Oh, mama, can this really be the end Bob Dylan

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Oh, mama, can this really be the end (Bob
Dylan)
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Geog 214 Midterm

• Midterm - Thursday, March 2nd (in class)
• Note on expectations and exam structure -
  Thursday, February 16th.

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Canadian Climate Change Policy

• Carbon Sinks CDM Supplementarity Compliance
  Financial Mechanisms
• Canadian Policy
• Adaptation vs Mitigation
• Tradeable Permits

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Website of the Week

• www.env.gov.bc.ca/air/climate
• B.C.s climate change plan

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Sources of greenhouse gases, by sector for
Canada, 2003
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5. Finance

• G77 and China stressed that the developed world
  has failed to meet its commitment under the 1992
  Convention to provide money, technology and
  technical assistance.
• OPEC asking for compensation
• Who wins and who loses?

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What are we talking about?

• New governance structures
• Major shifts in the global energy economy
• Economic costs?
• Can Russia or the US hold the world hostage (with
  help)?
• Better scientific assessment

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Canadian Options for GG Emission Reduction

• 1. Canadian Govt.
• Due to growth in GDP and population, it is
  unlikely that we will be able to meet
  stabilization - let alone reduction to the Kyoto
  targets - of GG without additional - possibly
  costly - measures.
• 2. Royal Society of Canada (COGGER)
• It is feasible and cost effective to achieve
  stabilization, and even a reduction of 20 by
  2010 (this from 1998).
• Improved energy efficiency is the key, not fuel
  switching.
• Govt. policy will be required.
• Emphasis on market-based instruments.

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Canadas Plan for Meeting Kyoto Commitments

• 1990 Emissions 596 Mt
• Kyoto target 560 Mt (av for 2008 2012)
• 2005 Emissions 830 Mt (270 Mt gap)
• Where will this come from???
• Large Final Emitters (LFE) system (700 large
  companies, mainly in mining and manufacturing
  oil and gas and thermal electricity account
  for almost 50 of total emissions (85 firms
  account for 85 of this)

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• Target 45 Mt CO2e (was 55) Strategy -
• In-house reductions
• Purchase credits from other LFEs
• Investing in offsets (other projects)
• Purchase of international credits
• Auto Industry
• Voluntary reductions up to 5.3 Mt
• Renewable Energy Investments
• Setting up Climate Fund
• Encouraging Domestic Reductions

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• Use Climate Fund to buy credits from business
  agriculture etc.
• Purchase international credits (75 110 Mt), but
  these must be real and verified emission
  reductions (not hot air from Russia) but
  international market???
• Still many unknowns

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Adaptation to Climate Change

• Most of the discussion has focused on limitation
  strategies... but what about other alternatives?
• Arguments Against Adaptation
• 1) Considering adaptation assumes that climate
  change is "inevitable and manageable," so no need
  for limitation
• 2) Initiatives are not necessary, since society
  is readily able to adapt to its environment.
• But, some climate change is likely, even with
  immediate responses. Some changes will be rapid,
  others slow and cumulative how will systems
  adapt? Which is most vulnerable? Can policies
  be put in place to reduce the potential impacts?

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• Adaptation the process of modifying, or making
  fit or suitable to new conditions.
• Types of Adaptation
• 1) Prevention of Loss taking actions to reduce
  the vulnerability of sectors and regions to
  change (e.g., dredging rivers building dykes to
  withstand Cat 5 hurricanes in New Orleans)
• 2) Tolerating the Loss accept the impact, since
  it does not exceed the capacity of the system.
• 3) Spreading/Sharing the Loss distribute the
  burden over a larger scale (e.g., insurance)

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• 4) Changing Use/Activity structural changes
  intended to assist society in facing the change
  (e.g., dykes along rivers switching crops) and
• 5) Changing Location simply move away from
  vulnerable areas.
• Example? Mackenzie Basin
• - dredge river
• - permanent roads
• - adapt drilling structures
• - adapt pipelines

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Three Basic Mechanisms (to meet emission
reductions internally)

• Voluntary approaches
• Market-Based programs (taxes subsidies)
• Command and Control approaches (regulations)
• Look mainly at market-based programs

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Energy/Environmental Taxes

• 3 Types of Energy Taxes
• 1. Charge on the energy content of the fuels (a
  Btu tax) this would include all energy types
  (places less burden on coal)
• 2. Greenhouse gas tax or carbon tax charged on
  the amount of carbon emitted
• 3. Tax on fuel at the retail level (ad valorem
  tax)

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Countries with Carbon Taxes

• Sweden - 41/tonne (0.09/litre gasoline)
• Finland - 6.10/tonne
• Estimates by EPRI in California are that to
  reduce CO2 emissions by 20, the U.S. would need
  to implement a tax of 250.00 /tonne or approx.
  0.54 /litre gasoline.

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Tradeable Permits Another Solution?

• Set emission targets, then issue permits to
  polluters for emissions up to target level (gives
  firms the right to pollute.
• Allocation of Permits
• Auction
• Grandfathering
• Part of U.S. Clean Air Act includes SO2, CO,
  particulates, ozone, NO and lead. About 15,000
  trades the past 20 years now part of LFE
  strategy
• Can earn ERCs or Emission Reduction Credits

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Tradeable Permit Components

• Offset Policy All non-attainment areas must
  acquire sufficient ERCs to offset their new
  emissions.
• Bubble Policy Multiple emission sources treated
  as if they were a bubble. Activity within
  bubble unregulated, as long as limits are met.
• Netting Firms can avoid stringent review
  process if their net emissions satisfy government
  requirements.
• Emissions Banking Firms can store ERCs and use
  at a later date.
• Could also charge a premium on sale of permits
  (in U.S., firms must purchase 1.2 x ERCs they
  require).

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Advantages

• Decisions are left to the market firms decide
  how to allocate emissions
• Continued incentive for firms to purchase
  abatement equipment, since ERCs can be earned at
  any time
• Permits avoid inflation problems which would
  accompany pollution taxes
• Any organization could purchase permits, even if
  they were non-polluters and
• Least cost method of achieving standards.

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Disadvantages

• No guarantee that governments would not print
  more permits (e.g., if env. group purchased most
  of them)
• Problem of controlling markets on permits and not
  allowing new firms to enter market (could be
  brokered by a neutral party - IMF or World Bank)
  and
• Difficult to verify pollution loadings.
• International Permits Set CO2 emissions at,
  say, 80 of present levels, then allocate
  emissions and allow trading. How do we allocate
  emissions? Population? Existing emissions?

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What Now?

• A global response for the second reporting
  period of Kyoto must be implemented without
  delay
• Need to strengthen research activities
• Need to stabilize emissions of GG (but ensure
  economic development)
• Acknowledge need for developing nations to grow
  and
• Need new strategies and targets now.