Nicaragua Canal postponed again for environmental and/or financial concerns

The west coast of Nicaragua, near the proposed route of the Nicaragua Canal.  Photo: Dylan Walters.

While climate change negotiations dominated headlines this month, another global environmental concern came to a much less publicized turning point.  The proposed Nicaragua Canal project, which would move more earth than any infrastructure project in history, has been postponed until at least late 2016, according to the project team:

The company said the “design of the canal is being fine tuned”, in accordance with recommendations contained in an environmental impact assessment [...] “The construction of locks and the big excavations will start toward the end of 2016.”  HKND officials have said the route may be adjusted and other changes made to the original plan in order to offset such concerns and ensure the project is in compliance with international standards, so it can win support from the World Bank and other global institutions.  Such claims remain contentious [...]

Other concerns focus on the financing of the project, which remains obscure. HKND says it plans to build a global consortium with investors from many countries. Until now, however, most of the seed money has reportedly come from Wang’s personal fortune.

And that fortune has been devastated in recent months, as the Chinese stock market collapse has dramatically reduced Wang Jing's capacity to personally finance the project.  Bloomberg called him the worst performing billionaire in 2015:

Telecommunications entrepreneur Wang Jing, 42, was one of the world’s 200 richest people with $10.2 billion at the peak of the Chinese markets in June, according to the Bloomberg Billionaires Index. His net worth has since fallen to $1.1 billion.  His 84 percent drop so far in 2015 is the worst recorded by the index [...]

The billionaire said in a December 2014 televised press conference in Nicaragua that he was committing personal funds to the project, and he’s poured about $500 million of his own money into it so far [...]

“The turn of fortune in Mr. Wang’s financial resources will impact how and whether the canal can and will be built," said Daniel Wagner, CEO of Country Risk Solutions and a former country risk manager at General Electric Co. “I would expect, given this year’s financial gyrations in China, that the government is also asking itself whether the canal is a viable proposition."

Wang will most likely recover, but it will be difficult to convince investors to back the project if the environmental and social concerns remain a point of global concern.  This NPR segment suggests the canal will remain contentious for some time:

COP 21: 5 Thoughts on the Final Draft

A replica of the Eiffel Tower made from bistro chairs stands at the COP 21 conference venue.  Photo: Ryan Stoa.

The COP 21 Final Draft of the Paris Agreement has been released (see here for the text).  After months of preparations and weeks of negotiations, the text concludes the drafting phase of the agreement.  It's been fun following the ups and downs of COP 21, and a special thanks goes out to the Centre International de Droit Comparé de l'Environnement and FIU's College of Law, Sea Level Rise Solutions Center, and Institute for Water and the Environment for inviting me to the conference and allowing me to participate.  The process (and blogging!) isn't over, as countries now need to ratify the agreement through their own domestic political processes, and of course, the agreement needs to be, you know, implemented.  But for the moment we can step back and take stock of what the Paris Agreement means for international climate action.  5 thoughts:

The mood in Paris is optimistic

It's been a while since an international climate conference concluded on good terms.  The last major effort in Copenhagen was panned as a failure, breeding cynicism that a climate deal could ever be reached.  While the Paris Agreement has its faults (see below), it at least succeeded in bringing countries together to get started (if belatedly) on this business of climate change mitigation.  The conference birthed the "high-ambition coalition" which includes both poor and rich nations, and many of the world's biggest polluters were enthusiastic about ambitious mitigation targets:

One of the most unexpected developments in Paris is the biggest polluters coming around to the idea of setting an even more ambitious target of 1.5 degree. Canada, Australia, European countries, China, and the United States have all spoken in favor of recognizing the damage above 1.5 degrees.

The final text adopted the less ambitious goal of limiting warming to 2 degrees, but nonetheless, it's encouraging that on a philosophical level countries are realizing that climate change must be addressed.  Now they can decide how.

5-Year Reviews are In

I wrote at the outset of the conference that there was some consensus forming around the idea that countries' emissions (and progress in meeting emissions reductions) would be reviewed every five years.  That would allow the international community to monitor progress (and laggards) while providing a basis to adjust emissions reduction targets if climate science paints an increasingly bleak picture.  5-Year Reviews ended up being much more contentious than expected, as China pushed for more ambiguous reporting requirements.  The United States pushed hard to keep the 5-Year Reviews in the agreement, and in the end they were successful.  Based on its negotiating stance, the US should expect to lead the review effort, providing financial and technical assistance to developing countries to conduct the reviews.  The Reviews will begin in 2019.

Decarbonisation is Out (more or less)

One of the more ambitious goals of previous drafts of the agreement was complete decarbonisation by 2050.  In other words, to produce 100% of energy through renewable sources within 25 years.  It was always a bit of a reach, but the fact that decarbonisation was a talking point and negotiating item at all was surprising to some.  The final draft only calls for carbon neutrality (no net increase in carbon emissions) sometime in the second half of this century.  A far cry from decarbonisation by 2050.

Climate Finance tabled for now

The most divisive issue at COP 21 may have been the differentiation in responsibilities between rich and poor countries.  I wrote about this on Tuesday, particularly the "loss and damage" provisions that developing countries were desperate to include.  "Loss and Damage" provisions are in the final draft, but lack any meaningful obligations.  In fact, the preamble specifically interprets the loss and damage provisions of the text to not "provide a basis for any liability or compensation."  In other good news for rich countries, the financial obligations can was kicked down the road.  The previous commitment to provide 100 billion USD was maintained as a floor, while an increase in that amount was tabled until 2025.  A short-term win for developed countries, but one that doesn't resolve the underlying tensions between rich and poor countries when it comes to climate change.

The scope of the Paris Agreement was appropriately narrow

Anytime an environmental issue makes it onto the international agenda in a high-profile way, there's a temptation to piggy-back by making the issue a proxy for every other environmental issue.  Technically it's pretty easy to do, as environmental challenges are so intertwined that addressing one can be reasonably argued to be a prerequisite for addressing another.  And so it was at COP 21, where many were campaigning hard for the climate agreement to meaningfully address the role of women, indigenous groups, management of the oceans, and a host of other climate-related problems.  I spoke at an event on Thursday that was focused on human rights and climate change, and most of my co-panelists spoke with disappointment that the text was unlikely to address human rights.  These focus issue groups will be disappointed that the final draft does little (if anything) to address their core concerns.  Unfortunately, that probably wasn't realistic in the first place.  It was hard enough for negotiators to agree to a text that was narrowly focused on carbon emissions.  In fact, the conference went longer than expected in order to get it done.  Climate change does implicate countless other environmental challenges, but to add them all to the agenda would have precluded agreement on a more focused topic.  Many groups will be disappointed by the final draft, and they are right to continue pushing for progress, but at its core the Paris Agreement was about carbon emissions.  That other related issues were dropped along the way shouldn't detract from the fact that for the first time the international community has a meaningful framework from which to continue addressing climate change.

The Climate Generations area of COP 21 near the end of the conference. Photo: Ryan Stoa.

COP 21: As deal comes together, China and Saudi Arabia push back

Here is the new draft of Paris agreement https://t.co/peHn9dY2Oc #COP21 pic.twitter.com/mHY4nKg22c

— COP21en (@COP21en) December 9, 2015

Climate diplomats have 940 decisions to make in 3 days https://t.co/eHtCuFWM8r #COP21 pic.twitter.com/79wUEc4SFt

— Bloomberg Business (@business) December 9, 2015

Yesterday I wrote about the divide between developed and developing countries on the matter of climate change liability, so it's a pleasant surprise that the European Union and 79 African, Caribbean, and Pacific countries have formed an alliance to back a legally binding climate agreement with 5-year review intervals. 

Also encouraging was the release today of a clean draft of the Paris Agreement.  There are still many contentious questions to resolve in the next two days, including fundamental issues such as the purpose or goal of the agreement:

And on the collective end-game:

And with the end in sight, obstructionists are emerging.  So far reports call out China and Saudi Arabia for being the most active in frustrating progress.  On Saudi Arabia:

Behind the closed doors of negotiating sessions [...] the Saudis have strenuously resisted efforts to enshrine ambitious goals into the text of a Paris agreement.

The Saudis objected even to the mention of 1.5C – a new more ambitious target for limiting warming now endorsed by more than 100 countries including vulnerable low-lying states and big polluters such as the European Union and US.  The kingdom balked at the goal of decarbonising the economy by 2050.  The Saudis have also objected to demands for periodic reviews of climate plans, according to accounts from negotiators and observers. Saudi delegates complain that submitting a climate plan before Paris was difficult enough.

“It is unacceptable for developing countries, like my own, to be asked to participate in this so called ratchet mechanism,” the Saudis were reported to have told the session.  “It was tough, we had to go to every ministry, every part of government. We developing countries don’t have the capacity to do this every five years. We are too poor, we have too many other priorities. It’s unacceptable,” a Saudi delegate said.

And on China:

Beijing's negotiating stance was causing anxiety among many delegates on Tuesday as the Paris talks intensified ahead of Friday's deadline, partly because India was expected to be a bigger obstacle to a successful agreement.

In Paris, however, one delegate told the FT that behind closed doors, India has been "quite helpful" on some measures while China's negotiators have been siding with other developing countries on several divisive issues, including a push to provide more information about the volume of each country's emissions.

In a sign of the tensions growing in private meetings this week, the EU climate commissioner, Miguel Arias Canete told reporters that although China's President Xi and other world leaders had called for strong climate action at the opening of the Paris talks, "things are much more complex" inside the negotiating rooms.

The Gulf Cooperation Council's Plenary HQ at COP 21.  Photo: Ryan Stoa.

COP 21: "Loss and Damage" provisions have become the sticking point

Protesters at COP 21 target developed countries in demanding reform.  Photo: Ryan Stoa.

Ever since the United Nations Framework Convention on Climate Change was created in 1992, there has been a division between rich industrialized countries and poorer industrializing countries.  The rich countries have typically been the strongest proponents of climate action, arguing that with all this new climate science it's everyone's responsibility to cut back on emissions.  In response the poor countries point out that rich countries got to reap the rewards of fossil-fuel driven industrial growth, and that growth is largely responsible for the GHGs trapped in the atmosphere. 

The COP 21 negotiations are showing that both groups have succeeded in making their point, to some extent.  That each country has shown up and pledged to reduce their emissions, including developing country giants like China, India, and Brazil, means the developed countries have succeeded in making emissions reductions a near obligation.  On the other hand, the developing countries have hinged the success of the Paris Agreement on the strength of the text's "loss and damages" provisions.  Essentially, in exchange for reducing emissions, developing countries want financial assistance from developed countries to help them cope with climate impacts. 

It's a reasonable request, and one the developed countries have essentially already agreed to in a broad sense, but it raises a number of thorny particulars that negotiators are having trouble resolving.  Resolving questions like Who has to pay, and how often?  and Who gets to receive, and for what purpose? are one challenge, but a potentially bigger hurdle will be the conceptualization of "loss and damage" provisions.  Developed countries are categorically against any language in the text suggesting they have legal liability for climate damages like loss of land, building damage, etc.  They are willing to make voluntary financial payments, but won't accept legal responsibility for climate impacts:

Industrialised countries acknowledge that they are obligated to provide climate finance, but with an eye on the changing global realities, would like developing countries "in a position to do so" to contribute to the money pot. This attempt to increase the donor base has been strongly contested by the developing countries.

The other contentious issue is who is eligible to receive the funds. All developing countries are eligible but increasingly there is talk of funding for "vulnerable" countries. There is however no clarity on what defines vulnerability. Many in the negotiations see this talk of vulnerable countries as a bid to divide up the developing countries bloc. The G-77 and China comprising a diverse developing countries have presented a resolutely unified front on the question of finance.

Ultimately the developing countries may realize that no country is going to accept the legal implications of a robust "loss and damages" provision.  Instead, they might end up angling for a strong financial commitment.  Rich countries, for their part, can make those commitments without implicating any legal obligations.  Instead of providing compensation for damages incurred from climate hazards like hurricanes, they can subsidize hazard insurance for countries in particularly vulnerable areas.  Many are saying the "loss and damage" provisions will come down to the wire.  Stay tuned.

COP 21: Paris Agreement won't address emissions from shipping

Totally agree @Maria_Skipper: "We need flag neutral regulation of CO2 for #shipping, 70% of global fleet is in non annex 1 countries" #COP21

— John Kornerup Bang (@JohnKornerupBan) December 5, 2015

Shipping & aviation... the elephants in the room of #COP21 https://t.co/Z28AnUhzNu #Paris2015 pic.twitter.com/qWtYK2VfhK

— TckTckTck (@tcktcktck) December 4, 2015

#BunkerFuel Paris climate talks: Weak text on shipping looking likely https://t.co/nFKUGYO7II

— Bunkerworld (@bunkerworld) December 7, 2015

The European Union released a report last week claiming that the global shipping industry may account for 17 percent of global GHG emissions by 2050 (it already accounts for 2.4 percent).  If the industry were a country it would be the sixth largest polluter.  But because it isn't a country, and the industry as a whole lacks meaningful regulation, the Intended Nationally Determined Contributions (INDCS) countries are putting forth to validate their emissions cuts don't account for the shipping industry.  That responsibility falls to the International Maritime Organization, a UN body with regulatory authority but little capacity to impose new rules on the world's existing shipping fleet. 

The original draft of the Paris Agreement included some language that would address shipping emissions, but the latest draft has dimmed the prospect of regulating the notoriously elusive industry.  At best it might implore the IMO to create GHG emissions reductions targets.  Putting the industry on notice that its emissions will be a concern going forward is better than nothing, but certainly a disappointment to climate activists.  Ben Adler's take:

There are many ways in which regulations could bend the industry’s emissions curve downward. The most obvious would be stricter and more broadly applied fuel-efficiency standards. The IMO could also set speed limits, as ships emit less when moving slower. Alternative fuels could be researched and deployed. Also, ships use a lot of electricity for on-board operations, and that could be generated using sources other than oil, as cargo ships are big enough to support solar panels or even wind turbines.

The IMO, despite having commissioned a report that demonstrates the scope of the problem, has yet to take action. Critics suggest that bureaucratic inertia and coziness with the shipping industry could be to blame. So it may need a push.

Precisely because it is so central to economic activity, shipping is a touchy subject for the international community to tackle. As a small island nation, the Marshall Islands is as economically dependent on shipping as anyone. More so, in fact: 6.1 percent of the world’s ships (by tonnage) are registered in the Marshall Islands and provide a major source of its tax revenue. That’s why it’s afraid to act alone to regulate ships. If it were the only country to impose new rules on ships flying under its flag, the ships would just register elsewhere. But the Marshall Islands isn’t afraid to push for strong global rules that would be the same for ships registered in any country. Whatever risk to its economy that might pose, it pales in comparison to climate change.

COP 21: Consensus Emerging on 5-year Reviews

China pledges to cut emissions in power sector by 60% by 2020 https://t.co/o6SjXGemcP #COP21 pic.twitter.com/gYB16lUNuE

— COP21en (@COP21en) December 2, 2015

Slow progress ‘frustrating’ says UN climate official: https://t.co/OPbtgBTO8B #COP21 pic.twitter.com/rICpUw3JRK

— Climate Home (@ClimateHome) December 2, 2015

On the third day of the Paris Agreement negotiations, a consensus is emerging that countries should be evaluated every 5 years to monitor progress towards curbing emissions.  Periodic reviews have the benefit of ensuring that countries (and the international community) are aware that they are or are not meeting their emissions reductions commitments.  They also create an opportunity to impose further reductions if climate science continues to paint a bleak picture.  Here's Reuters:

Climate negotiators in Paris are drawing close to resolving one of the sticking points for a breakthrough emissions pact by favoring a five-year review period on promised greenhouse gas cuts, a top official said on Wednesday.

Regular reviews are seen as a crucial part of any agreement since countries' current pledges to cut emissions - submitted by 185 nations to the United Nations - will fail to prevent temperatures from rising 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial times, seen as a dangerous level.

Countries have disagreed as to how often audits of those plans should take place. While many major emitters including China, the United States and the European Union supported a five-year period, a term included in an outline U.N. text last month, others such as India have been reluctant to commit.

"It seems now there is a growing consensus that (reviews) will be every five years," U.N. climate chief Christiana Figueres told a news conference on the third day of talks.There was still little progress on thornier issues, though, such as funding for developing nations and a long-term goal for phasing out fossil fuels.

COP 21: Opening Statements

Depuis hier, la #TourEiffel est "végétalisée"! #COP21 cc @1Heart1Tree photos ©Mairie de Paris/Sophie Robichon pic.twitter.com/pJC94cmrcb

— Paris (@Paris) November 30, 2015

Today marked the first day of the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change.  Negotiators will be hammering out the details of the Paris Agreement for the next two weeks (for an overview see here), but for today the spotlight belonged to the world leaders setting the stage for the conference.  

A common thread being woven into the various speeches is the important role that climate action and the COP 21 will play in the fight against terrorism.  Here is US President Barack Obama on that nexus:

He added that the meeting symbolised a global "act of defiance" that proves the world stands undeterred by attacks linked to the Islamic State of Iraq and the Levant (ISIL) group in Europe and beyond.

"What greater rejection of those who would tear down our world than martialling our best efforts to save it," Obama said.

And the host, French President Francois Hollande:

"What is at stake with this climate conference is peace," [Hollande] said at the opening of the summit.

"The fight against terrorism and the fight against climate change are two major global challenges we must face," he said.

Chinese President Xi Jinping is emphasizing the need for developed countries to support developing countries financially.  And Pope Francis described humanity as being "at the limits of suicide."

More to come as the negotiations progress.

A la #COP21, 20 chefs d'État s'engagent avec les entreprises à favoriser l'innovation verte. pic.twitter.com/za8FSHKdmf

— France Diplomatie (@francediplo) November 30, 2015

The Politics of Solar Energy in Florida

Rooftop solar in San Marco Island, Florida.  Image: Tai Viinikka

The Sunshine State, perhaps unsurprisingly, ranks third in the nation in rooftop solar potential.  It ranks first among states east of the Mississippi.  And yet Florida ranks a middling 14th in the nation in solar capacity installed.  What gives?  For one thing, Florida doesn't have a renewable energy standard (RES).  RESs require utility companies to source a certain percentage of their energy portfolio from renewable sources.  More than half of states have an RES of some kind.  

Also problematic are legislative barriers to rooftop solar installation.  If you're a Florida homeowner, you are free to purchase and install solar panels on your property.  But Florida doesn't allow third parties to provide those panels for you.  Landlords, for example, can't install panels for their tenants, and third party solar providers can't absorb the up-front cost of installation in exchange for monthly payments (often less than utility bills) from a homeowner.  The only entity that can sell power in Florida is a regulated utility company.  As this map shows, that makes Florida unique, one of only four states (Georgia recently authorized third-party solar) that prohibit third party solar:

Image: DSIRE

The anti-solar climate in Florida is fostering opposition from the usual suspects, including the Southern Alliance for Clean Energy.  It's also creating a partnership between environmentalists and the Tea Party:

Debbie Dooley agrees that change is inevitable and may be coming sooner than many have expected. She is the president of the Green Tea Coalition and Conservatives for Energy Freedom, part of a growing movement among political conservatives who are advocating for solar across the country.

Bills have been awaiting passage "for years," she said, "and they have all stalled in committee. Now we are taking the message straight to the people, giving Floridians the right to decide for themselves."

Other conservatives are likewise frustrated by the rigidity of the state's solar rules:

"It is very frustrating to see how special interests affect politics," he said. "I'm a Republican solar contractor and I'm frustrated with my party in this state for taking donations that do not allow for competition and free market."

The groups are pushing for a constitutional amendment to be placed on the ballot in 2016, which would remove barriers to third party solar installation.  In response, utility companies have started their own solar campaign:

Opponents have started a committee and constitutional amendment of their own: Consumers for Smart Solar, which aims to protect the existing rules around solar power. The Florida Chamber of Commerce — whose board of directors includes executives from five power companies — is a supporter.

Utilities are right to point out that regulation is needed in the energy sector to ensure that energy provision and consumption is safe and reliable.  But there's likely a less extreme option available to the legislature than a blanket prohibition on third party solar.  We'll find out in November 2016 if Florida voters agree.

Lives even more temporary than our own

“We who choose to surround ourselves with lives even more temporary than our own, live within a fragile circle, easily and often breached. Unable to accept its awful gaps, we still would live no other way. We cherish memory as the only certain immortality, never fully understanding the necessary plan.”

– Irving Townsend   (h/t Andrew Sullivan)

Nicaragua releases and approves Nicaragua Canal environmental assessment

Image: ERM

It took a while, but the government of Nicaragua finally released the Environmental and Social Impact Assessment (ESIA) for the proposed Nicaragua Canal megaproject.  It can be downloaded here.  The ESIA was handed over to the government back in early June, a few months after a group of us reviewed parts of the environmental studies at FIU in March.  It wasn't clear why the government was waiting so long to release the ESIA, though back in September the government announced that construction would be delayed in order to conduct further studies of the project.  It's not clear if those studies will still take place, as the government has approved the ESIA and allowed HKND (the company building the canal) to start construction:

Canal commission representative Manuel Coronel Kautz said the commission's decision authorizes China's HKND Company to start structural and construction design work [...] The canal, scheduled for completion in December 2019, will cut across the middle of the country and bisect Lake Nicaragua, known locally as Lake Colcibolca — the second-largest lake in Latin America and the largest drinking-water reservoir in the region. The canal will also cut through the Cerro Silva Nature Reserve.

One thing that's clear from the ESIA (developed by consulting firm ERM) is that while a net positive impact on the environment and local communities is possible, it remains an unlikely outcome under current planning scenarios:

The report says “the government would be wise to consider engaging with international development agencies such as the World Bank or the Inter-American Development Bank,” to avoid damage in sensitive areas like the Mesoamerican Biological Corridor, the Indio Maíz Biological Reserve, the San Juan River, Lake Cocibolca and surrounding nature reserves.

“The study says that in normal situations, these areas would generally be considered untouchable due to their social and ecological fragility,” López noted.

ERM says that if further studies are not conducted and “mitigation and offset measures” are not successfully implemented, “biodiversity impacts would be significantly worse than described.”

It recommended further studies to identify seismic risks posed by construction of the canal; gauge the impact of dredging in the lake; identify the threats from the introduction of saltwater into the lake; and assess the risk of a reduction of the outflow of water from the lake to the San Juan River.

It also concludes that without the implementation by HKND and the government of the environmental and social mitigation measures recommended in the report, not even Route 4 – the one that was selected and the only one considered viable – would have the positive net impact for the environment that could justify construction of the canal.

The American West is Diversifying its Energy Portfolio

Image: ACORE

The American Council on Renewable Energy's 2015 report on western energy markets makes a convincing case that states in the American West are increasingly reliant on renewable energy sources.  Per the graphic shown above, the 13 western states accounted for half of the nation's installed renewable energy capacity, and half of the nation's private sector investments in renewable energy.  One factor driving the growth is the West's sheer size and renewable energy potential - the 13 western states encompass half the land area of the United States, including major river systems like the Colorado, Columbia, and Missouri, mountain ranges like the Rockies and Sierra Nevada, rainforests, volcanoes, deserts, and the Pacific coast.  The region is undeniably blessed with natural resources.

But the ACORE report also cites connectivity and inter-dependence as a major driving force behind energy diversification in the American West:

It is increasingly evident that the electric grids of western states are interdependent and complementary. To take fullest advantage of renewable supplies, fully utilize existing transmission infrastructure and manage costs to ratepayers, grid operators and regulators are looking to move towards an integrated western grid. 

Energy generation is only one side of the 'energy holy grail.'  The other is energy storage and delivery, where the energy industry would like to see more integration:

“We don’t want to do this necessarily the same way we did solar policy, where every single state in the nation has a different framework,” said Madeleine Klein of SoCore, a solar developer owned by Edison International [...]  For solar developers to operate in 50 states, Klein said, they have to navigate 50 different markets, with 50 different sets of regulations.  “We want to try to avoid that for storage, so that you’re looking at effectively the same market structure regardless of whether you’re looking at a northeast project or a southwest project.

It looks like the western states are moving towards an integrated energy framework.  The Energy Imbalance Market (EIM) aims to share renewable energy across state lines to accommodate for fluctuations in renewable energy generation and demand.  Several major utilities in California, Oregon, Washington, and Utah are already participating in the EIM, and others in Idaho and Nevada are thinking about joining up as well.  This integration might even prompt the western states to develop a regional compliance plan under the Environmental Protection Agency's Clean Power Plan requirements:

There are strong incentives for states throughout the western interconnection to cooperate on resource planning, transmission infrastructure, and development of a common emissions trading infrastructure. A regional plan would likely be more cost effective and enable states to access higher-impact and lower-cost carbon reductions in other states.

There's no question that a transition to renewable energies will be challenging (Bill Gates recently said it would take a miracle), and it will be interesting to see how the American West, with its vast natural resources and great distances between population centers, addresses the demands of energy generation, storage, and delivery.  

Keystone XL and the COP 21 Deadline, Ctd

That was fast.  President Obama announced today that his administration would not be approving TransCanada's proposal to build the Keystone XL pipeline.  The decision came two days after the administration denied TransCanada's request to delay a final decision.  And on Wednesday I wrote:

If the pipeline were rejected before the COP 21 negotiations, it would further cement the feeling (shared by myself and others) that the Keystone XL fight is largely a symbolic one [...] Admittedly it's hard to quantify the extent to which a rejection of Keystone XL would bolster the US position on climate change during COP 21 negotiations, but if the administration is looking to maximize its leverage with other countries, a decision on the pipeline would be a bold move.  

President Obama appears to share those views.  On the symbolic nature of the Keystone XL fight:

“This pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane to climate disaster proclaimed by others”

The President was also forthcoming about the influence that COP 21 had on his decision:

Obama said the Keystone decision was important ahead of the summit to reinforce the United States’ global leadership and commitment to combating climate change. “Approving this project would have undercut that global leadership,” Obama said. “If we want to protect the worst effects of climate change before it’s too late, the time to act is now.”

The NYT also points out that US-Canada relations may have played a large role in the timing of the decision:

The recent election of a new Canadian prime minister, Justin Trudeau, may also have influenced Mr. Obama’s decision. Mr. Trudeau’s predecessor, Stephen Harper, had pushed the issue as a top priority in the relationship between the United States and Canada, personally urging Mr. Obama to approve the project. Blocking the project during the Harper administration would have bruised ties with a crucial ally. While Mr. Trudeau also supports construction of the Keystone pipeline, he has not made the issue central to Canada’s relationship with the United States, and has criticized Mr. Harper for presenting Canada’s position as an ultimatum, while not taking substantial action on climate change related to the oil sands.

Here's the full announcement:

Keystone XL and the COP 21 Deadline

A pumping station on the (existing) Keystone Pipeline System, Nebraska.  Photo: Shannon Ramos.

The proposed Keystone XL pipeline is in the news again this week, after the pipeline company (TransCanada) requested that the US State Department delay its decision to approve or reject the project.  Ostensibly TransCanada made the request on the grounds that there are outstanding siting issues to work out in Nebraska, but the more likely reason is that the company fears the Obama administration will soon issue its rejection, possibly in the run-up to the COP 21 climate negotiations in Paris.  The administration will be trying to obtain as many concrete climate commitments from other nations as possible, and a rejection of the Keystone XL pipeline would send a strong message that the US is committed to the COP 21 process.  A delay, on the other hand, would likely push the decision onto the next president (many of whom have declared support for the project).  Today the State Department announced it would not grant TransCanada's request, and suggested that a decision will be made before the president leaves office.

If the pipeline were rejected before the COP 21 negotiations, it would further cement the feeling (shared by myself and others) that the Keystone XL fight is largely a symbolic one.  Supporters trump up the job-making potential of the pipeline, but those hopes are overblown ("between 35 and millions," according to Jon Stewart), and most jobs would be short-term construction positions.  On the other hand, approving the pipeline isn't likely to be the apocalyptic death to the climate system some project, largely because the oil can find its way to global markets by other means (one pipeline being proposed would take tar sands oil from Alberta to the Pacific Ocean, across sensitive wilderness areas and First Nations lands).  

That's not to say the symbolic fight doesn't matter.  Landmark victories have been hard to come by for the environmental movement in recent years, especially when it comes to climate change.  Demonstrating the ability to defeat a large energy project supported by the oil and gas industry and many Congressional politicians would be a monumental achievement and might catalyze other organized campaigns.  And doing so at the moment when the US is trying to show leadership during COP 21 climate negotiations would amplify the impacts of that achievement.  So while rejecting the pipeline project itself may not have a significant impact on GHG emissions directly, it may have a very significant impact indirectly. 

Ultimately that may be the most relevant long-term outcome of the Keystone XL fight.  Even if the pipeline is rejected, TransCanada can resubmit its application when the next administration takes office (the costs of going through the permitting process and NEPA review are significant but not insurmountable, and there are few legal obstacles that would prevent the company from resubmitting some variation of the initial proposal).  And while many are focused on the political influences on the pipeline's destiny, the global price for oil may be just as, if not more, influential.  If oil prices stay low, new investments in oil and gas are unlikely even if Keystone XL is approved.  If prices rise TransCanada can try its luck again with the next president.  Admittedly it's hard to quantify the extent to which a rejection of Keystone XL would bolster the US position on climate change during COP 21 negotiations, but if the administration is looking to maximize its leverage with other countries, a decision on the pipeline would be a bold move.  

COP 21: Measuring Progress After Paris

I argued in this post earlier this month that the upcoming Paris Agreement climate change negotiations will require parties to confront two simultaneous dynamics.  On the one hand, the strategy of allowing each country to determine their climate change mitigation benchmarks (Intended Nationally Determined Contributions or INDCs) has been successful in fostering participation in the Paris Agreement framework, particularly among developing countries who might have scoffed at multilaterally-created mitigation rules and norms.  On the other hand, we know that the combined impact of the INDCs (and at this point most have been submitted) is not enough to meaningfully combat climate change.

This aggregate shortcoming will force negotiators to consider how INDCs should evolve across time.  Clearly a static commitment to, for example, reduce GHG emissions by 22% by 2030 (in the case of Mexico's INDC) would expire in 2030, and may prove woefully inadequate as climate science provides more feedback on the relationship between GHGs and the climate system.  So at what point would these INDCs need to be revised, and with what criteria should revised INDCs be evaluated?

One proposal being floated around suggests a five-year submission and evaluation cycle in which countries must progressively submit more ambitious INDCs than the previous five-year commitment.  Something like the following:

Five year intervals probably strike the right balance between the need to re-evaluate mitigation actions and the political capital required to address the issue on a periodic basis.  What is lacking from this proposal though, is any kind of stick that would complement the carrot of determining mitigation commitments nationally.  The INDCs appear to be a good model if securing broad-based participation is your objective, but so far the approach isn't doing enough to reduce climate impacts.  There is a risk that the Paris Agreement - by endorsing the INDC approach and cementing it as the global climate paradigm - will perpetuate an inadequate global response.  

A 5-year INDC cycle might rest on the hope that the momentum created by the INDCs does enough to make countries address their own emissions that they recognize and pursue the benefits of a climate friendly agenda on their own, and step up their mitigation efforts out of self-interest.  It's a plausible, if tenuous, path to success.

California passes bills to regulate marijuana cultivation

California Governor Jerry Brown.  Image: Ohad Ben-Yoseph.

Medical marijuana has been legal in California since 1996, when the state passed Proposition 215 establishing the Compassionate Use Act.  It took almost 20 years, but legislators finally took steps to create regulations for the marijuana industry.  Over the weekend three bills - AB 243, AB 266, and SB 643 - were signed into law by Governor Jerry Brown.  Of these, AB 243 is the most significant in my view, as it finally creates a regulatory framework for marijuana cultivation, the first step in the supply chain that is often overlooked.  The bill would empower several agencies, including the Department of Food and Agriculture, the Department of Fish and Wildlife, and the State Water Resources Control Board, to develop regulations that would minimize the environmental impacts of marijuana cultivation while encouraging farmers to participate in the regulatory process instead of remaining in the shadows.

That last part is important - by some counts there are around 50,000 marijuana farms in California, and many of them are adept at clandestine agriculture.  Alissa Walker, writing for Gizmodo, wrote a really nice article this week pushing back on the "weed is sucking rivers dry" narrative.  It's worth a read.  She also quotes me saying that the job isn't done yet: regulators still have to develop the regulations and get farmers to participate:

[T]here’s another risk for suddenly applying regulations to what has thrived as an essentially black market industry for decades, according to a study by Ryan Stoa, a Senior Scholar at Florida International University who specializes in environmental and natural resources law.

He spent the last few months interviewing cultivators and scientists throughout the Emerald Triangle and believes that some regulatory water rights issues still need to be worked out—especially because so much of the state’s meager rain falls in those northern counties where pot cultivation is expanding. “If you take a really heavy-handed approach to regulation, people will stay on the black market,” he says. “Regulators need to find that delicate balance between regulations that protect the environment while providing incentives for farmers to participate.”

It will be fascinating to watch California set up these environmentally-conscious cultivation regulations.  Even states that have legalized recreational marijuana use (like Colorado or Washington) have done very little to address cultivation, much less the environmental impacts of it.  California, it seems, is giving it a shot.

COP 21: The "Non-Paper"

The Eiffel Tower in Paris, France, seen through smog pollution.  Photo: Olya Sanakoev

From November 30 to Dec 11 member states of the United Nations will convene in Paris in the hopes of coming away with a meaningful global agreement to reduce greenhouse gas emissions and stem the tide of climate change.  The 21st Conference of the Parties to the UN Framework Convention on Climate Change (known more simply as "COP 21") is shaping up to be a historic event, for better or worse, in part because so much is riding on the agreement.  There are myriad statistics and evidence that climate change impacts will affect virtually everyone on the planet, some at very high cost.  

Recognizing this, most parties have already made commitments to the Paris Agreement in the form of "Intended Nationally Determined Contributions" (INDCs).  The INDCs represent each country's commitment in terms of GHG emissions reductions.  The United States, for example, has pledged to reduce its emissions by 26% by 2025 (using 2005 as the baseline year).  So far 119 countries have submitted their INDCs, including all industrialized nations, Brazil, China, India, Indonesia, Russia, and South Africa.  There aren't many big players left who haven't made a commitment yet, which is a good sign.  On the other hand, it's unlikely that the combined commitments are enough to meaningfully combat climate change:

It has been calculated that these INDCs would still mean a planetary warming of 3 degrees C above pre-industrial levels, overshooting an international commitment by one degree.

A recent study by Stern and others also shows that the reduction pledges from the US, European Union, and China – who together account for 45% of global emissions – will miss by almost double the 2030 target of 35 gigatons of CO2e emissions.

Last week I attended a Climate Reality workshop with former Vice President Al Gore, who admitted that when he first heard that countries would be able to come up with their own GHG emissions reductions targets, he thought it was a terrible idea.  But he's since reconsidered, in part because it appears that the freedom and ownership countries have to determine their own INDCs has fostered meaningful participation in the COP 21 process.  I tend to agree, though the text of the agreement itself may still play a large role in determining how well these INDCs (and future actions) combat climate change.

This week the Paris Agreement "Non-Paper" (known more colloquially as "the first draft") was released to the public.  It has been reduced from 80 pages to 20, and naturally, some important material has been left out:

“[This] new text has left out a significant piece of the climate change solution puzzle: forests. The land-use sector accounts for about 10 percent of annual global emissions,” said Gustavo Silva-Chávez, Program Manager for the Forest Trends’  Expenditures Tracking Initiative (REDDX).

Another important sector not directly addressed in the non-paper?  Energy.  And an ambitious requirement that 100% of the world's energy be provided by renewable energy by 2050 was also removed.  Of course, since this is the first draft and negotiations have scarcely begun, the key operational elements of the text have not been resolved either.  The difference between "shall" and "should," for example, is fairly significant.  Here's a snippet of the text:

The full text of the non-paper can be viewed here.  I will be following and attending the COP 21 negotiations.  Stay tuned.

Nicaragua releases executive summary of Canal Environmental Impact Assessment

Proposed route of Nicaragua Canal.  Image: ERM.

While we're still waiting for the full Environmental-Social Impact Assessment (ESIA) for the Nicaragua Canal to be released, the government of Nicaragua released the Executive Summary of the ESIA yesterday.  It can be viewed here.   The consulting firm that put the ESIA together is optimistic that the impacts can be mitigated (and even offset to a degree that the overall impact is positive on both the environment and human communities), but the cautionary tone of their conclusions is telling:

[The Project] is fraught with risks.  If the Project is not constructed in accordance with international good practice and the proposed mitigation measures are not properly implemented; or if the Project's business case is not realized and the predicted longer term indirect and induced benefits from the Project do not occur; or if the construction of the canal is not completed, Nicaragua may be worse off than doing nothing.

In summary, the Project does offer potential benefits to the environment and people of Nicaragua, but only if its business case is robust, the financing to complete construction is secure, and the Project is constructed and operated to international standards (i.e., recommended mitigation measures are fully implemented).

In other words, it might be possible to construct and operate the canal in a way that provides net benefits to the Nicaraguan people and their environment, but it's not going to be easy.  

Nicaragua Canal construction pushed back due to environmental concerns

Ometepe, an island in Lake Nicaragua, lies just north of the proposed canal route.  Photo: David Armstrong.

Last March I helped organize an independent panel review of the environmental impact assessment for the proposed Nicaragua Canal.  Our conclusions were made public, but the government of Nicaragua has yet to release the impact assessment.  Circle of Blue wrote a follow-up piece I posted on the blog in June (see here), and last month the Wall Street Journal questioned the economic feasibility of the mega-project:

It’s hard to make an economic case for a Nicaragua canal. Nicaragua originally estimated the cost of the 172-mile waterway at $40 billion and now it’s $50 billion. Panama Canal Authority CEO Jorge Quijano told me last summer that he estimates the project will cost more like $67 billion-$70 billion.

Extra-large container ships bring goods from Asia to West Coast ports in the U.S., where the cargo is unloaded and moved by railroads and trucks to the American heartland. But Asian cargo ships that transit the Panama Canal for the Eastern Seaboard make multiple ports of call, from Halifax to Miami and the Gulf Coast. Many of these ports cannot accommodate the largest container ships anyway, so the demand for taking them through the canal is not there. 

HKND hired a British firm, Environmental Resources Management (ERM), to study the social and ecological effects of the Nicaragua canal.   In March an independent review panel, organized by Florida International University’s Southeastern Environmental Research Center and College of Law, viewed draft copies of some sections of the report. The panel concluded that the study was done too quickly to be thorough and that ERM was not given sufficient data about the construction plan. In its response ERM agreed that the study schedule was “aggressive” and that “the lack of a final feasibility study hampered” the analysis.

There has been some skepticism among the review panel that the government would seriously consider the environmental impact assessment or our feedback, but this week the canal commissioner announced that construction would be pushed back in order to conduct the studies we've been calling for:

Paul Oquist, executive director of the government’s canal commission, said that four additional studies to identify new mitigation requirements had been recommended by UK-based Environmental Resources Management, one of the canal’s environmental assessment contractors.

“We and (Nicaragua president Daniel Ortega) have made the decision that all studies recommended by the environmental groups have to be undertaken,” Oquist said yesterday in Washington, DC at a forum sponsored by the Council of the Americas, according to IHS Maritime 360.  Oquist added: “No stone will be left unturned in terms of the environmental elements.”

The surprise announcement will be welcomed by scientists who have criticised the quality of ERM’s work in compiling the environmental impact study.

The environmental impact assessment, as far as I can tell, remains classified.  Still, that the government appears to be taking our concerns seriously is a promising sign that environmental impacts will be mitigated.  Or, as one of my colleagues pointed out, "additional studies" may be nothing more than a convenient excuse to buy time to find more investors.

Energy Firms Move Into Cuba

Image: Jorge R. Pinon, 2012.

Back in May I predicted that, with the warming of US-Cuba relations, energy companies would start lining up for a chance to explore Cuba's potentially lucrative offshore oil and gas reserves.  Firms have been showing interest, but perhaps not as enthusiastically as some (including myself) predicted.  French energy giant Total allegedly struck a deal with the Cuban government, but later denied the claims.  Since then energy firms from Angola and Australia have signed deals to explore and potentially exploit offshore oil reserves.  

So far these oil and gas deals have been limited, in part because Cuba has retained certain nationalization requirements for foreign companies.  It also appears that the absence of US energy firms, due to the ongoing embargo, removes some of the industry's biggest players from the market.  The embargo's conditions also limit the extent to which foreign firms can use American equipment and technologies, and this might significantly increase the risk of environmental damage.  

[Former EPA Administrator William Reilly] noted that Cuba's expertise lies with drilling in shallow waters. U.S. drilling equipment and technology is widely regarded as the best and safest in the world, he said, and American companies might highlight that expertise in a push for access to Cuba.  “The companies could well make the case — and I would help them make the case — that it would advance the safety of Florida and the environment and the Gulf if American companies ...were doing the drilling in Cuba,” Reilly said. “There ought to be a blanket exemption for anything relating to spill control.”

The "blanket exemption" refers to the requirement that US companies obtain a special license from the federal government to conduct oil spill clean-up activities in Cuban waters.  At present there are too few licenses to ensure that a spill would be effectively contained before hitting the coast of Florida.  According to one estimate, less than 5 percent of the equipment, vessels, and services used to clean up the Deepwater Horizon spill would be legally available to respond in Cuban waters.  Whether French, Angolan, or Australian energy firms are compliant with embargo terms or not, the US remains unprepared to unleash the full force of oil spill clean up capacities.  

It is unclear when these companies will actually start extracting oil and gas.  Cuba claims production could begin in 2016 with the lifting of the embargo.  US energy heavyweights are taking notice, and some included Cuba in their lobbying disclosure statements:

Shell Oil Company, the U.S.-based subsidiary of Royal Dutch Shell, reported spending almost $2.5 million from April through June lobbying the federal government on a laundry list of topics—including issues related to Cuba sanctions, disclosure reports show. Chevron U.S.A. Inc. reported shelling out almost $2.2 million to influence the federal government on issues including the “lifting of Cuba sanctions.” Meanwhile, Halliburton spent $100,000 plugging multiple matters, including “Cuba status,” the disclosures show.

In October a high-level meeting will take place in Havana in order to "work on establishing uniform environmental and safety policies for offshore drilling throughout the Gulf of Mexico and the Caribbean Sea."  While safety and the environment will be on the agenda, industry reps will surely be keen to discuss the lifting of the embargo in order to facilitate the involvement of US firms.  And while that may be a worthy topic, US representatives would do well to prioritize the easing of restrictions to licensing requirements that impede oil spill recovery efforts.