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The Climate Post: Record-Breaking Greenhouse Gas Emissions, but Carbon Market Failing

Posted: 06/03/11 06:37 PM ET

Greenhouse gas emissions dropped in 2009 in the wake of the Great Recession. Research now shows emissions rebounded quickly in 2010, setting a new all-time record. In a press release, the International Energy Agency (IEA) said the prospect of limiting the global increase in temperature to no more than 2ºC is getting bleaker. Commenting on the new data, economist Nicholas Stern said emissions are "now close to being back on a 'business as usual' path."

Nonetheless, Christiana Figueres, executive secretary of the United Nations Framework Convention on Climate Change, called for an even stricter goal in a speech at an emissions trading conference. "Two degrees is not enough -- we should be thinking of 1.5 ºC," she said.

Canada's emissions likewise fell in 2009, as described in the government's emissions report to the United Nations. However, they deliberately omitted details on tar sands operations' emissions, which showed a 20 percent rise in pollution in 2009.

Despite record emissions, international carbon trading shrank for the first time since the program began in 2005, from $143.7 billion to $141.9 billion. The portion for the Clean Development Mechanism, aimed at helping developing countries put low-emission options in place, fell by nearly half, in large part because of uncertainties about the successor to the Kyoto Protocol. Because of this drop, Andrew Steer, the World Bank's Special Envoy for Climate Change, told the Guardian, "The [carbon] market is failing us."

Germany, Others Flee Nuclear

Germany had planned to expand its nuclear program, until Japan's Fukushima disaster led to fresh debates over nuclear power. Now the government has announced it will close all the country's nuclear power plants by 2022. The country had already shut down seven of its oldest nuclear plants in March, and those will remain off.

Germany's largest utility, E.ON, is upset about the policy reversal and plans to sue the government for damages. E.ON and other big operators are facing big losses, not just because of the policy change but also because "customers are fleeing in droves" to companies that offer nuclear- and coal-free electricity.

Grid operators had already warned that Germany may suffer blackouts this summer if these nuclear plants were to remain off, and other European countries may likewise face blackouts due to a spring drought that has left river and reservoir levels low.

To make up for lost electricity from nuclear plants, Germany may turn to higher-emission sources like coal in the short run, boosting its carbon dioxide emissions by about 40 million metric tons, or around 5 percent. The move is a "shot in Russia's arm," said Steve LeVine of Foreign Policy, since it will make Germany even more reliant on natural gas from Russia, holder of the world's largest proven reserves. Already Germany has become more reliant on heavily-nuclear France, becoming a net importer of electricity from them.

In the longer term, the government is raising its targets for renewable energy, aiming to double its share, from 17 percent today to 35 percent by 2020. In 1997, Germany set a target of achieving 14 percent renewables by 2010, but met the target early, in 2007. Integrating a large share of renewables is easier than thought before, according to a new analysis by the IEA.

Switzerland also decided to phase out nuclear power, albeit on a slower schedule--by 2034. Nuclear power supplies 40 percent of the country's electricity, making it one of the world's most nuclear-reliant countries.

Plea for Oil

Meanwhile, oil prices have remained high, with Brent crude remaining above $110 a barrel, leading the International Energy Agency in mid-May to make a rare formal plea to the world's oil producers to raise their production, because continued high prices could hurt economic growth.

Saudi Prince Al-Waleed bin Talal agreed oil prices are too high, saying he would like them to be around $70 to $80 a barrel. "We don't want the West to go and find alternatives, because, clearly, the higher the price of oil goes, the more they have incentives to go and find alternatives," Talal told CNN.

But more than a dozen experts surveyed by Reuters said members of the Organization of the Petroleum Exporting Countries (OPEC) are unlikely to raise production quotas at their upcoming meeting.

In part this is because there's disarray over who will even attend the meeting. Iran's president Mahmoud Ahmadinejad sacked the country's oil minister and announced he would take on the job himself, and planned to represent Iran at the OPEC meeting. But a few days later this was reversed, after the country's Guardian Council said Ahmadinejad wasn't allowed to take on the oil minister job.

Who might represent Libya has also been up in the air, after Shokri Ghanem, head of the national oil company, was reported to have defected from Muammar Gaddafi's government. He showed up recently in Italy, announcing at a press conference that he had in fact defected, but is undecided about working with the rebels.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University's Nicholas Institute for Environmental Policy Solutions.