Cop15 Failure Analysis PART 3a Transparency, Base Model

Why COP15 Danish Accord Failed? The devil was in the details. PART 3 a TRANSPARENCY (Base Model) Comparing the “DANISH TEXT” with the OBAMA BASIC Deal = MANIPULATING EMISSION TRANSPARENCY. ECO THRUST

THE 10 PART ANALYTICS : PART 1 DISTRUST http://bit.ly/5TNFhd PART 2 EQUITY http://bit.ly/6dtoYm PART 3a TRANSPARENCY Understanding the Base model PART 3b TRANSPARENCY Benefits and Drawback assessment PART 3c TRANSPARENCY Developing a suitable architecture PART 4 DEFORESTATION PART 5 ADAPTATION PART 6 FINANCE PART 7 GREEN CLIMATE FUND PART 8 KYOTO AND ANNEXURE 1 PART 9 TECHNOLOGY RE-ASSESMENT PART 10 DIRECTIONAL CHANGE 2 ECOTHRUST

CONTENTS IN PART 3 A TRANSPARENCY : UNDERSTANDING THE BASE MODEL Emissions as per KYOTO pact Carbon Trading mechanism MRV and Transparency of Emissions Excerpt of the Danish Text on MRV & Transparency for poor nations Excerpt of the OBAMA BASIC Deal on MRV & Transparency Transparency MRV & Transparency for Emission Control : Robust and effective Use of EU ETS as BASE MODEL and U.K as BASE NATION What the EU-ETS covers What the EU-ETS does not cover C02 Emissions monitored and mitigated under the EU ETS 2 in E.U. Emission mitigation in U.K as per EU ETS 2 References of previous works on COP15 3 ECOTHRUST

Emissions as per KYOTO pact Twelve years ago in 1997 the Kyoto Deal at the 3rd COP conference was enacted under pressure from environmentalists by economists and scientists who obviously did not understand too much of how to control emissions or even measure it. The flaws of the Kyoto pact have been already discussed in detail in our extremely popular presentations at Slide Share during October 2009 COP15 : Gassing 15 Years on Carbon Economy http://bit.ly/4kzzIz . One of the primary reasons why the U.S. has not signed the treaty is because the administration and the U.S. Congress was not sure of its outcome. The oil and coal lobbies within the U.S. who had initially pushed forward the mechanics of Cap and Trade, the principal mode of mitigation and curbing emissions in the Kyoto pact had designed it as a profitable venture for the industry. It made the energy user pay for the costs of emission reduction including the state and the regulator to act as a buffer to ensure the process. The profits from the carbon trade would according to them more than compensate the cost of emission control and by involving the Wall street they could get support of high finance and liquidity . Carbon Trading mechanism A flexible global carbon trading concept was designed so that they could buy cheap credits from poorer nations to mitigate additional emissions created in the rich nations. In short a 1000 tree plantations in the Congo Basin should pay for a few million tones of C02 emissions added in Pennsylvania. Under this mitigation pact the emission allowances would be issued based on the actual emissions initially generated by the industries. These units of Carbon credits would be issued free initially . Additional units could be bought or sold based on the emission credits needed at the plant above or below the stipulated norms. Hence it would be profitable to reduce emissions and expensive to emit more if the measurement, verification and trading system was transparent and the reporting was honest , considering that the carbon prices would be high enough. MRV and Transparency of Emissions The inherent problem with emission monitoring and control is that they cannot be stored. It is a transient phenomenon that has to be recorded at that point of time and leaves no evidence behind in most cases. Auditing is possible but never foolproof as the fuel firing mix of fossil fired plants can be changed from minute to minute to cause emissions to rise or drop. And fossil fired fuels in the energy and transport industry account for more than three quarter of the global emissions. 4 ECOTHRUST Excerpt of the Danish Text on MRV & Transparency for poor nations

“ In order to promote transparency and accountability the developing country Parties will report on inspection of their individual mitigation actions and emission outcomes achieved in relation to their estimates in attachment B The supported mitigation actions and the related reductions are subject to robust MRV.MRV of supported actions must verify that financing as well as action is delivering towards full commitments. Implementation of developing country mitigation action that are not externally supported will be subject to national MRV based on internationally agreed guidelines and a consultative mechanism under UNFCCC “ Excerpt of the OBAMA BASIC ACCORD on MRV and Transparency . “Mitigation actions taken by Non-Annex I Parties will be subject to their domestic measurement, reporting and verification the result of which will be reported through their national communications every two years. Non-Annex I Parties will communicate information on the implementation of their actions through National Communications, with provisions for international consultations and analysis under clearly defined guidelines that will ensure that national sovereignty is respected. Nationally appropriate mitigation actions seeking international support will be recorded in a registry along with relevant technology, finance and capacity building support. Those actions supported will be added to the list in appendix II. These supported nationally appropriate mitigation actions will be subject to international measurement, reporting and verification in accordance with guidelines adopted by Conference of the Parties” Transparency The emphasis on transparency, therefore becomes crucial in any such system, the reason why the EU and the U.S. are so keen on China, India and the G77 accepting the required verification clauses that will ensure that all countries are transparent in their dealings on emissions. Whereas there is no doubt that setting up transparent systems in the developing world to counter climate change are required, let us examine in detail where Asia must follow the EU model and where it must move away only to save the wasteful expenditure that the Western economies incur so often on hypothetical goals. This is important as there are at times when expensive and redundant methods employed, usually added to enhance value addition of associates and advisors who help develop such systems. For unless the mechanism to counter climate change is cost effective, solutions will not work in the developing world despite agreements at international levels. 5 ECOTHRUST MRV and Transparency for Emission Control: Robust and effective

This is a very critical and highly technical aspect of climate talks that cannot be ignored if climate change has to be stopped or even pushed back. Unfortunately politics amongst nations have put technological issues on the back burner, as a result of which less than desirable results have been achieved in emission control and people have stopped trusting the international emission pacts. As this is the turning point in the history of climate talks where key parameters and approaches are again being re-visited as per the OBAMA BASIC deal, we examine this aspect in detail. In part 3a of this series we therefore take a look first at what is the adopted robust and transparent MRV model used today by the developed nations In part 3b of the series we shall see what is their overall transparency and their effectiveness to control emissions and what is the cost of such mechanism to the national economies of developed countries. In part 3c of the series we shall discuss a transparent adaptation model for developing economies in view of the lessons from the current practices Use of EU ETS as BASE MODEL and U.K as BASE NATION With the US refusing to ratify Kyoto pact, the European Union have been the first movers. They have started to implement the provisions of Kyoto pact since the year 2005. Immediately after Kyoto pact the EU started devising the mechanism of mitigation and control now popularly known as the EU ETS (Emission Trading System) which was done in the 6 year period 1997-2003. The first legislation called the EU-ETS 1 had several drawbacks and has been revised to make way for EU-ETS 2 which is currently applicable. From the year 2013 this again will be replaced by EU-ETS 3 which is nearly ready and will incorporate some lessons learned from EU ETS 2 . Since EU-ETS 2 is currently in operation we will examine the same and see what guidelines and insights, drawbacks and pitfalls it offers to Asia and Africa on the issue of Transparency, and how a model country wise code can be developed for use after studying and analysis of the current EU ETS. The Kyoto pact calls for independent Nation wise Action Plans NAP for mitigation and reduction of GHG. It is not possible or practical to have one solution for all nations due to variations in usage, industries, demography, and political set-up. Here we will be use the feedbacks from 1 nation, the U.K. considered as an early implementer of the EU ETS. Hence let us first study what the U.K. framework is for implementing the EU-ETS 2 architecture 6 ECOTHRUST

What the EU-ETS covers The European Union Emissions Trading Scheme (EU ETS) was the first international and fully operative trading system for mitigation of Carbon dioxide (CO2) emissions in the world. As per the 1997 Kyoto pact, the then 15 member EU and the 12 East European nations subsequently merged in the EU accepted targets for reducing six (6) Greenhouse Gas emissions by 5 % within 2020 . It covered aprox10,000 energy intensive facilities across the 27 EU Member countries; entities that emit around 43 % of the EU’s overall emissions. http://www.decc.gov.uk/en/content/cms/what_we_do/change_energy/tackling_ clima/emissions/eu_ets/phase_II/phase_II.aspx This included medium and large industrial units like oil refineries, power plants over 20 megawatts (MW) in capacity, coke ovens, and iron and steel plants, along with cement, glass, lime, brick, ceramics, and pulp and paper installations etc. What the EU-ETS does not cover The trading program covers neither CO2 emissions from the transportation sector, which account for about 25% of the EU’s total greenhouse gas emissions, nor emissions of non-CO2 greenhouse gases largely due to technological limitations of computation of emissions from these sources. The six main anthropogenic greenhouse gases GHG considered under Kyoto are Carbon Di- oxide (CO2), methane (CH4), Nitrous Oxide N2O), besides fluorocarbons like per fluorocarbons (PFCs), hydro fluorocarbons (HFCs), and sulphur hexafluoride (SF6), Of the six GHG gasses in consideration only C02 measuring and reporting mechanism is somewhat ready for world wide implementation having gone through the trial and test period within EU during the last four to six years , while others are still in various stages of development . It is important to understand why the EU ETS 2 does not cover the small plants below 20 MW in the Energy industry or equivalent emitting industries in the Steel, Petroleum, Cement or any other industrial sector. It is because compliance in the small industry sector are inherently difficult as they are not only financially weaker units unable to go green but are extremely numerous. 7 ECOTHRUST

Similarly the measurement of other Green house Gasses is extremely difficult, being in small quantities as compared to Carbon Di-Oxide which accounts for around 80 % of overall the emissions. As a matter of fact the effectiveness of measuring and monitoring carbon or the numerous gasses (over 600,000 ) that create toxicity in the atmosphere is elaborated in the presentation here http://bit.ly/4kzzIz with details on how Fluorocarbons are constantly evolving.. C02 Emissions monitored and mitigated under the EU ETS 2 in E.U. 12% C02 Emissions under EU ETS Scheme 43% C02 Emissions in 20% Transport sector GHG Emissions Other Emissions 25% 8 ECOTHRUST EU comprising of the developed nations of the rich western economies as well as the industrial powerhouses of East Europe that shrunk during the Soviet

block meltdown have large units. This is much unlike China or India, Brazil, Mexico or Africa which have more numerous tiny units strewn all over the land with very little financial muscle or infrastructure support. Thus to issue a directive of compliance for MRV and to ensure its transparency in the developing world more difficult unless the exact mechanism is known. Emission mitigation in the U.K as per EU ETS 2 Under the EU – ETS 2 Scheme for carbon credits, the first auctions in U.K. held in November 2008 yielded only GBP 54 million with a mere 4 million allowances sold at a unit price of 13.6 GBP per unit. In effect 7 % of the total C02 emission allowances were auctioned and 93 % were distributed as free allowances as per Telegraph report http://tinyurl.com/62pyw9 This means that effectively 3% of the emissions of U.K. were mitigated by the EU-ETS scheme almost 12 years after Kyoto pact. Carbon prices have dropped since and today those who saved their Carbon Credits under the EU ETS 1 are unable to use the same for EU ETS 2 Scheme.This has further eroded the user confidence of using Carbon credits as a long term investment proposition. However we will go into the detailed analysis of the benefits and pitfalls of the EU ETS Scheme later in Part 3b of this document. Here we are simply demonstrating the current standing and effectiveness of the EU ETS2 scheme in mitigation by ensuring a robust measurement, reporting and verifying of C02 to control GHG emissions C02 Emissions under free permits in EU ETS 12% Scheme C02 Emissions under auction in EU ETS 40% Scheme 20% C02 Emissions in Transport sector GHG Emissions 3% 25% Other Emissions 9 ECOTHRUST

References of previous works on COP15 Why COP15 Danish Accord Failed. http://bit.ly/5TNFhd DISTRUST Part 1 (Slide Share ) Why COP15 Danish Accord Failed. http://bit.ly/80E0jV DISTRUST Part 1 (Scribd) Why COP15 Danish Accord Failed http://bit.ly/6dtoYm EQUITY Part 2 (Scribd) Why COP15 Danish Accord Failed http://bit.ly/5DsBKg EQUITY Part 2 (Slide Share) COP 15 : Deal Sabotage : Burying Kyoto at Copenhagen http://bit.ly/XUrUd ( Slide Share) COP 15 : Gassing 15 years on Carbon Economy http://bit.ly/4kzzIz ( Slide Share ) COP 15 : Bullshitting 15 yrs on Climate change http://tinyurl.com/luzxss (Slide Share) The Imelda story of Cap & Feed. Why the planet earth suffers http://bit.ly/79wmG4 (You tube) Cap & Trade Energy Mathematics http://bit.ly/55yAsZ (You tube video) The Imelda Story http://bit.ly/5pPfBT ( Scribd) Cap & Trade energy maths at Scribd http://bit.ly/5sIs82 ( Scribd) For any Queries, Objections or Source confirmation of data please contact the author Sandip Sen at sen.sandip@gmail.com 10 ECOTHRUST

Cop15 Failure Analysis PART 3a Transparency, Base Model

by Sandip Sen on Jan 12, 2010

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Cop15 Failure Analysis PART 3a Transparency, Base Model — Document Transcript

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