January 9, 2012

Flexible and Robust International Environment Treaties Can Help Solve Global Environmental Problems

Filed under: climate, INECE Secretariat — inece @ 5:12 pm

Washington, DC, January 2012 – With the adverse impacts of climate change and threats of other serious environmental impacts growing ever nearer, there has never been a greater demand for international environmental governance, including through multilateral environmental agreements.

But in difficult economic times, it is important to understand how to provide more environmental governance without more government, including through trans-governmental networks such as INECE, and other networked regime complexes, according to Dr. Oran Young of the Bren School of Environmental Science and Management, University of California, Santa Barbara.

In a paper published recently in the Proceedings of the National Academy of Science, Dr. Young explains that often “regime complexes” can provide the most effective governance:

“Many issue areas (e.g., climate, biodiversity, and marine pollution) feature networks of distinct regimes …that grow up over time in the absence of an overall blueprint. … Regime complexes offer the advantage of being more flexible across issues and adaptable over time than more tightly coupled governance systems. They may be easier to create than fully integrated systems and more resilient to the sorts of stresses occurring at the international or global level today.”

Dr. Young notes that the Montreal Protocol as an example of an effective regime.  The Montreal Protocol is a dynamic treaty that continues to evolve, to improve, and to grow stronger, phasing out almost 100 ozone-depleting substances and placing the ozone layer on a path to recovery later this century.  It also has provided a net of 135 billion tones of CO2-eq since 1990, more than ten times the mitigation of Kyoto in its first commitment period.  Other successful regimes Dr. Young mentions are the governance system for the Antarctica, and the multilateral system to clean up the Rhine River.

In addition to formal compliance systems, Dr. Young notes that “Other factors, such as the extent to which subjects have engaged actively in the process of regime creation and the extent to which they feel that a regime constitutes a fair deal, can make a big difference in inducing actors to comply….”

The abstract is available here: http://www.pnas.org/content/early/2011/11/30/1111690108.abstract

December 8, 2011

Defining the Shape of Compliance at the Durban Climate Talks

Filed under: climate — inece @ 11:46 pm

Parties to the United Nations Framework Convention on Climate Change (UNFCCC) are meeting in Durban, South Africa, from November 28 to December 9, 2011, to discuss the future of collective action by the nations of the world to curb climate change.  Most relevant to environmental compliance and enforcement practitioners are negotiations concerning (1) national reporting, (2) rules for accounting for emissions offsets from forestry practices, and (3) accountability mechanisms relating to the provision of support for developing countries.

Parties to the UNFCCC recognize that the international community cannot monitor compliance with commitments without trustworthy information on countries’ mitigation and support activities.  Much of what needs to be accomplished in Durban focuses on rules relating to the content, accuracy, transparency, completeness, and comparability of information that countries will be required to report.

COP17 negotiations will cover two types of topics that are critical to the integrity of information on emissions, mitigation actions, and provisions of support.  The first concerns the form and content of nationally provided data, consisting of annual greenhouse gas inventories, national communications, and biennial reports.  The second area of concern focuses on a framework for ensuring that countries are up to the task of reliably providing this information.  These procedures consist of international assessment and review (IAR) for developed countries and international consultation and analysis (ICA) for developing countries.  Together, these measures comprise the framework for measurement, reporting, and verification (MRV) that is the central mechanism for ensuring compliance.


November 10, 2011

Reducing the Risks of Illegal HCFC Trade

Filed under: climate, Environmental Crime — inece @ 2:12 am

The most recent UNEP OzonAction Newsletter, Tipping the Balance Towards Climate Protection through the HCFC Phase-Out, presents a selection of articles controlling HCFCs.

Of particular interest to compliance and enforcement practitioners is the article Reducing the Risks of Illegal HCFC Tradeon page 16. The article, written by Tapio Reinikainen of the Finnish Environment Institute and by Heli Lampela of the Finnish National Board of Customs,  looks at the conditions that can be conducive for illegal trading in HCFCs and at the potential solutions, with a focus on capacity building among customs officers.

Australia Announces First Carbon Legislation

Filed under: Australasia, climate — inece @ 1:50 am

On November 8, 2011, Australia’s parliament passed the country’s first carbon legislation, known as Clean Energy Bill 2011.  The new law establishes a tax on carbon emissions at a fixed level for a three-year period beginning in July, 2012, after which the carbon tax will be transformed into an emissions trading scheme.  Initially, only about 500 of the country’s largest emitters will be covered by the new regulation, but this will gradually expand to cover broader segments of the economy.

Under the new legislation, covered entities will be issued a limited number of Australian Carbon Credit Units (ACCUs) and must surrender a certain number of units for each tonne of emissions for which they are liable or make payment to cover the shortage.  Covered entities may purchase additional units from the government, but may only satisfy up to 5% of their total emissions obligations by surrendering ACCUs.

Transition to an emissions trading system

Following the initial three-year period, the carbon regime will transition into an emissions trading system.  During the first three years of the trading scheme, there will be a transitional price ceiling and price floor. The intent is that these be set at a level significantly higher than the expected price for the price ceiling and lower than the expected price for the price floor.

Linkage to international trading markets

The new regulation anticipates that liable entities will eventually be able to use both eligible ACCUs and eligible international units to meet their liabilities to provide emitter with additional flexibility under the mechanism. Covered entities may exceed the emission cap if they offset the excess emissions with eligible ACCUs or eligible international units. The use of international units will be subject to qualitative and quantitative restrictions in order to ensure the environmental integrity and ongoing credibility of the emission trading system.

Official Australian carbon legislation site

link to: http://www.climatechange.gov.au/en/government/submissions/clean-energy-legislative-package.aspx

October 26, 2011

European Commission proposes legislation to bolster security in the carbon spot market

Filed under: climate, Europe — inece @ 9:01 pm

After completing an extensive review, the European Commission has proposed legislation to bring transactions for the immediate delivery of carbon allowances (spot trading) under the same stringent regulatory scheme for financial markets that already applies to other EU allowance  transactions, the vast majority of which consist of derivatives (futures, forwards, and options).

Citing repeated market abuses associated with the spot market for EU allowances (EUAs) and weak oversight mechanisms, the Commission seeks to enhance the overall transparency and integrity of the carbon market which is at the core of the European Union’s Emission Trading Scheme (EU ETS).  Classifying allowances as financial instruments would place them within the scope of the second Markets in Financial Instruments Directive (MiFID) and Regulation (MiFIR).  In addition, proposals for a new Market Abuse Regulation (MAR) and a Criminal Sanctions for Market Abuse Directive (CSMAD) specifically address insider trading and market manipulation issues. The combined MiFID/MAD regime would exempt individual ETS compliance buyers and certain other non-financial entities.

The Commission weighed the impacts of classifying emission allowances as financial instruments with the idea of creating a tailor-made regulatory system, taking into account the unique attributes that characterize allowances.  After engaging in a dialogue with industry leaders, Member States, carbon traders, and other stakeholders, the Commission concluded that the regulatory framework governing the secondary market for securities was closely aligned with those of the spot market for EUAs.  In addition, the fact that the lion’s share of carbon transactions automatically fell under the purview of EU financial regulation because of the high proportion of derivatives traded meant that considerable effort would be expended in administering a parallel system. Finally, the use of two systems might lead to conflicting and inconsistent regulation of transactions.  The inclusion of all EU allowance trading covered under the new regulatory regime is expected to provide the high level of integrity and stability that the ETS will require as reliable engine of economic growth.

June 9, 2011

New Ecosystems Climate Alliance Report Looks at Nationally Appropriate Mitigation Actions and REDD+.

Filed under: 9th Conference, biodiversity, climate, Forests — inece @ 9:02 pm

credit: Anton Raath

A new paper developed by the Ecosystems Climate Alliance looks at the relationship between Nationally Appropriate Mitigation Actions and REDD+. The paper argues that Parties should not allow the extensive work put into REDD+ to now be undermined by the use of alternative and less stringent provisions relating to Nationally Appropriate Mitigation Activities (NAMAs). The paper identifies two key issues that need to be resolved to avoid the possibility of NAMAs undermining REDD+:

  1. Parties should clarify that mitigation activities in the forest sector, including those considered as NAMAs, must comply with the REDD+ provisions, and
  2. Parties should also develop suitable safeguards applicable to NAMAs, drawing upon lessons learnt from the REDD+ safeguards.

To access the paper, visit Nationally Appropriate Mitigation Actions – Undermining REDD+ in the Forest Sector?

February 28, 2011

UNEP Governing Council Concludes with Support for Green Economy, Environmental Governance Reform

Filed under: Chemicals & Waste, climate, UN System — inece @ 7:18 pm

From the UNEP Press Release:

A major sustainable development conference in Brazil next year offers a key opportunity to accelerate and to scale-up a global transition to a low-carbon, resource-efficient Green Economy, a meeting of the world’s environment ministers has signaled.

Potential challenges, including new kinds of trade barriers, need to be managed. But a Green Economy offers a way of realizing sustainable development in the 21st century by “building economies, enhancing social equity and human well-being, while reducing environmental risks and ecological scarcities”.

Ministers called on the UN Environment Programme (UNEP) to support countries keen to operationalize such a transition and to play a key and ‘active’ role in putting the challenges, opportunities and strategies towards a Green Economy firmly on the agenda for next year’s landmark meeting.

The UN Conference on Sustainable Development 2012, or Rio+20, also needs to address how the world can better manage and govern the environment including by evolving and strengthening the institutions responsible.

The ministers responsible for the environment, who have been meeting this week at UNEP headquarters, expressed concern that the overall efforts of the United Nations and nations in respect to the ‘environmental pillar’ of sustainable development remained weak, underfunded and fractured.

In their summary of discussions, released today at the close, many delegates said countries needed to move beyond pinpointing shortcomings and to focus on a real reform agenda in the run up to Rio+20.

For more information, see  the full list of decisions, the Chair’s summary, and other related documents at http://www.unep.org/gc/gc26/; IISD’s coverage of the event at http://www.iisd.ca/unepgc/26unepgc/; and the UNEP Green Economy  site at http://www.unep.org/greeneconomy.

February 2, 2011

Ramsar Convention on Wetlands Celebrates 40th Anniversary

Filed under: biodiversity, climate, water — inece @ 7:30 pm

The Ramsar Convention on Wetlands celebrates its 40th Anniversary on 2 February 2011, marking the day that 18 nations agreed, in Ramsar, Iran, in 1971, on the text of the Convention.

The Ramsar Convention, which currently has 160 Contracting Parties, is an intergovernmental treaty that embodies the commitments of its member countries to maintain the ecological character of their Wetlands of International Importance and to plan for the “wise use”, or sustainable use, of all of the wetlands in their territories. The Ramsar Secretariat has developed 12 Key Messages on wetlands in recognition of the Convention’s 40th Anniversary, which can be accessed online.

As the Key Messages recognize, wetlands provide irreplaceable ecosystem services, including provision of food, water purification, storage and supply of freshwater, flood control and storm protection, and recreation. Wetlands are frequently areas of high biodiversity and many species are wetland-dependent for all or part of their lifecycles. Wetlands also have a key role to play in the carbon cycle and in climate change mitigation and adaptation.  As part of a renewed commitment to Ramsar on the occasion of its 40th anniversary, countries could evaluate areas to strengthen enforcement of existing laws to protect wetlands and, where necessary, strengthen relevant legislation.

WSJ: European Emissions Markets to Reopen Gradually

Filed under: climate, Environmental Crime, Europe — inece @ 6:59 pm

The Wall Street Journal reports:

European markets for permits to emit carbon dioxide will start reopening in the next week after a shutdown following the dramatic cybertheft of permits valued at tens of millions of euros two weeks ago, EU officials said Tuesday.

The theft, by a ring of hackers who phoned in a bomb threat to the Czech carbon exchange and stole permits during the ensuing confusion, was the latest in a series of security breaches in the market, which has turnover of $100 billion a year. Permits valued at about €28 million ($38 million) were stolen in three European countries, EU officials said. …

Interpol, Europol and national police in several countries say they are continuing to recover stolen permits, but questions remain about the security of the registries where transaction records are kept for each of the 30 national markets.

Markets in Germany, France, the Netherlands and the U.K. are expected to be first to restart trading, but it remains unclear how much longer other registries will remain closed. Traders expressed concerns over the further market disruption caused by Germany’s canceling of its Tuesday spot auction because some security issues hadn’t yet been resolved.

The European Commission, the European Union’s executive arm, says the markets can only reopen once it has certified their security systems. But delays in writing and testing the software have extended the time frame, and some countries might not be ready to restart trading for several months, EU officials said.



January 4, 2011

EU Explores Possibility for Enhanced Oversight for the European Carbon Market

Filed under: climate — inece @ 11:10 pm

On 21 December 2010, the European Commission published a Communication (pdf) on carbon market oversight. This Communication provides a first assessment of the current level of protection of the carbon market from market abuse and similar problems. It concludes that a major part of the carbon market is subject to appropriate oversight, but that more may be needed in the so-called “spot market.”

According to the EU press release,

“The carbon market in Europe has developed well since the launch of the EU Emissions Trading Scheme in January 2005. From a market oversight perspective, it can be concluded that a major part of the carbon market is subject to appropriate market regulation already, namely the trading in derivatives of allowances and other units that can be used for compliance in the EU ETS (currently CERs and ERUs), which largely falls under financial markets regulation. However, the spot trading in emission allowances is currently not regulated at EU level, while a handful of Member States have decided individually to extend rules applicable to trading in financial instruments to such allowances when traded on spot markets established within their jurisdictions. The spot market is relatively limited and represented no more than 20-25% of the total trading volume in the European carbon market in 2009.”

The Commission will convene an internet-based stakeholder consultation during the first half of 2011 to solicit advice on how best to enhance the level of market oversight and ensure the continued integrity of the carbon market.

The Commission will evaluate the costs and benefits of a number of options for enhancing the carbon market oversight framework. These options include:

  • “the inclusion of the European carbon market under financial markets legislation, e.g. by replacing the currently existing spot trade by trade in “spot futures” admitted to trading in regulated markets.”
  • “the option to define EU ETS compliance units as financial instruments will also be explored, with particular focus on the suitability and proportionality of such an approach.”
  • “bringing spot transactions in EU ETS compliance units – as instruments in their own right – under the ambit of rules set out in the Market Abuse Directive and/or the Markets in Financial Instruments Directive as well as any other financial markets legislation necessary for the efficiency and integrity of the carbon market.”

For more information, see the Commission’s Communication on carbon market oversight or visit the “oversight” section of the EU Commission on Climate Action’s website at http://ec.europa.eu/clima/policies/ets/oversight_en.htm.

For more on INECE’s work on integrity and accountability in emissions markets, see http://www.inece.org/climate/.

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