Copyright Environmental Resources Trust, Inc. (ERT), 2003.

Request to reproduce all or part of this material should be made to ERT.

Harnessing the power of Harnessing the power of marketsmarkets . . . to protect and improve the . . . to protect and improve the environmentenvironment..

Wiley BarbourWiley BarbourEnvironmental Resources Trust, Inc.Environmental Resources Trust, Inc.

April 2004April 2004

History and Transitions of History and Transitions of Global Warming Programs Global Warming Programs

and Policiesand Policies

Early History of Global Warming Early History of Global Warming ScienceScience

• 18241824- - Jean Baptiste Joseph Fourier- Jean Baptiste Joseph Fourier- First described greenhouse effectFirst described greenhouse effect

• 18961896- - Svante Arrhenius-Svante Arrhenius- Burning coal emits CO2 which warms earthBurning coal emits CO2 which warms earth

• 19381938- - Guy Callendar-Guy Callendar- Man changing atmosphere, may lead to warmingMan changing atmosphere, may lead to warming

“As man is now changing the composition of the atmosphere at a rate which must be very exceptional on the geological time scale, it is natural to seek for the probable effects of such a change. From the best laboratory observations it appears that the principal result of increasing atmospheric carbon dioxide . . . would be a gradual increase in the mean temperature of the colder regions of the earth.”—G. S. Callendar (1939), British Steam Engineer

.

Indicators of the Human Influenceon the Atmosphere during the Industrial Era

a) Different symbols denote ice core data for several sites in Antarctica and Greenland

b) Lines indicate sulphate concentrations in ice cores in Greenland. Pluses denote the regional estimated SO2 emissions.

Source: IPCC WG I (Science) Summary for Policy-Makers, Third Assessment Report, 2001.

1950s - 1960s – 1970s1950s - 1960s – 1970s

• Early 1950s- Global warming theories get Early 1950s- Global warming theories get revived attentionrevived attention

• 1958- Keeling begins monitoring of CO2 1958- Keeling begins monitoring of CO2 in atmosphere at Mauna Loa, Hawaii and in atmosphere at Mauna Loa, Hawaii and the South Pole.the South Pole.

• Early 70s- Four major climate modeling Early 70s- Four major climate modeling centers establishedcenters established

• 1979- World Climate Conference1979- World Climate Conference

1980s 1980s • 1987- Montreal Protocol established timeline 1987- Montreal Protocol established timeline

for phase-out of CFCs for phase-out of CFCs – Successful linkage between science and policy Successful linkage between science and policy

communitiescommunities– Many of the key players turned their attention Many of the key players turned their attention

next to global climate changenext to global climate change

1989- Intergovernmental Panel on Climate 1989- Intergovernmental Panel on Climate Change (IPCC) launched to provide Change (IPCC) launched to provide assessment of scienceassessment of science

1992 “Earth Summit”1992 “Earth Summit”Rio de Janeiro, Brazil Rio de Janeiro, Brazil

• Framework Convention on Climate Change Framework Convention on Climate Change (FCCC) signed by 154 nations (FCCC) signed by 154 nations

• Came into effect March 21, 1994Came into effect March 21, 1994• Currently ratified by 155 nations including Currently ratified by 155 nations including

the United Statesthe United States• Goal: “avoid dangerous interference with Goal: “avoid dangerous interference with

the climate system”the climate system”• How to enforce?How to enforce?

Designing a Compliance Designing a Compliance FrameworkFramework

• Legally binding vs Non-bindingLegally binding vs Non-binding• All GHGs vs CO2 onlyAll GHGs vs CO2 only• Pledge-based vs Principal-basedPledge-based vs Principal-based• Type of coverage:Type of coverage:

– ProjectProject– SectorSector– NationalNational– regionalregional

Types of Commitments:Types of Commitments:

• International carbon TAXInternational carbon TAX• Internationally harmonized POLICIES AND Internationally harmonized POLICIES AND

MEASURESMEASURES• Fixed emission target: CAP ON EMISSIONS Fixed emission target: CAP ON EMISSIONS

(Kyoto) (Kyoto) • Dynamic emission target: LIMIT ON EMISSIONS Dynamic emission target: LIMIT ON EMISSIONS

relative to GDP growthrelative to GDP growth• Dual emission targets: “SAFE ZONE” between a Dual emission targets: “SAFE ZONE” between a

high and a low targethigh and a low target• Emission Target with COST CAP (safety valve)Emission Target with COST CAP (safety valve)

• The first meeting of the Conference The first meeting of the Conference of the Parties (COP-1) under the of the Parties (COP-1) under the UNFCCCUNFCCC

•Berlin Mandate – Quantified emission limitation and Quantified emission limitation and

reduction objectives within specified reduction objectives within specified time-framestime-frames

– ““Targets and Timetables”Targets and Timetables”

1995 COP-11995 COP-1Berlin, GermanyBerlin, Germany

1997 COP-31997 COP-3Kyoto, JapanKyoto, Japan

• Kyoto ProtocolKyoto Protocol• Caps emissions from developed countries and Caps emissions from developed countries and

economies in transition economies in transition • ““Annex I Parties” agreed to Annex I Parties” agreed to

– reduce their overall emissions of six greenhouse gases, reduce their overall emissions of six greenhouse gases, – by at least 5% below 1990 levels, by at least 5% below 1990 levels, – between 2008 and 2012 (the first commitment period), between 2008 and 2012 (the first commitment period), – specific targets varying from country to country. specific targets varying from country to country.

• Emissions trading of Allowances and Project Emissions trading of Allowances and Project ReductionsReductions

• Registries Required to Track ProgressRegistries Required to Track Progress

Recent US Climate PolicyRecent US Climate Policy

• Withdraw from international Withdraw from international negotiationsnegotiations

• Voluntary Programs and PartnershipsVoluntary Programs and Partnerships– PCA, Climate Leaders, Pew Center, CCXPCA, Climate Leaders, Pew Center, CCX

• California Climate Action RegistryCalifornia Climate Action Registry• Regional GHG InitiativeRegional GHG Initiative

– Mandatory Cap on CO2Mandatory Cap on CO2– Lead by NY and including NY, NJ and NE Lead by NY and including NY, NJ and NE

statesstates

Registry Purpose

Example 3rd party Audit

Type of reductions

Provider Promise

Likely regulatory acceptance

“Hall of good deeds”

1605 (b) None All types No promise Low

Baseline protection

State level registry efforts

May be required

Direct & indirect distinguished

Some will lobby on behalf of registrant

Medium

Market foundation

ERT GHG Registry

Required Direct with ownership only

Pedigree of tons adds value

High

Different registries for different Different registries for different purposespurposes

GHG Partnerships, Registries and GHG Partnerships, Registries and Trading PlatformsTrading Platforms

“ERs” for retirement

US

UK ETS

Compliance/MandatoryVoluntary

KP

JI

CDMET

PCF

ERUPT/CERUPT

DK ETS

DOE 1605(b)

Climate Leaders

CA Registry

Australia GHG Challenge

Canada VCR

ERT

EDF PCA

Climate Savers

OR Climate

Trust

Clean Air Canada

GERT

BPI

CCX RGGI

• Develop Comprehensive multi-year Climate Develop Comprehensive multi-year Climate Protection Action PlanProtection Action Plan

• Encourage GHG mitigation viaEncourage GHG mitigation via– Binding Cap on Emissions, or Voluntary Emission RegistryBinding Cap on Emissions, or Voluntary Emission Registry

• Projects that work in NC:Projects that work in NC:–Methane reductions from agricultural wastesMethane reductions from agricultural wastes–Methane reductions from confined animal feed operationsMethane reductions from confined animal feed operations–Carbon sequestration in forests and soilsCarbon sequestration in forests and soils–Renewable energy that displaces fossils fuelsRenewable energy that displaces fossils fuels

• Level the playing field for Renewables:Level the playing field for Renewables:–Strive toward new RPS standardsStrive toward new RPS standards–Use NOx set-aside as a solid first stepUse NOx set-aside as a solid first step

Recommendations for North Recommendations for North CarolinaCarolina

NC Greenpower will not stimulate NC Greenpower will not stimulate demand for renewables at current price demand for renewables at current price levelslevels

5 10 15 20 25 60 180

GeothermalGeothermal

BiomassBiomass

WindWind

C&I NC C&I NC GreenpowerGreenpower

SolarSolar

SmallSmallHydroHydro

LFGLFG

C&I “Sweet Spot”

($1–3)

($2-4)

($2-5)

($1-6)

($4-20)

$22.50

($60-180)

REC Price ($ per MWh)

Residential NC Residential NC GreenpowerGreenpower

$40

SoutheastSoutheastBiomassBiomass

($4-6)

Avg UtilityAvg UtilityGreenpowerGreenpower

$26

Will North Carolina Continue Will North Carolina Continue to Lead?to Lead?

Copyright Environmental Resources Trust, Inc. (ERT), 2003.

Request to reproduce all or part of this material should be made to ERT.

Wiley BarbourWiley BarbourEnvironmental Resources Trust, Inc.Environmental Resources Trust, Inc.

202-785-8577 x14202-785-8577 x14wbarbour@ert.net