Some United Nations-overseen regulators of the world’s second-biggest carbon market need to resolve conflicts of interest as they debate on the supply of emission credits from industrial-gas projects next week.

The Clean Development Mechanism executive board, which oversees the market, is deciding how to regulate projects that destroy hydrofluorocarbon-23, the potent greenhouse gas that is a byproduct of chemical-refrigerant making. Greenhouse gas credits from HFC-23 projects make up about half the supply of offsets in the UN program, which can be used for compliance in the European Union market, the world’s biggest.

Three of the 10-member board and three of the 10 alternates who stand in for them when absent should abstain from votes on HFC-23 because of the conflicts, CDM Watch, the Bonn-based environmental lobby group, said July 16. They include representatives of China, India, Netherlands, U.K., Japan and Norway, the lobby group said in an e-mailed statement. That’s because some of those nations buy the credits and some sell.

Lex de Jonge, chairman of the UN panel that approves methodologies to cut greenhouse gases and an alternate member, said he won’t defend projects that apply for credits by destroying the HFC-23 gases. “I’m very much aware of the conflict of interest,” de Jonge said July 16 by phone, referring to the fact that his country, the Netherlands, buys the credits to help comply with its targets under the 1997 Kyoto Protocol.

“I will not in any way enter into discussions defending these projects,” he said. De Jonge said he and other regulators have abstained from past decisions when conflicted. “That’s the only way to survive in this system.” The executive board is meeting July 26 through 30 in Bonn, Germany.

‘Can Speak’

Conflicted board members that won’t defend credits may still participate in discussions, de Jonge said. “It doesn’t mean they can’t speak.”

Last year, the board adopted a code of conduct that addressed conflict of interest, David Abbass, a spokesman for the UN Framework Convention on Climate Change, said July 16. “Each board member, when they join, signs an oath that addresses conflict of interest,” he said by e-mail.

China has 11 HFC-23 CDM projects producing about 65 million metric tons of Certified Emission Reduction credits a year, CDM Watch said. That’s the most of any nation and adds up to about 650 million euros ($842 million) annually, it said. (By Mathew Carr)

Source: Bloomberg

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UN climate talks have resumed in Bonn to prepare for a December summit in Mexico. Officials say a legally-binding agreement will be impossible, but Mexico's negotiator accuses them of lowering expectations.

UN climate negotiators from 185 nations are in Bonn grappling line-by-line with a 42-page rough draft of a framework agreement for a new climate pact to replace the Kyoto Protocol. The current climate talks last until June 11 and are intended as a preparation for the upcoming United Nations climate summit in Cancun, Mexico, in December.

Expectations of a big agreement are not high after the failure of the Copenhagen summit six months ago.

Yvo de Boer, chief of the UN Framework Convention on Climate Change (UNFCCC), admits that any treaty is unlikely to be completed before the end of 2011. De Boer tendered his resignation after last December's Copenhagen climate change talks, which ended in widespread disappointment and frustration with only vague promises to cut CO2 emissions.

Leaders from 194 countries were supposed to finalize a legally binding post-2012 treaty to replace the Kyoto Protocol. All they came up with was a commitment to reduce greenhouse gases that cause global warming and a pledge to assist developing countries combat climate change.

But Mexican negotiator Luis Alfonso de Alba contradicted de Boer Wednesday in telling Reuters he believes a climate deal is possible.

"Mexico does not want to raise false expectations but we certainly are ambitious," he said. "The U.N. secretariat, Yvo de Boer and some other actors, the European Commission, Connie Hedegaard, have frequently referred to the impossibility of reaching a legally binding agreement in Cancun, (and) do not imply that important decisions can be taken in Cancun. We do not share that view. They are somehow lowering expectations for Cancun."

Nations divided into camps

Points of contention include whether to refer to the Copenhagen accord, how steep emissions cuts should be, and how to distribute cuts between rich and poor states. Speaking at a news conference in Bonn de Boer told journalists reaching a legally binding agreement in Cancun is "extremely unlikely."

"I think that especially developing countries would want to see what an agreement would entail for them before they would be willing to turn it into a legally-binding treaty," he said.

In fact, developing countries have raised new demands and pressed developed countries to take greater responsibility for climate change. China and the G77 say the new text needs to emphasize more emissions cuts to be made by developed countries.

African countries want a "binding, inclusive, effective" deal made in Cancun which does not replace the Kyoto Protocol. Small island states reject references to the year 2011 in the new text and say the emissions cuts pledged so far are not enough and constitute a "death sentence" for many island states.

A group including the United States, Japan, Russia, Canada, Australia, Ukraine, New Zealand, Kazakhstan and Iceland says the new text "misses key elements." The group wants a "long-term framework" beyond 2010, climate aid and the saving of forests.

Bolivia wants the text to include a target for levels of greenhouse gases in the atmosphere and that it specify a percentage of national budgets be allocated for climate action. The country suggested 6 percent of GDP, in line with defense budgets.

The European Union said the new text should refer to the Copenhagen accord and should include emissions reduction targets for individual countries. Tuvalu said rejected that any reference to the Copenhagen accord or wording from the accord should be included in the new text.

Moving on from Copenhagen

Last month UN Secretary-General Ban Ki-moon named Costa Rica's Christiana Figueres to replace de Boer. Analysts expect her to shift the emphasis from legally binding emission cuts to developing green technologies.

The 12-day Bonn meeting will attempt to unravel some of the decisions made at the failed Copenhagen talks. The so-called Copenhagen Accord sets a voluntary goal of limiting warming to two degrees Celsius (3.6 degrees Fahrenheit). It was brokered by a couple of dozen leaders in the summit's final desperate hours.

To show that the accord has credibility - and restore trust in the overall process - developing countries are now calling on industrialized countries to honor their pledges of financial support.

Debt crisis

Under the Copenhagen Accord, the European Union, the United States, Japan and other wealthy countries pledged $30 billion (24.3 billion euros) in aid from 2010-2012, with a promise of contributing 100 billion dollars a year by the end of the decade.

Faced with the ongoing debt crisis in the eurozone, the EU appears to be backpedaling on its initial goal of unilaterally cutting CO2 emissions by 30 percent by 2020 against 1990 levels to "kick-start" climate action in developing countries.

EU Commissioner for Climate Change Connie Hedegaard said last week that conditions for a 30-percent move "are clearly not met." The EU had previously proposed increasing their target to 30 percent from 20 percent if other countries followed suit as part of a new climate deal. A study presented by the EU commissioner estimated that this would cost EU countries 81 billion euros.

"Of course, it's not an easy time to discuss money that comes out of the public purse right now," said Hedegaard.

France and Germany - the EU's two largest economies - have warned member countries to tread carefully on the issue.

gps/nrt/AFP/Reuters/dpa

Source: Deutsche Welle

(Reuters) - The Gulf of Mexico oil spill has seriously eroded chances for the Senate to pass a climate change bill this year, Senator Lindsey Graham said on Monday, as he also leveled new criticisms against the legislation he helped to write.

Graham, a Republican seen as the key to bringing along more Republican votes in the uphill fight to pass a bill in the Senate, spent about six months working with Democratic Senator John Kerry and independent Senator Joseph Lieberman on the nearly 1,000-page bill to battle global warming and increase domestic energy production.

Graham dropped out of the trio shortly before the controversial legislation was unveiled on May 12 -- first complaining that Democrats were pulling an election-year stunt by shifting to immigration reform instead of energy policy and then saying that the Gulf of Mexico oil disaster required a pause in the drive for a climate bill.

In a short interview with Reuters, Graham complained that provisions to expand offshore oil drilling were "greatly compromised" in the legislation Kerry and Lieberman presented, compared with the trio's original plan, and "I couldn't support them as is."

When the draft bill was unveiled, Kerry, a Democrat, predicted that he could win back the support of Graham.

The April 20 explosion of a deepwater oil rig off the coast of Louisiana and the spewing of crude oil that has gone unabated since then caused Kerry and Lieberman to add in more offshore oil drilling safeguards into their legislation, including protections for Florida.

UNCERTAINTY

In objecting to the new bill, Graham complained that it now restricts "eastern Gulf (oil) exploration in a way different than our original proposal."

Overall, the Kerry-Lieberman bill would require U.S. industries and utilities to cut their output of carbon dioxide pollution, which many scientists blame for global warming.

In a move to attract Republican votes in the deeply divided Senate, the two senators also included incentives for expanding nuclear generating capacity, oil and gas drilling and research on how to cut pollution at coal-burning utilities and factories.

Asked how long the Senate should suspend action on a climate bill, Graham said: "I think it gets longer simply because of the unknown nature of the oil spill."

He acknowledged the difficulties in winning support for more offshore oil drilling because of the massive oil spill, adding that "Democratic senators who would be opposed to expanding oil drilling have gotten firmer in their resistance and you've got to make those votes up."

But the South Carolina senator said "fossil fuels extraction" must be part of a climate bill and, "You'll never get my vote" with the current oil drilling language.

Daniel Weiss of the Center for American Progress, which supports climate change legislation, echoed Graham's assessment of the political problems the bill is up against. "The oil spill has frozen members. The last thing politicians like is uncertainty and this creates a great deal of uncertainty."

President Barack Obama has said the climate change/energy legislation is a high priority of his administration. But he has not yet put his full weight behind passing a bill, as he did with measures to reform U.S. healthcare and banking industries.

Obama is scheduled to meet with Senate Republicans at a closed-door lunch on Tuesday to discuss bipartisan cooperation on upcoming legislation.

One Senate Democratic aide said he thought immigration and energy measures would be discussed, but some Republican aides doubted there would be any breakthroughs at the meeting. (By Richard Cowan; Editing by Sandra Maler)

Source: UK Reuters

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It is ''inevitable'' Australia would put a price on its carbon dioxide emissions, the shadow treasurer, Joe Hockey, said amid mixed messages from the Coalition about its approach to climate change.

Mr Hockey would almost certainly have become Liberal leader last November had he renounced his belief that a market mechanism was the best way to reduce carbon emissions.

After Tony Abbott won the leadership, the Coalition introduced a ''direct action'' climate plan, which uses government grants and subsidies to reduce emissions by 5 per cent by 2020 but puts no price on carbon or penalty on polluters.

Mr Abbott has said he would review the policy in 2015, leaving open the possibility he could support a carbon price if other countries did so by that time.

But clearly he was implying this was highly unlikely.

''I am saying that our proposal is a much better way forward than Mr Rudd's great big new tax,'' he said in February. ''I've said many times before that if the whole world changes, we'll change with them, but the world ain't going to change any time fast.''

Mr Hockey has reconciled his views with the new Coalition policy by pointing to debates in many other countries about the most efficient way of pricing carbon and the failure of the Copenhagen meeting to reach a legally binding agreement. He said that until a global market was meaningful and liquid there was no point in Australia proceeding with a cap and trade emissions scheme on its own.

And yesterday he repeated the Coalition's refrain that since the backflip by the Prime Minister, Kevin Rudd, who delayed his emissions trading scheme until 2013 at the earliest, the Coalition stood as the only major party with a clear policy to combat global warming.

But asked by the Herald about his statement that investors in the Australian energy market needed clear market signals, Mr Hockey said that ''inevitably we'll have a price on carbon … we'll have to.''

The 46-page values document he released yesterday took a more sceptical stance.

''Climate change is a special challenge,'' it said. ''There is some debate as to whether the planet is warming; if it is warming, whether human activity is contributing to that process; if the first two points are true, whether there are negative consequences.

''The majority view of scientists around the globe is that all three points are true.''

The former Coalition leader Malcolm Turnbull has also started to reconcile his views with the Abbott policy he once described as ''bullshit'', saying that while the Coalition's ''direct-action plan'' was inferior, it was superior to the Rudd climate-change ''policy vacuum''. (BY LENORE TAYLOR)

Source: The Sydney Morning Herald

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