Developing nations may accept a  global harmonized carbon price as long as they receive the money from setting that amount as well as a portion of funds raised by developed nations that have mostly caused climate change, said Silverstein, a researcher and teacher at the Royal Institute of Technology in Stockholm.

He told Bloomberg: “You could set a harmonized global floor price or tax rate in a year … You have some sort of scaffolding to allow global climate finance to develop in a more structured way.”

To read the full article, click here.

Stockholm.

“The introduction of carbon tax is not on the political agenda,” Fu Zhihua with the Financial Science Research Institute, a Ministry of Finance-affiliated think-tank told Point Carbon News.

The statement comes days after the state-owned journal Economic Information Daily reported last week that Fu’s think-tank had submitted a carb0n tax proposal to the ministry and that heavy energy users were likely to be subject to the tax within the next three years.  Various international media reported on the planned carbon tax in recent days, including The Australian and Wall Street Journal. We posted this story yesterday.

The advice was sought after Opposition Leader Tony Abbott pledged to repeal the carbon price, and following the introduction of the legislation into Parliament in September, he says. Under the legislation, carbon units are defined as “personal property”, prompting claims that Labor had planted a “poison pill” to ensure a future Coalition government would be forced to pay compensation to companies that had bought forward permits.

To read the full article, link here: Pressure on to release carbon tax advice (paid subscription required)

Read more: http://community.nasdaq.com/News/2012-01/chinas-planned-carbon-tax-puts-the-spotlight-on-australias.aspx?storyid=112807#ixzz1j1TKpkeg

The BBC reports that each airline is allowed a specified amount of CO2 emissions. If the airline emits more than that amount, it must purchase carbon allowances. If it emits less than its limit, it can sell its extra allowances to other heavy carbon emitters, such as other airlines, steel makers, refineries or power plants. Airlines are saying they will pass along to their customers by raising fares. 

German air carrier Lufthansa, for instance, told the Associated Press that would have to buy at least 35 percent of the certificates it needs based on past emissions and recent growth. It put the cost at $168 million in 2012.

Bloomberg quotes aviation information provider OAG as estimating the total cost to European Union industry at about $4.5 billion.

American carriers already increased fares for European flights last week, though the New York Times reports that the House of Representatives has approved a bill that would bar American air carriers from participating in the system. A similar bill has been introduced in the Senate.

The last Ice Age ended about 11,500 years ago, and when the next one should begin has not been entirely clear. Now researchers say they have used data on the Earth’s orbit  to find the historical warm interglacial period that looks most like the current one. In a recent article in the journal Nature Geoscience, scientists say that the next Ice Age would begin within 1,500 years – but emissions have been so high that it will not.

The scientists, from Cambridge, University College London, the University of Florida and Norway’s Bergen University have calculated that the atmospheric concentration of CO2 would have to fall below about 240 parts per million (ppm) before the glaciation could begin. That’s well below the current level is around 390ppm.

BBC News quotes Luke Skinner from Cambridge University as saying: “At current levels of CO2, even if emissions stopped now we’d probably have a long interglacial duration determined by whatever long-term processes could kick in and bring [atmospheric] CO2 down.”

Read more here:  http://www.theatlanticwire.com/technology/2012/01/benefits-wind-power-questioned/47146/

According to his article today, the floor price proposal contained in an options paper was released last week amid falls in the international price of carbon. In Europe, the price of carbon has dropped to near record lows driven by fears of a recession and is trading around $8.20, in contrast to the starting fixed price under the Australian scheme of $23.

But Australian companies’ ability to take advantage of low prices to meet obligations after the fixed-price period have been limited as a result of the agreement between Labor, the Greens and independent MPs to ­create a floor price. As a result, companies that buy cheap international permits will pay a top-up fee if they are worth less than the floor price.

To read the full article, link here: Carbon costs to bite: business (paid subscription required)

EU allowances for December increased 3 percent to close at 6.80 euros ($8.66) a metric ton on the ICE Futures Europe exchange in London, the biggest one-day jump since Dec. 20, according to Bloomberg. United Nations Certified Emission Reduction credits for December were 3.1 percent higher at 3.71 euros a ton.

European carbon has dropped 54 percent in the past year as the region’s debt crisis weakened the region’s economy amid rising supply. The UN-overseen executive board that regulates the offset market handed out 21.5 million tons of new CERs in the two weeks ending Jan. 6, according to data from the UN Framework Convention on Climate Change website compiled by Bloomberg.

Allowances may drop to a record low this week as the European Investment Bank reports Jan. 11 on its first sales of 2013 permits, the first year of the market’s third phase, said Bloomberg New Energy Finance.

De Boer, now special adviser on climate change to KPMG, was the architect of the Copenhagen climate summit of 2009, at which countries made voluntary commitments to cut their emissions by 2020. Many countries, green campaigners and businesses complained that the system of voluntary commitments did not provide the certainty needed to spur the development of a low-carbon economy across the globe.

He told The Guardian that businesses should interpret the talks as a “clear signal that the international community is committed to taking the climate change agenda forward, that market-based mechanisms [such as carbon trading] will continue and that there will be clear reporting guidelines” on carbon dioxide emissions, which will affect companies.

Read more here: http://www.guardian.co.uk/environment/2012/jan/05/business-must-get-ready-for-low-carbon-world

In a carefully worded research paper, the commission has asked the government to clarify the objectives of the assistance package. “Clarifying the key policy objective (or objectives) for assistance arrangements is a threshold requirement,” the commission said. Last year the commission was given the key role of reviewing industry assistance – worth $9.2 billion over the next four years – for companies in the steel, coal, gas and other emissions-intensive sectors.

To read the full article, link here: Report wants carbon assistance clarified (paid subscription required)

Just a short note to wish everyone happy holidays and let you know that GCS has moved. Our new offices are listed under the Contact tab.

Best wishes from the GCS team

More than 30 documents emerged from the meeting, which were adopted under the UN’s two negotiation tracks: LCA and Kyoto. The main outcomes are summarised below:

Legally binding deal

Agreement was reached to launch a Platform for Enhanced Action. All parties to the UNFCCC will begin discussions next year to “develop a protocol, another legal instrument or an agreed outcome with legal force” by 2015. This new mechanism “shall raise the level of ambition” and is expected to take effect after 2020. Exact wording is to be worked out.

Kyoto Protocol

Rich countries willing to take part in a second Kyoto commitment period from 2013 will submit details of their emissions targets to the UNFCCC by May 2012. These will be formally adopted at the next UN climate meeting in Qatar at the end of the year.

It is not yet clear whether the new commitment period will run until 2017 or 2020.

At the moment, the text includes a 20% or 30% emission reduction target for the EU and goals for some individual countries like Norway (-30% to -40%).  Canada, Japan and Russia are opting out of new targets. It’s still unclear if Australia and New Zealand will participate.

The text adopted in Durban also adds nitrogen trifluoride (NF3) to the group of greenhouse gases already covered by Kyoto : CO2, methane, N2O, HFCs, PFCs and SF6.

REDD+ forestry projects

REDD+ projects in developing countries aimed at climate mitigation and biodiversity protection could be financed through market-based mechanisms, according to the final text.  An advisory body is to consider a paper on the financing of different types of activities that will be considered. This body will report back at the next COP meeting in Qatar.

Delegates also adopted separate guidance on social and environmental safeguards agreed at the Cancún meeting in 2010, which NGOs had called for in Durban. This guidance document also deals with the controversial forest reference levels.

LULUCF emissions

Climate negotiators adopted a decision on emissions reductions from land use, land-use change and forestry (LULUCF) that backed the approach advocated by the EU. An annex to this decision gives forest management reference levels for a number of countries, based on factors including projected forestry activities.

Green Climate Fund

The rules for the fund have been agreed, allowing it to start work later this year. Germany and Denmark have pledged money to the fund but most countries say they are waiting until it is up and running. There is no further clarity on how the $100 billion a year promised by industrialised countries from 2020 will be allocated.

Bunker fuels

A number of initiatives to tackle emissions from international shipping and aviation were discussed as part of a debate on sectoral approaches, including a levy on shipping that could be used to help finance the Green Climate Fund. In the end, no decision was reached and the issue was pushed back to next year.

The International Maritime Organization (IMO) and International Civil Aviation Organization (ICAO) both intend to press ahead with plans to develop market-based mechanisms for cutting emissions within their sectors over the next year.

The so called the Carbon Initiative for Development (CI-Dev) fund will provide up-front finance for emission reduction projects in least developed countries, the article reports. It also reports that the first US$10 million in finance will be used to help fund capacity building, the drawing up of methodologies, while a further US$50 million of upfront financing will be used to kick-start projects in areas where getting projects up and running is often difficult .

Another €50 million ($70 million) will then be raised through the private sector and governments in credit purchase agreements similar to the more traditional funds, the article quotes a World Bank official as saying.

The reported bio carbon fund will focus on afforestation and reforestation projects. It would be the third slice of the existing World Bank BioCarbon fund.