossed the muck downstream. 
http://jlne.ws/1tANxP9

Map: The Ogallala Aquifer – A Freshwater Bonanza in Decline
Circle of Blue
Hydraulic pumps and mechanized irrigation equipment gave America’s Great Plains farmers access to seemingly limitless subterranean water wealth: the Ogallala Aquifer. 
http://jlne.ws/1hPD7WL 

Miscellaneous 

How Will Climate Change Affect the Sahara? 
Gautam Naik, The Wall Street Journal
At the end of the last ice age, about 11,000 years ago, northern Africa became a grassland, home to fish, elephants and thousands of people. Then, 5,000 years ago, scientists say, it abruptly turned into an enormous wasteland–the vast desert that we now call the Sahara. 
http://jlne.ws/1pLhUCc

The Surge in Investing by Conscience
Anna Bernasek, The New York Times 
Financial risk and return may be the main focus of most investments. 
http://jlne.ws/1hr3tDO 
***LB: Also in this story “Investment funds incorporating environmental, social and corporate governance criteria in their decisions had net assets of $1 trillion in 2012, up from $202 billion in 2007, according to US SIF.”

 

 

 

 

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