Why European Union might have to Rescind the Green Tax on Airlines as India,China and USA gang up

11 Jan, 2012
Climate Change

Europe which has been one of the greenest regions on earth in terms of promoting green energy and reducing carbon emissions is set to face a severe test. Europe is going to impose a Carbon Tax on Airlines flying into the region from 2012 . This has got the other major countries seeing red, with most of them planning retaliation. This Green Tax will add around $3 billion per year in terms of extra fees from airlines or around $6 per extra passenger. While airlines from USA and Canada approached the court, airlines from India and China are refusing to pay the tax outright. Indian airlines won’t supply their carbon data while China won’t pay the taxes . Note European Union is isolated in this fight against climate change . Though Carbon Trading is not a perfect system and open to abuses, at least it makes a pretense to fight global warming. On the other hand,these other countries have no plan or intention to fight climate change.

With global public opinion focused on the economic crisis , governments don’t care a hoot for a problem that is a decade away . So instead of enacting some policies to reduce carbon emissions from airlines which is around 3% of the carbon emissions or around 300 million tons, they want to browbeat the European Union.

Why European Union might have to Rescind the Green Tax

1) Retaliation by other countries on European Airlines like putting up overflight fees

2) Action against the European Airline Industry (Airbus), if countries like India and China prefer Boeing for their aircraft orders

3) Flights will be diverted away from Europe to avoid the Green Tax. The main beneficiaries will be Emirates, Ethihad over Lufthanse and British Airways on transworld flights

4) Ruling against European Union in international courts against violation of international airline treaties

EU stops the Free Carbon Lunch – Airline Prices to Increase to factor in Carbon Emissions

Airline Ticket Prices are set to go up as European Union implements its ETS Scheme on the Airline Industry from 2012.Note EU as a region has been one of the most active players in the climate change arena  and has an active carbon emissions market.Though this market has encouraged fraud and profiteering by unscrupulous players making it a good target for the fossil fuel lobby,the principle to fight against global warming is a good one.Compare that to USA,Canada and Japan who have done nothing to fight climate change despite the wealth of these nations.Canada has been guilty of abandoning the Kyoto Plan after missing its previous target.It has faced no penalties as it is not legally enforceable.The country continues down the pollute as much as you can pushing oil extraction from tar sands which is much more dangerous to the environment than normal oil drilling.

Europe’s Doomed Flight of Decarbonizing Fancy

The decision to include the airlines – responsible for just 3 percent of global CO2 emissions – in the EU cap-and-trade scheme came in the wake of the failure to agree a global agreement. While airlines will only pay for 15 percent of their emission allowances in 2012, around €256 at current market prices, from 2013 they will have to pay 18 percent. The airline industry estimates the cost over the first 8 years will be in the region of €17 billion ($23.8 billion). Although the carbon pollution bill kicked-in on January 1, 2012, invoices will not be sent to airlines until 2013; which is why non-EU governments are considering their next moves carefully.

At the heart of the “legal options” for the airline lawyers is the international agreement regulating air commerce known as the Chicago Accords. More prosaically known as the Chicago Convention on International Civil Aviation, its opening section specifically states, “The contracting states recognize that every state has complete and exclusive sovereignty over the airspace above its territory.” The new EU carbon regulations clearly violate the terms of this agreement by seeking to regulate air flight above nations outside Europe.

EU stops the Free Carbon Lunch – Airline Prices to Increase to factor in Carbon Emissions

3 Jan, 2012
Climate Change,Europe

Airline Ticket Prices are set to go up as European Union implements its ETS Scheme on the Airline Industry from 2012.Note EU as a region has been one of the most active players in the climate change arena  and has an active carbon emissions market.Though this market has encouraged fraud and profiteering by unscrupulous players making it a good target for the fossil fuel lobby,the principle to fight against global warming is a good one.Compare that to USA,Canada and Japan who have done nothing to fight climate change despite the wealth of these nations.Canada has been guilty of abandoning the Kyoto Plan after missing its previous target.It has faced no penalties as it is not legally enforceable.The country continues down the pollute as much as you can pushing oil extraction from tar sands which is much more dangerous to the environment than normal oil drilling.

Not only have other countries not done anything to curb emissions they have protested against EU as well for imposing carbon emission taxes on airlines.Note airlines are a big carbon emitter and this part can be easily be avoided through use of biofuels and carbon mitigation efforts.However everyone wants a free carbon lunch.In my view it is a great move and other polluting industries everywhere should be made to pay for the global common goods.The voracious use and exploitation of world resources has to stop sometime .

Gulf carriers say EU scheme may inflate fares: Report

Fast-growing Gulf airlines Emirates andEtihad Airways warned of higher ticket prices on Tuesday as they look to pass on costs of a European Union carbon trading scheme to passengers. Tim Clark, the president of Emirates, Dubai’s flag carrier and the world’s largest long-haul airline, told the Gulf News newspaper that the company would spend over 40 million euros ($51.93 million) in 2012 to purchase additional emission allowances. The EU says the new scheme, which already applies to other industries, is the fairest way to cope with aviation’s contribution to global warming.

However, it has sparked a trade spat, with the United States, China, India and others accusing it of infringing their sovereignty.

Note USA has completely given up its carbon emission plan as well despite high hopes with the election of Obama.Most firms and exchanges that were set up have closed down.EU carbon credit prices are touching new lows as the apathy towards global warming keep growing.It will only take a massive crisis to wake everyone.Lets hope its not too late.

Curtains Fall on only US Carbon Trading Chicago Climate Exchange on Republican Ascendancy

Chicago Climate Exchange the only USA Exchange to allow trading of Carbon Emission Credits has been shut down by its owner ICE.While I am no fan of Carbon Emissions Cap and Trade Policy as it gives rise to Frauds and  Misplaced Incentives,the mechanism is one of the popular subsidy tools in combating Global Climate Change.Note Carbon Cap and Trading was on the Policy Agenda of the Obama Administration,however a deadlock in the Senate prevented any move in 2010.The US has been a huge laggard in the global warming fight and  with the Republican Ascendancy following the MidTerm Polls,things are  set to stay the same.Despite the BP Oil Spill and Record Global Temperatures,US remains blind to its climate obligations.With US reluctance,the Climate Change has been in Cold Storage with little progress  expected in Cancun Meet.

Green Banking in India Accelerates – ICICI funding Cleantech R&D,Canara Bank Solar Lighting and SBI using Wind Energy

4 Jul, 2011
Energy,Finance,Renewable Energy

Green Banking in India has started increasing at a rapid pace as concerns over Global Warming increase.Most of India’s Banks are pushing for Clean Technology in their separate ways.Though there is lack of regulation on funding of environment friendly projects,Banks are pushing ahead on their own anyway.India’s Financial Sector has seen the writing on the wall as the largest bank SBI is using Wind Energy for captive consumption to reduce its carbon footprint.The Bank is also reducing the interest rates for Green Projects beside helping in carbon consulting of customers.SBI is also implementing thousands of Green Kiosks to reduce the need for paper.ICICI Bank is helping funding research in clean technology using TFD while Canara Bank has funded almost 50,000 units of Solar Lighting .

Most of Green Banking is in providing loan at concessional interest rates to customers though its a difficult job given the conservative nature of banking and the newness of the Green Industry.Finance Companies in India have been facing a tough problem in lending to Solar Energy projects in India under the JNNSM.Their reluctance is due to the bankrupt condition of the state distribution electricity companies and the inexperience of solar power developers in India.However the Banks have in spite of all this introduced debt products with SBI extending a 15 year tenure project financing loan for a solar power project.Note Green Banking is essential if India wants to meet its target of 15% of Energy coming from Renewable Energy by 2020 from around 5% at present.

Banking on green projects

Recently, Naina Lal Kidwai, group general manager and country head, HSBC India, had sought regulations for banks on funding projects that may not be environmentally sustainable. Kidwai had expressed the need for certain uniform standards or guidelines to be adopted by the banks for funding projects that are not environmentally friendly.When asked if there are projects that the bank does not finance because of environmental concerns, she says, “Since there are no fixed standards, if I don’t lend, somebody else will. But we definitely seek an environmental audit or the road map of the company on clean technologies before we lend. In case the company does not have a clear strategy, we will not be comfortable lending.”

However, the scenario seems to be changing swiftly since the Indian economy has seen the emergence of green banking.Thanks to the increased awareness about global warming, banks are now putting their acts together, taking into consideration the environmental concerns more seriously than before.

European Carbon Trading Market goes into a Huge Slump on Greek concerns,post 2012 Kyoto uncertainity

28 Jun, 2011
Climate Change,Europe

The European Carbon Trading Market which is the biggest cap and trade market in the world has gone into a monster slump with carbon credit prices having fallen to around 10 euros which is the lowest since March 2009 when almost every global asset had fallen to multi year lows.The trigger for the correction in prices is the future of the EUA scheme in which major carbon emitters in Europe are restricted to quotas and have to buy carbon credits if they exceed their limits.A huge amounts of United Nations CERs are sold into this market as they are allowed to to so.This has led to the mushrooming of a huge growth of carbon consultancies in India and China which help projects in obtaining these lucrative CERs.Note this has recently become highly controversial with a number of frauds happening in trading of these carbon credits.Top investment banks have been convicted of fraud and big sellers of CERs like the HFC producing companies have made ludicrous windfalls of hundreds of millions of Euros.Some of these companies have now started focusing in winning these CERs which are much more profitable than their core operations.

With the global talks on climate change failing and none of the major countries interesting in doing anything about global warming what will happen to the post 2012 Kyoto Framework which allowed the United Nations Clean Development Mechanism (CDM) is a big question.This plus the upcoming debt default/restructuring of Greece has thrown the entire future of carbon trading in Europe into major uncertainity.This has led to a 33% fall in the price of carbon credits in the last month as fear grips the major participants.Note in my opinion CDM and Carbon Trading are one of the worst thought out mechanism to control climate change and have given risen to profiteering and frauds and not much to tackle climate change.

Carbon offsets fall below 10 euros, new 2-year low

International carbon offsets fell below 10 euros per metric ton for the first time since March 2009 early on Monday morning, but traders were unsure whether carbon prices were poised to drift lower or stage a rally.

The ultimate fear is for the robustness of the whole EU project in the event of a possible Greek and other sovereign defaults, given that emissions trading is a creation of EU states.

Australian,Indonesian,African Coal Mines Selling like Hot Cakes amongst Power Hungry Indian,Chinese Comanies

19 Mar, 2011
Africa,Australia,China,Coal,Energy

Coal Mines in Indonesia,Australia,Africa and North America are selling like hot cakes as Indian,Chinese companies as well as mining conglomerates like Rio Tinto,Vale,BHP Billiton fight to secure raw materials.Note India and China are consuming huge amounts of coal to power their thermal plants.While China consumes a monstrous 3 billion tons,Indian demand is rising at more than 10% a year though on a smaller base.Coal is the cheapest form of power despite its polluting and health hazardous affect.Though Coal Plants in Developed countries are becoming much more expensive to build due to taxes and opposition by environmental groups,there is no stopping their furious growth in countries like China and India.Though India too faces some environmental opposition,massive ultra mega power plants with capacity of 4000 MW are getting built by new Indian private utilities

With domestic coal production rising at a snail’s pace,these companies are racing to secure coal supplies at whatever price they can get.Steel companies too are hungry for coal as it forms a major component of their product.Lanco Solar,Adani Power,Reliance Power,Tata Power,Tata Steel,Coal India have all bought or are in the process of buying coal mines and coal companies in foreign countries.Australian and Indonesian miners are minting top dollar as competition hots up with Rio and BHP Billtion also using thier massive cash hoard into play.Australian coal mining company Whitehaven Coal is the latest to put iself on the selling block with a price tag of more than $3 billion.More than 20 companies are set to be looking into entering the tendering process.

$3.2bn Australian miner: AV Birla to join race

The $29-billion Aditya Birla Group is set to join the race to buy Australian coal mining company Whitehaven Coal.Close to 20 players — including the Anil Dhirubhai Ambani Group and consortia of Korea Resources Corporation and Daewooand China’s Shenhua Energy and Yanzhou Coal — are believed to be interested in the company.

Only half of them are likely to be selected for the formal bid-level discussions starting next month.But at a time when global coal prices are rising due to shortages, acquiring coal assets has become a strategic option for trading purposes as well.Whitehaven has interests in tenements covering 427 sq km in New South Wales.

The company also operates a coal handling and preparation plant and a rail loader.

Whitehaven has four open-cut coal mines – Rocglen, Sunnyside, Tarrawonga and Werris Creek – which produce around 1.5 million tonnes a year.

The Canyon mine is undergoing maintenance and has not produced since July 2009. Another coal mine, Narrabri North, was supposed to start producing in 2010, but did not.

Soaring Coal Prices Increasing Global Electricity Rates making Green Energy more Lucrative

Voracious Surging Coal Demand in India and China Defeats Climate Change Mitigation Efforts

India’s Environment Ministry bows to King Coal – Allows Mining in “No-Go” Forested Areas

List of Coal Mining Companies/Stocks in India – A Great Buying Oppurtunity

Indian Private Power Companies jockey for the Biggest Utility Position

After Wind Farms,United Nations Axe falls on Carbon Credits from HFC plants in China

23 Aug, 2010
China,Climate Change

The United Nations Clean Development Mechanism(CDM) has faced a huge amount of criticism on the way it works.This mechanism which was established under the Kyoto Protocol gives Billions of Dollars to Projects in Developing Countries which reduce the emission of Carbon Dioxide.The complicated process which involves a ton of regulations and approvals is prone to gaming by market participants who are well connected.This have given rise to mom and pop carbon consultancies in India which alongwith China accounts for a majority of these projects.Note the CDM mechanism allows the trading of CERs which recently saw a huge fraud by investment banks in Europe.This had led to calls of this expensive and wasteful scheme to be shut down.The CDM panel has responded by cracking down on new projects emanating from India and China.The Panel rejected CER requests from a new supercritical coal power plant in India besides summarily rejecting Carbon Credits from around 70 Wind Farms in China

Now the UN Panel cracks down on the biggest beneficiaries the Hydrofluoro Carbon Plants

HFC Plants account for a large share of the CER issued by the UN Panel.These Gases which are used in Refrigeration Industry are potent cause of Global Warming as their ozone destruction power is multiple times that of Carbon Dioxide.Like other Projects,HFC plants in China have come under the United Nations Axe.The United Nations is reviewing the Carbon Credit Requests from 5 plants in China and their is a high probability of cancellation of these requests.NGOs and activists have alleged that these HFC plants emit more GreenHouse Gases (GHGs) than is required in the normal function of the  plants.This leads to increased revenue from neutralizing these gases defeating the entire purpose of the CDM scheme.Carbon Trading  has repeatedly been proved to be an inefficient and ineffective scheme,but its popularity continues to increase around the world.The Scheme is suitable for niche purposes and  is totally inadequate as a holistic response to the problem of Climate Change

U.N. panel to review CER request from 5th HFC plant – Reuters

A United Nations panel will review a carbon offset request from a fifth greenhouse gas destroying plant, the UN said on Friday, a sign that all similar projects approved under a Kyoto Protocol carbon finance scheme will be scrutinized.

The UN’s climate arm said on its website it would review a request for offsets, called Certified Emissions Reductions (CERs), from the Zhejiang Juhua project in China, which makes money by destroying a potent greenhouse gas called HFC-23.

The project was approved under Kyoto’s $2.7 billion Clean Development Mechanism (CDM), which helps fund cuts in carbon emissions in emerging economies.

It is the fifth HFC-23 project this week to have its CER issuance request face an additional review by the CDM’s executive board. It had requested 1.44 million CERs for abatement activities between September and November 2009.

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