Two weeks of negotiations in Madrid last December were not enough to reach an agreement on how the world should cooperate on cutting emissions. Representatives of more than 190 countries failed to reach a deal on guidelines for global emissions trading that sets the process back by a full year.

The collapse of the talks centered around two or three highly technical rules. The first, over accounting for emissions reductions, pitted Brazil against numerous other nations. Brazil didn’t want to have to subtract emissions reductions from its own national account if they were traded to other countries: the others were adamant that you can’t have double-counting of emissions reductions.

The second saw Australia seeking to carry over a significant surplus of emissions units from the Kyoto Protocol, the predecessor to the 2015 Paris Agreement, to use under the new deal. Allowing Australia to do this would have meant the country would already be half-way to its Paris target without having done anything yet.

And the third set Brazil, India and to a lesser extent China against a group of nations. The three largest developing economies want to transfer thousands of clean energy projects and the emissions credits that they’ve produced from the Kyoto Protocol to the Paris Agreement; they stand to earn billions from emerging carbon markets around the world, including the International Civil Aviation Organisation’s new system.

Critics said that these carbon offsets, while worthy, would simply reduce the amount of work needed to slash emissions and keep global temperatures less than 1.5 degrees above pre-industrial levels. A group of around 30 nations issued a pledge not to buy these credits during the second half of the negotiation session, ramping up the tension and eventually leading to the breakdown in the talks.

The Madrid summit wasn’t the first attempt to craft a set of rules for international emissions markets. Countries had already tried and failed in Poland in 2018 when these same three issues prevented a deal. The talks will resume in Glasgow, Scotland in November 2020.

Even after two additional days of talks, the negotiations ground to a halt without success. But numerous commentators and carbon market advocates were not as downhearted as expected.

Enough work has been done to agree to basic rules on reporting, on transparency and on verification for like-minded countries to go ahead and set up markets, and link them together, these market boosters said.

And that’s already happening. On January 1 Switzerland formally linked its domestic carbon market to the EU’s much larger system: the process has been going on for a number of years already, and Swiss carbon prices have been rising sharply to come into line with the current €25.00 price in the EU.

Talks are continuing amongst a group of Latin American countries to develop their national carbon tax regimes into a regional carbon market. China is about to replace nine pilot markets with a single, national emissions trading system that will dwarf anything we’ve seen so far.

Even African countries are getting into the carbon market mood. To be sure, many of them would prefer the security of a UN-sanctioned set of rules, but they see enough progress being made at a national level to be very interested in building their own systems.

The Kyoto Protocol was a “top-down” system, where the UN made the rules and everyone had to follow them. But the Paris Agreement is a voluntary, “bottom-up” arrangement, where countries actively decide to participate. Their commitment is stronger as a result.

And with nations taking the lead, the UN is going to have to play catch-up from now on.

Ever since the Babylonians began to predict weather from cloud patterns and astrology, humans have tried to build a solid method to predict short-term, and increasingly of late, longer-term weather patterns.

The science of weather forecasting dates back to the careers of Francis Beaufort, an Irish hydrographer who served as Britain’s Hydrographer of the Navy in the mid-19th century, and his contemporary Robert FitzRoy, chief of weather data at the country’s Board of Trade.

Their scientific rigor and interest in all the earth sciences led them to be called the fathers of modern meteorology, though by the early 20th century advances in atmospheric physics enabled greater accuracy. By 1955 computers were able to produce practical forecasts.

Historically, there has always been a relevant role in weather forecasting in our energy industry. Temperature changes signal increases or drops in heating or cooling demand, as businesses and consumers turn to air conditioners or space heaters.

Similarly, rainfall forecasts are critical in managing hydropower generation assets: by building up databases of historical rainfall patterns and combining them with current weather forecasts, asset managers are able to determine how to optimize their generation.

The first fossil-fuel-fired power plant (Thomas Edison’s plant in London) and the first hydro dam (Fox River, Wisconsin) both began operating in the same year of 1882. Obviously, these pioneers did not enjoy the benefit of accurate weather forecasts and so “brown-outs” were a common phenomenon when demand overwhelmed the available supply.

The advent of scientific weather forecasting made it possible to manage supply to meet fluctuations in demand when weather conditions change. But it’s really in the last 30 years that technological advances have made possible new areas of weather forecasting. With the rise of solar and wind generation has emerged a demand for predictions of how much sunshine and how much wind are to come over different periods into the future.

Typical weather data now available includes forecasts for minimum and maximum temperatures, wind speed and direction, rainfall and “net radiation” (sunlight), all of which carry great relevance for the energy sector.

As an example, the European Centre for Medium-Range Weather Forecasts (ECMWF) and the Swedish Meteorological and Hydrological Institute (SMHI) provide forecasts for wind and solar power generation by the country for the next 12, 24 and 36 hours, and compares its forecasts with observed generation.

Weather forecasts act as a sort of risk management tool for renewable asset managers by helping to reduce uncertainty over the availability of primary energy sources (wind, sun, and rain). By careful analysis of forecasts, plant operators can decide how much energy they might have available to sell over a set period, enabling them to make the best use of assets.

It’s even possible to take risk management one step further now and buy or sell weather derivatives as a hedge against the loss of generation. A typical weather derivative is based on a specific index that can measure any aspect of the weather, be it rainfall, wind or hours of sunshine.

The upsurge in demand for accurate weather data – both forecasts and historical data – has led to a proliferation in the supply of market-relevant, actionable information from a huge variety of sources. Whereas in years past market participants may have relied on established, often state-owned providers, the last 20 years have seen numerous organizations enter the field.

This offers utility operators a vast choice of data to choose from, to compare and even to integrate into their operations. Combined with other risk management tools, it means that the new range of (interruptible) renewable power generation assets can now integrate seamlessly with legacy plants to offer the security of supply on a scale nobody could have expected 30 years ago.

Oil refiners may soon find themselves the target of an effort to cut greenhouse gas emissions in the northeast US using a cap-and-trade program.

A number of northeast US states are revving up to create a cap-and-trade program to cut CO2 emissions from cars and trucks.

This effort could end up creating the largest carbon market in the US and serve as a landmark regional effort to address climate change.

Work on the program is still in its early stages, but it could end up making the states’ refiners and fuel suppliers responsible for the CO2 emissions from gasoline and diesel used by drivers in the region.

Nine northeast states and the District of Columbia say they plan to use cap and trade to address CO2 emissions from transportation: the largest source of emissions in the region. They are working through a broader 12-state coalition known as the Transportation and Climate Initiative.

Under the hood, a cap-and-trade program is fairly straightforward. The states collectively set a limit (cap) on the total amount of CO2 emissions they will allow each year, which gets stricter over time, and they distribute allowances that represent those emissions. To provide some flexibility, the states allow companies covered by the cap to trade the allowances among one another. This allows supply and demand to set the price of CO2 and ensures that companies that cut emissions quickly can benefit financially by selling their extra allowances to those that need them.

For many of the states, this is not their first time working with cap-and-trade. Many are already members of the Regional Greenhouse Gas Initiative (RGGI), a decade-old program that limits CO2 from the electricity sector. California has its own cap-and-trade program, which covers transportation and electricity, and could provide a model for the northeast market. And much of Europe is covered by the largest cap-and-trade program for greenhouse gases in the world.

The emerging transportation program would dwarf the size of the RGGI program and could rival the scale of California’s economy-wide market.

Once the states put out their proposal later this year, each will need to decide individually whether to adopt the final plan and get the market underway. They also want to make sure the program that can accommodate new members in the future, as a larger market would reduce overall costs and lead to greater CO2 reductions.

The transportation program is in the slow lane at the moment and it will likely be about three years until trading could actually begin. But once it shifts into high gear, the states will have more than half of their total emissions covered by a cap-and-trade market and could be racing toward a lower-carbon future.

Written by: Sam Brock, Reporter on Sep 12, 2019 at Argus

Original source and weblink is here: https://www.argusmedia.com/en/blog/2019/august/22/vehicles-to-be-the-major-vehicles-for-co-2reduction?utm_source=ZEPower&utm_medium=referral&utm_content=blog&utm_term=emi&utm_campaign=AMER-EMD-2019-09-EMI-Air%20Daily%20Content%20Series%202019