Durban Deal May Do Little To Cool Heating Planet

Jon Herskovitz PlanetArk 14 Dec 11;

The world is forecast to grow hotter, sea levels to rise, intense weather to wreak even more destruction and the new deal struck by governments in Durban to cut greenhouse gas emissions will do little to lessen that damage.

Climate data from U.N. agencies indicates that the accumulation of heat-trapping gases will rise to such levels over the next eight years - before the newly agreed regime of cuts in emissions is supposed to be in place - that the planet is on a collision course with permanent environmental change.

Countries around the globe agreed on Sunday to forge a new deal forcing all the biggest polluters for the first time to limit greenhouse gas emissions by 2020. But critics said the plan was too timid to slow global warming.

For a reduction plan to have a major impact, analysts say, the world's largest emitter, China, needs to be weaned from coal-intensive power sources that are choking the planet with carbon dioxide (CO2) and developed countries must spend heavily to change the mix of sources from which they draw their energy.

But they see little political will to implement these costly plans and argue that the U.N. process showed, in two weeks of talks in the South African city of Durban, that it is bloated, broken and largely incapable of effecting sweeping change.

"The challenge is that we begin the talks from the lowest common denominator of every party's aspirations," said Jennifer Haverkamp, director of the international climate program for Environmental Defense Fund, a U.S. group which campaigns against pollution.

"For this effort to be successful, countries need to be ambitious in their commitments and to refuse to use these negotiations as just another stalling tool," she said.

Domestic political constraints make it unlikely that pledges in Durban for more green projects in the developed world and stepped up aid for developing countries will come to fruition given problems for government funding in Europe, the United States and Japan.

PROTOCOL ON LIFE SUPPORT

In about 20 years of negotiations, the U.N. process has produced one binding deal on emissions cuts, the 1997 Kyoto Protocol. It is seen as a fading accord affecting a handful of developed states that now account for only 25 percent of global emissions, and was kept on life-support by the Durban deal.

The latest agreement extends limits on advanced countries that would otherwise expire next year. But it is widely seen as not doing nearly enough to make a dent in emissions.

The pact, known as the "Durban Platform," produced the promise of a new legally binding deal by 2020 and set out a road map to get there. The worry is that by the time any new provisions take effect, they will have been diluted in negotiation to the point of being meaningless, analysts said.

China, the United States and India, the world's three biggest emitters accounting now for about half of all global CO2 emissions, are not bound by Kyoto and would not be bound to any legally enforceable numbers until at least 2020.

The three have been accused by environmental lobby groups for years of blocking tough measures, and all three cite domestic priorities in their defense. The U.S. Senate needs a supermajority to approve global treaties and does not have a broad enough coalition to sign off on a global climate deal.

India and China said curbing their emissions would hurt their fast-growing economies and put hundreds of millions of their people at risk as they try to escape poverty.

RISK OF PERMANENT DAMAGE

But those calling for tighter curbs on emissions say that those populations are being put at greater risk by climate change: "The people of the world are the biggest losers because the governments are kowtowing more to the corporate interests than the interests of the people for more aggressive action," said Alden Meyer of the Union of Concerned Scientists.

Myer, a veteran of the U.N. climate talks, called for greater ambition on emissions cuts and financial support for industrial change and for "a more collaborative spirit than we saw in the Durban conference centre these past two weeks."

National envoys to the U.N. climate process and scientists who brief them see a need to limit the global average temperature rise to at least 2 degrees Celsius over pre-industrial times to prevent the most serious climate change. Environmental groups have said even that is not enough.

The United Nations Environment Programme said in a report last month that emissions were on track to grow above what is needed to limit global warming to the 2-degree mark, with analysts warning that delays in cuts for developed states and curbing the furious pace of emissions growth in major developing countries increasingly put the planet at risk.

Myer said: "We are on a path to 3-3.5 degree Celsius increase if we don't make aggressive cuts by 2020.

"And there is nothing to suggest this deal will alter that."

As temperatures rise, so does the damage, which includes crop failures, increasing ocean acidity that would wipe out species and rising sea levels that will erase island states, U.N. reports said.

The Organisation for Economic Cooperation and Development said global average temperatures could rise by 3-6 degrees by the end of the century if governments failed to contain emissions, bringing permanent destruction to ecosystems.

The International Federation of Red Cross and Red Crescent Societies, the world's largest disaster relief network, saw the Durban deal as a collective failure to stem the destruction caused by climate change on the world's most vulnerable people.

"It is frankly unacceptable we cannot all agree when so many lives are at stake," Bekele Geleta, the group's secretary general said in a statement.

Selwin Hart, chief negotiator for an alliance of small island states, took some heart, however, that at least there was agreement to keep on talking: "I would have wanted to get more, but at least we have something to work with," he said.

"All is not lost yet."

(Additional reporting by Nina Chestney, Barbara Lewis and Agnieszka Flak in Durban; Editing by Alastair Macdonald)

Carbon Markets Still On Life Support After Climate Deal
Nina Chestney and Jeff Coelho PlanetArk 14 Dec 11;

Carbon markets are still on life support after a U.N. climate deal agreed in South Africa on Sunday put off some big decisions until next year and failed to deliver any hope for a needed boost in carbon permit demand.

A package of accords agreed after marathon U.N. talks in Durban extended the 1997 Kyoto Protocol, the only global pact enforcing carbon cuts, allowing five more years to finalize a wider deal which has so far eluded negotiators.

Kyoto's first phase, which is due to expire at the end of next year but now will extend until 2017, imposed limits only on developed countries, not emerging giants like China and India. The United States never ratified it.

Many traders and analysts said the agreement will do little for carbon prices which are at record lows, as the two main European Union and U.N.-backed markets are stricken by flagging investments, an oversupply of emissions permits and worries about an economic slowdown.

"It's a sedative situation, in which a sick market needs a cure and instead of deciding which cure to use, the doctors keep using pain relief to gain more time to make the final prognosis," said Jacopo Visetti, carbon trader at AitherCO2.

POSITIVE SIGNAL

The deal gave a positive signal to investors uncertain about the fate of Kyoto's Clean Development Mechanism (CDM), which gives developed nations and firms carbon offsets in return for investing in carbon-cutting projects in poor nations.

New investment in the CDM fell last year to just a fifth of its record high in 2007 of $7.4 billion as many clean energy project developers and traders scaled back their activities.

"We are more encouraged than we were last week," said Ian Simm, chief executive at Impax Asset Management, which has just over 2 billion pounds under management and invests in environmental markets.

"It confirms that there will be parts of the world that will continue to accelerate the development of markets for cleaner technology," he said.

But carbon offsets under the CDM, so-called certified emission reductions, were trading just above 5 euros a tonne on Monday, near record lows.

Many observers are doubtful of a rebound in demand for the permits.

"Thanks to Durban, the CDM will live to see another day, but demand for credits for these projects is lackluster," said Jonathan Grant, director of carbon markets and climate policy at PricewaterhouseCoopers.

DOLDRUMS

"Carbon markets are expected to stay in the doldrums, because of oversupply in the (European carbon) market as a result of the recession," Grant said.

The world's biggest carbon market, the EU's emissions trading scheme, caps the emissions of some 11,000 polluting power firms and industrial plants in 30 countries.

EU carbon prices have lost over half their value since June mainly due to economic growth concerns and over-supply, trading around record low levels below 8 euros a tonne on Monday.

Durban's deferral of some key decisions on new market mechanisms until next year left many frustrated.

"(It's) impossible to take any longer-term decisions," said Per Lekander, an analyst at Swiss bank UBS. "You don't know what to do and what (is the) validity of different instruments."

Without major emitting nations spelling out their emission reduction targets, the deal will do little to spur demand in carbon markets, already oversupplied with hundreds of millions of permits and international credits.

"It's an agreement between parties to arrange another agreement. It is more or less like a mother that tells her child 'ok, we will do it,'" said Matteo Mazzoni, carbon analyst at Nomisma Energia in Italy.

Instead, carbon prices are expected to be driven more by European growth prospects.

"It's possible that carbon prices have seen their floor. But the positive momentum given by Durban can only be sustained if the resolution on the European debt crisis continues on the right path," analyst Emmanuel Fages at Societe Generale said. "The uncertainty remains."

Trevor Sikorski, head of carbon research at Barclays Capital, said: "Supply is still the fundamental problem." He estimated a surplus of over a billion EU and international carbon credits during the period 2008-2012.

He expects the EU carbon market to be oversupplied through 2020, though sees some chance of carbon prices bouncing when big European utilities start hedging their sales of carbon-intensive power generation for 2013.

"A sustained increase in prices is probably not going to happen until the end of next year," Sikorski said.

(Editing by Jason Neely)