While the European Union is pushing for updates of the Energy Charter Treaty (ECT) to make it more climate-friendly, Japan has resisted any changes.

Ahead of a second round of negotiations on modernising the pact this week, Luxembourg’s energy minister Claude Turmes said in a webinar the EU might quit the treaty if there was no progress.

“I would not rule out that if nothing moves, if there is not sufficient movement, then you would have no other option than to collectively step out. That was also a discussion raised by France, although I can’t confirm the French government’s commitment,” he said.

Marjolaine Meynier-Millefert, a French lawmaker from president Emmanuel Macron’s party, said reform was preferable to ditching the treaty, but “if we are forced to do so then there would be no other option than to do so”.

On Tuesday, 139 lawmakers in the European Parliament issued a statement warning the treaty “is threatening the climate ambition of the EU domestically and internationally”. They said the EU should withdraw unless it can achieve a rewrite of the pact to scrap protections for fossil fuel investors.

Uniper uses investment treaty to fight Netherlands coal phaseout

The ECT is a pact signed in the 1990s to boost investment flows between western and post-Soviet countries. Provisions to deter states from grabbing private assets have been retooled by energy companies to fight climate policies.

Last year, German utility Uniper threatened to sue the Dutch government under the treaty, because a national plan to phase out coal burning would force the early closure of Uniper’s power station near Rotterdam.

The European Union has proposed amendments that reinforce governments’ “right to regulate” on issues like public health and the environment. But any changes must be passed unanimously and so can be blocked by any of the ECT’s 53 signatories.

A written submission from Japan published by the ECT secretariat in October 2019, before modernisation talks began, asserts 26 times: “Japan believes that it is not necessary to amend the current ECT provisions”.

Among the proposals rejected by Japan are language on the “right to regulate” and changes to the investor-state dispute resolution (ISDS) mechanism.

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Leaked ECT notes seen by Climate Home News show that, ahead of the first round of negotiations in July 2020, Japan expressed “great concerns” about an EU plan for a multilateral investment court to replace the ISDS.

Japan was supported in this by Kazakhstan. In the notes, both nations said “modernisation should be minimal”.

According to Yamina Saheb, a former head of the ECT energy efficiency unit and observer of the negotiations, the 12-strong Japanese delegation in July made no proposals to change the text and called for 2020 discussions to be limited to clarifying national positions.

Japan’s position as the largest single donor to the ECT and the vice chair of the modernisation negotiations means it is influential.

Pia Eberhardt, a researcher at Corporate Europe Observatory, told CHN Japan’s opposition means “it’s very unlikely that we will see any of the changes which we would need to see to make this agreement compatible with climate action”.

Countries promise green recovery at Japanese virtual summit, keep quiet on fossil bailouts

Japan’s reluctance to change the ISDS mechanism reflects the fact that, unlike many European countries, it has never been sued by foreign investors.

On the other hand, Japanese companies have used the ECT to take legal action against governments. So far, these have only been renewables companies angry at a decision by Spain’s previous government to cut subsidies and increase taxes – but fossil fuel companies could use the treaty in a similar way.

Japan is the only G7 country still building coal-fired power plants, both in Japan and overseas. According to Mission 2020, Japanese public finance is behind 24.7 GW of coal power in other countries. That is larger than Australia’s entire coal fleet.

These coal power plants are in India, Indonesia, Vietnam, Bangladesh, Chile and Morocco. None of these countries are signatories to the ECT but several are either in the process of acceding or are observers.

And in 2016, the Japanese government changed the law to allow its state-run JOGMEC agency to buy foreign energy assets.

Guterres tells India coal business ‘going up in smoke’ as investors back clean tech

Italy and Russia have left the ECT, although a ‘sunset clause’ means the treaty’s provisions apply for 20 years after they leave.

Russia withdrew from the treaty in 2009, when former shareholders of the Yukos energy company used the ISDS to claim compensation for assets they said had been expropriated by the Russian government.

Italy withdrew from the ECT in 2016. The government said this was to reduce costs associated with membership but it may also have been a response to renewable energy companies taking legal action over a reduction in solar power subsidies.

The post Japan blocks green reform of major energy investment treaty appeared first on Climate Home News.

Pic: Megan Cole/Flickr

By Sophie Yeo

The Winter Olympics in 2022 will be carbon neutral if China wins its bid to host them in the snowy mountainous regions of Yanqing and Zhangjiakou.

Kazakhstan, Beijing’s only rival to the title of Olympic host, has also pledged to compensate for all emissions generated by the games.

These promises appear in the countries’ applications to the International Olympic Committee, submitted this month, where they describe their vision and the logistics behind the Winter Games.

“It is the solemn pledge of the Chinese governments at all levels that an environment of better quality shall be provided for the people and the Olympic Winter Games,” reads the Beijing submission, promising to integrate sustainable development into its planning.

It is not the first time that organisers have aspired to such a goal. Since the 2002 games in Salt Lake City, offsets have been used to neutralise the carbon impacts of the Winter Games. Both China and Kazakhstan say they will use the same approach.

These will have to compensate for the carbon emissions of building and running numerous stadiums, housing the athletes and the emissions from the flights that will carry spectators from around the world to watch the sport.

“To this end, efforts will be made to establish Beijing as a national carbon trading centre around 2020,” says the Chinese application, while Kazakhstan says it will make use of the UN’s international carbon market, the Clean Development Mechanism.

Offsetting

Both governments have yet to flesh out their plans with details; but a carbon neutral winter games is a show that China is capable of staging, says Li Shuo, senior climate and energy policy officer at Greenpeace East Asia.

“They already have some practise from 2008 [Beijing Olympics] in going low carbon,” he told RTCC. “But for the Winter Olympics, if they’re going to go carbon neutral, they would definitely have to apply a lot of offsets.”

For China, this means more forests. The government has said it will set up a Beijing 2022 carbon emissions compensation mechanism that will be based on planting more forests, which store and absorb carbon dioxide from the atmosphere.

In its bid to the International Olympic Committee (IOC), it mentions plans for an “eco-clean valley and forest belts” around the Guanting and Baihebu Reservoirs and the development of an ecological corridor in Beijing and Hebei. In the ‘Games Zones’, 70,000 hectares of forests will be created.

Kazakhstan promises it will compensate for the vast emissions of the Olympic Games by “making investments in reforestation projects, energy efficiency systems and the use of renewable energy resources”.

Protecting the pristine

Simon Lewis from Team Planet, a sports and sustainability consultancy, said that offsets could be a “red herring” which prevents organisers reducing the actual carbon footprint of the event and protecting the pristine environments in which they take place.

“My concern is that everyone is rushing to their chequebooks and going for the easy option, and it gives everything a nice green sheen, but I think not enough is being done by reducing the real climate impact of these games,” he told RTCC.

Russia also pledged that their 2014 games in Sochi would be carbon neutral, but damage inflicted on the local surroundings during the construction of the Olympic site was a scourge to both environmentalists and residents alike.

China has promised to minimise the onsite environmental impact of the games by using “advanced energy-saving and eco-friendly technologies”, while it has promised that electricity generated by solar and wind power for lighting, transport and venue operations. In Zhangjiakou, 540 clean energy buses will be added to the network.

Kazakhstan, meanwhile, promises to protect the ‘Mountain Zone’, where some of the sports will take place, through measures that will prevent soil erosion, landslides and the loss of natural habitats and diversity.

“Most competition venues, especially in the environmentally sensitive Mountain Zone, already exist. Therefore negative impacts related to construction induced by the Olympic Games will be minimal,” the country adds in its bid. In China, on the other hand, concerns have been raised about the lack of winter sports facilities in the area.

Lack of snow

With the snow in Sochi so thin on the ground that organisers were forced to stockpile supplies ahead of the games, the climates of the bidding cities are likely to face scrutiny.

Kazakhstan promised sights “snow-clad peaks” and maybe even snow leopards in its application, while a fact-finding mission to China by international sporting federations left experts satisfied that there would be enough snow for the sports to take place.

But in Beijing, where some of the events would be held, snowfall is already becoming unreliable.

In 2014, the city recorded its third longest winter stretch without snow – 107 days – on record. The second longest was in 2010, and the first in 1970. This year, snow arrived for the first time today, January 14, around three months behind schedule.

In depth: Sochi athletes warn climate change “threatens” winter sports

It is uncertain how far the climate will warm over the next seven years ahead of the 2022 Olympics. But with the period in which snow is certain to be on the ground becoming less reliable, the dates could be key.

Both Beijing and Almaty say they will hold the Olympics and the Paralympics from 4 February to 13 March. The ski season ends around early April.

This is complicated by a potential clash with the 2022 football World Cup in Doha, says Rob Walker, who commentated on the 2014 Sochi Olympics for the BBC.

The heat of a Qatari summer means that the tournament might be pushed back to the winter, potentially forcing a shift in timing for the Winter Olympics.

“If they shift those dates, do they come earlier and go December, or do they go even later and go into March? And if they go into March, with the Winter Olympics, they really are running into the issue of trying to do an event which requires snow after the end of a snow season,” he said.

Air pollution

Beijing has promised that its noxious air pollution will be brought down to World Health Organisation standards in time for the Winter Olympics in 2022.

For residents who have to breathe the hazardous air, it is one of the main reasons they are backing the Olympic bid. During Beijing’s 2008 Summer Olympics, air pollution in the city was brought down to 88 – more than the WHO’s safe standard of 50, but an improvements on the usual readings of 300+.

China has said it will reuse some of the venues from the 2008 Summer Olympics in 2022 (Pic: Noel back in Zurich/Flickr)

“We live here in the dirty air and no one likes that at all. We hope for faster action to improve the air pollution, so I see the Olympics as a major driver,” says Changhua Wu, Greater China director of The Climate Group.

To this end, Beijing will spend US$130 billion by 2017 on its Clean Air Action Plan. This involves reducing coal, cutting vehicle emissions and phasing out high carbon businesses.

But this is not a new plan, and as it stands it will not bring air pollution down to WHO standards until 2031, according to Greenpeace, unless there are also strong efforts to reduce coal consumption in the neighbouring regions of Shandong and Hebei.

The success of the 2008 Summer Olympics depended on ad hoc measures including taking millions of cars off the road and shutting down hundreds of factories.

And the challenge becomes tougher in the winter, when the pollution in Beijing is at its worse.

This raises questions of just how long term the air pollution benefits to Beijing residents would be, says Greenpeace’s Li.

“If Beijing received the opportunity, I feel they will apply some ad hoc measures as they did in 2008, but I think the question to be asked is whether this will be sustainable.”

Legacy

Beijing promises that the Olympics would leave the country with a green legacy, and that this would go beyond cleaner air.

The government has promised to launch an action plan on World Environment Day (5 June 2015) called “Green Olympics, Green Homeland”, which it says will enhance the public’s environmental awareness and promote a green lifestyle.

For Kazakhstan, creating an Olympic district in the underdeveloped eastern past of Almaty will “serve as a showcase in sustainable urban development for the entire region”.

The winner will have seven years to prepare. For Beijing or Almaty, it is an opportunity to build a microcosm of what could be happening across the world: green, carbon neutral developments that when winter comes are covered in snow.

The post China and Kazakhstan compete for carbon neutral Olympics appeared first on Climate Home News.

Representatives of Belarus, Ukraine, Kazakhstan and Russia will meet next week in Minsk to decide if they will play any further part in the Kyoto Protocol, the Belarussian Ministry of Foreign Affairs has announced.

The landmark climate treaty was extended at last year’s UN talks in Doha, but the four former Soviet countries were angered after their ‘hot air’ allowances were effectively rendered useless.

Each allowance represents one tonne of carbon dioxide that a country can emit. A provision in the adopted KP amendment outlaws any increase in emissions up to 2020 from 2008-2010 levels.

All four countries protested at the conclusion of the Doha talks, with a Belarus statement arguing the new deal does “not provide any room for our economy growth and is not in line with the known Convention’s principals”.

The economic collapse of former Soviet countries in the 1990s meant their actual emission levels were far lower than those estimated when the Kyoto Protocol was drawn up

It added: “The said decision adopted in Doha also blocks our incentives and intentions to use the flexible market instruments like emissions trading, joint implementation  and national carbon market crucially important for our climate change mitigation measures and policy.

“Having said that, it would not be a surprise if the Government withdraws its letter of consent and does not ratify the Kyoto amendments adopted in Doha.”

The head of WWF Russia Alexey Kokorin told RTCC he expected Belarus and Kazakhstan to play no further part in the Kyoto extension.

“In the case of Belarus and Kazakhstan the change means emissions must be lower than 2008-2010 levels, so only developed countries making physical reductions in emissions can take part in the Kyoto Protocol with commitments,” he said.

“For Belarus and Kazakhstan, which aren’t really developed yet, and which have emerging economies and in Kazakhstan’s case lots of mining potential.

“They will continue to see emission growing and will incur a penalty that forces them to buy AAUs so that they are back down to the 2008-2010 levels.

“That’s not possible. So Belarus and Kazakhstan are excluded from the second period of Kyoto. Ukraine is also in difficult situation but has lots of hot air from the first period so it will probably be able to take part.”

The post Belarus, Ukraine, Kazakhstan and Russia meet to discuss Kyoto appeared first on Climate Home News.

Three former Soviet nations could leave the Kyoto Protocol as a result of a last minute change to the new terms of the treaty agreed in Doha on Saturday.

Belarus, Ukraine and Kazakhstan are unhappy with an amendment to the Kyoto treaty at the Doha UN climate talks that means their emissions must remain lower than they were between 2008-2010. They believe this will limit their economic development.

A negotiator representing Belarus told Reuters that he would advise his country to leave and that other former Soviet nations could do the same. Canada will officially exit Kyoto later this month having announced its intentions in Durban last year.

Russia raised its disapproval to the new Kyoto deal during the last session of the UN talks. The meeting’s President H.E. Abdullah bin Hamad Al-Attiyah, gavelled through the agreement regardless saying that consensus had been reached and Russian concern’s recorded.

Oleg Shamanov attempts to get the attention of the COP18 president to object to change to the Kyoto Protocol. (Source: UNFCCC/Flickr)

Russian negotiator Oleg Shamanov told RTCC: “The way those decisions were adopted, extremely seriously undermines the legitimacy of the regime and trust between the participants.

“We are absolutely sure that it would inevitably have very serious legal consequences for efforts of the countries and for ratification processes,” he added.

In UN legalese the offending paragraph is Article 1, amendment G of the Kyoto Protocol.

In English, amendment G means that countries will have to match their average emissions from 2008-2010 throughout the Kyoto Protocol’s second period, that runs from 2-13-2020.

This is a problem for economies in transition like Ukraine, Kazakhstan and Belarus who had hoped to increase emissions while they continue to grow and raise the standard of living.

The amendment, which was put forward by the Alliance of Small Island States (AOSIS), effectively means only countries reducing total emissions under Kyoto, rather than limiting their growth, can take part in the second commitment period.

“Belarus and Kazakhstan aren’t really developed yet. They have emerging economies and in Kazakhstan’s case, lots of mining potential,” said Alexey Kokorin, head of WWF-Russia’s climate change programme and a former Russian negotiator.

“They will continue to see emissions growing and will incur a penalty that forces them to buy extra carbon credits so that they are back down to the 2008-2010 levels. That’s not possible. So Belarus and Kazakhstan are essentially excluded from the second period of Kyoto,” Kokorin told RTCC.

“Ukraine is also in difficult situation but has lots of hot air from the first period, so it will probably be able to take part. I spoke to someone from the Ukrainian delegation in the airport on the way home from the Doha talks and they are happy enough. They can’t sell the hot air now, so they will use it to meet this new amendment. Belarus and Kazakhstan do not have any hot air though.”

There may still be some effort to reduce greenhouse gas emissions in Belarus, even if indirectly. The country is keen to detach itself from a reliance on Russian gas and will pursue renewable and nuclear energy to do so.

Jury out on Russia

Russia is left in a more difficult situation. It will have to weigh its own predictions for its economic, and emissions growth against the cost of limiting this increase and its own stocks of hot air. While Moscow crunches these numbers, we may not know definitively whether they will continue to take part.

One analyst told Russia Today (RT) that Kyoto had brought little economic benefit and that new environmental programmes provided other methods to reduce its emissions in the future.

“The output and consumption of energy resources in recent years fell below forecasts of the Ministry of Energy and Ministry of Economic Development, so Russia won’t face sanctions. As for carbon credits sales, it brought minimum profit to the country,” Lilia Brueva, analyst at Investcafe, told RT.

“Now there are several market mechanisms to cut the burden on the environment such as developing green technologies in the energy sector and implementing bilateral agreements between neighbouring countries such as China and Russia to cut emissions or to compensate damage,” Brueva said.

All nations will have binding emission reductions from 2020 onwards if UN negotiations on a new global deal continue successfully. Talks on that strand edged nervously forwards in Doha.

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Canada, New Zealand, Australia, Kazakhstan and the US Chamber of Commerce have been fingered as key culprits in blocking attempts to promote environmental reporting during the Rio+20 negotiations.

Steve Waygood, Chief Responsible Investment Officer at Aviva Investors said those parties had blocked their proposal for corporate sustainability reporting to become standard practice across the world – citing the US Chamber of Commerce in particular as ‘undermining everything’.

Aviva’s submission called on all United Nations member states to ‘commit to develop a Convention that mandates company boards to consider sustainability issues, and to integrate those issues that they consider to be material within the reporting cycle, in their Annual Report and Accounts – or explain why if they do not’.

Environmental, Social and Governance (ESG) reports allow analysts to work out how seriously businesses they are considering investing in take issues such as climate change, water use, human rights practices and political contributions.

Aviva argue that companies who withhold information from investors ‘that is important for the assessment of medium to long term risk and value’ impose a cost on the markets and undermine its effective functioning.

Industry experts we have spoken to estimate that nearly 80% of major businesses compile a form of ESG reports – but a major problem is that there are no legal standards – so they vary in clarity and usefulness.

Some reports were described as so ‘complex and long analysts cannot read them’, while most were compiled ‘for the sake of a report rather than for the business’.

Speaking at an All-Party Parliamentary Group meeting in London – Waygood said that attempts to block Aviva’s vision for comparable, transparent and relevant ESG reports – backed by Thompson Reuters, Schroders, Hermes and F&C – had left him deeply frustrated.

“Because we were part of the process for so many months I can tell you that the people blocking us were Canada, New Zealand, Australia, Kazakhstan and more than anything the US Chamber of Commerce,” he said.

“If we do not resolve the US Chamber of Commerce, which is not democratically accountable, we will not get any action that applies from a UN process from any treaty.

“They simply undermined everything – they are recalcitrant and they exist to undermine in their words ‘anything that applies to US business’ and I am very happy to be able to say that here.”

The US Chamber of Commerce did not respond to RTCC’s request for a comment.

Short term-ism

In a further email exchange Waygood added: “In my view lobbying against such a proposal represents the worst form of lowest common denominator trade body interference in the development of a more sustainable economy.

“It appears to be based on short term thinking and an almost reflex action against any policy measures that shape the future of business.”

Brazil, Mexico, South Africa, Norway, Switzerland, France and the UK have all been supportive of the proposals – with the conclusions from narrative reporting discussions expected later this year.

Some governments are taking action on a national level to improve the quality and quantity of information available.

UK Deputy Prime Minister Nick Clegg used his platform at Rio to reveal that all companies listed on the on the main market of the London Stock Exchange will have to report their greenhouse gas emissions annually – a move that was welcomed by green groups who had been pushing for this measure for years.

And despite Aviva’s proposal hitting the wall in Rio, Deloitte partner Guy Battle told RTCC the markets will ultimately force all businesses to compile clear and comprehensive ESG reports.

“What was interesting about the first week of Rio was the enthusiasm with which business was acting [in this regard]”, he said. “There was a lot of discussion about reporting.”

“We have to move towards a form of Radical Transparency. Companies have to realise that we are living in a world where Radical Transparency is a good thing.

“It’s good for the investment community as they can see the opportunities and the risks. It’s a test of how efficient you are as a business.”

RELATED AUDIO: Deloitte Head of Sustainability and Climate Change Nick Main explains why businesses need to develop a climate change strategy now in order to survive in the future.

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