The European Union ("EU") is coming closer to adopting mandatory rules for companies that use carbon credits.
- First, the European Parliament and Council are considering for adoption a Commission for a Regulation on a Carbon Removal Certification Framework ("CRCF Regulation Proposal").
- Second, the European Commission ("Commission") is in the process of adopting standards (the so-called "ESRS") for the EU's mandatory ESG reporting regime—the Corporate Sustainability Reporting Directive ("CSRD")—that will also cover disclosures on companies' use of carbon credits (including as emission offsets) and their quality.
These two regulatory initiatives are closely tied to each other. In effect, the draft ESRS that the Commission is considering for adoption require subject entities to disclose GHG removals and GHG mitigation projects financed through carbon credits.
The EU's aim of regulating carbon credits coincides with its push for carbon neutrality by 2050, and a related significant proliferation of companies publicly committing to achieve "net-zero" emissions by mid-century, which has triggered an uptick in strategic purchases of carbon credits in the voluntary carbon market ("VCM").The CRCF Regulation Proposal and the upcoming ESRS will help to expand sustainable and verified carbon removals and encourage investment in technological innovation.
Companies turning to the VCM to reach their net zero goals, and others active in the generation, trading, and use of carbon credits, will want to follow these initiatives closely. Opportunities remain for companies to express views that may shape the final contours of these regulations.
We discuss these developments and opportunities for public comment below.
Regulation for a Carbon Removal Certification Framework
The European Parliament and Council are currently considering for adoption the CRCF Regulation Proposal that the Commission presented in late November 2022.建议书载有规则监测、报告并验证欧盟/EEA内部发生的碳清除的真实性实际中,拟议方案仅用于EU/EEA中的碳清除。
CCRC规程基于四大质量标准(载运QU.A.L.ITYmniker):- 设置量化、额外性和长期存储需求,产品必须符合这些需求才能认证;
- 要求认证方法符合这些需求并授权委员会制定方法学and
- requires companies to subject their certification to independent third-party verification through a certification scheme.
- First, companies must disclose GHG removals and storage from their own operations and their upstream and downstream value chain, and report the underlying calculation assumptions and methodologies!and
- Second, and most important for carbon credits and the VCM, companies must disclose the amount of GHG emission reductions or removals (in metric tonnes of CO2eq) from climate change mitigation projects that financed through any purchase of carbon credits.
- Companies relying on carbon credits for achieving any net-zero targets explain the credibility and integrity of the carbon credits used, and whether and how its claims of GHG neutrality neither impede nor reduce the achievement of its GHG emission reduction targets;
- Companies consider recognized quality standards for preparing information on carbon credits, verifiable by independent third parties, to make public reports, and to provide rules for calculation, monitoring, and verification of the project's GHG emissions;
- Companies disclose information on carbon credits with a breakdown of the following items (see AG 66 for the tabular format in which companies are suggested to present information on carbon credits):
- the share (percentage volume) of reduction projects and removal projects;
- the share (percentage volume) of each recognized quality standard;
- the share (percentage volume) issued from projects in the EU!
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- >
- 和
- >/carbon清除不影响温室气体排减量努力(ESRSE1建议约90-95%温室气体排减量应来自公司自身的企业排减量)。
The draft ESRS E-1 does not reference the CRCF Regulation Proposal, but it requires companies to "apply consensus methods on accounting for GHG removals as soon as they are available." This fits with the Commission's purpose for the regulation of the certification of carbon removals—namely to increase transparency, credibility, and integrity around companies' actions to permanently remove GHG from the atmosphere.
Next Steps
The Commission is set to adopt the draft ESRS as delegated acts by mid-2023. On November 23, 2022, EFRAG sent its draft ESRS to the Commission. Once adopted, the European Parliament and Council have two months to present any objections.之后ESRS将成为强制标准,公司必须报告各种ESG影响(见
委员会拟议的CRCF监管建议草案目前
Thus, the CRCF Regulation Proposal would require carbon credit project developers and potential users to conduct their own assessment of the carbon removal in accordance with the "QU.A.L.ITY" principles and the methodologies prepared by the Commission and then submit that assessment for independent verification through a certification scheme.
The CRCF Regulation Proposal requires certification schemes to be recognized by the Commission. All service providers of certification schemes must submit annual records of their activities to the Commission, and communicate any attempted fraud they identify. Moreover, certification schemes may only use accredited third-party certification bodies to verify project developers' and users' carbon removal assessments. These certification bodies may only be accredited by national accreditation bodies in the EU Member States. Hence, the CRCF Regulation Proposal creates a system of accreditation similar to that of notified bodies under the EU product rules.
At this stage, it is not yet clear how carbon offsets created through carbon removal projects applying the methodologies and certificate schemes set forth under the CRCF Regulation Proposal may serve as an alternative mechanism to meet the EU's GHG emissions reduction targets.根据欧盟委员会对CRCF监管建议的解释性备忘录,部分欧盟排放交易系统(EU-ETS)收入指向创新基金,它帮助企业投资创新清洁技术 — — 包括碳清除 。 CRCF监管建议与推向创新建议相匹配。 然而,看来CRCF监管建议下的碳清除不易交易或服务于EU-ETS下的目的。
此外,欧盟碳清除监管努力显然与全球开发相关联。值得一提的是,2023年1月会议中,国际可持续性标准委员会确认,拟议的s/www.ifrs.org/content/dam/ifrs/meetings/2023/jansb/sb/ap4-climateISSB是国际财务报告标准基金会(IFRS)二大标准设置板之一,并负责开发IFRS可持续性披露标准草案S2要求公司披露实现公司净零目标所必要的碳抵消数,包括用户理解实体拟使用抵消的可靠性和完整性所需某些因素A carbon removal activity's compliance with the CRCF Regulation Proposal (once adopted) would likely be an important marker of credibility and integrity.Interaction with the EU's Mandatory Carbon Credit Reporting Regime for Companies under CSRD
The draft ESRS standards that that the Commission is currently considering also include ESRS E1 on Climate Change ("ESRS E1"), which proposes a set of mandatory climate disclosures for many companies. The ESRS E1 contains two principal disclosure requirements for companies with respect to their GHG removals and GHG mitigation projects that are financed through carbon credits:
In addition, the ESRS E1 also requires that:
The Greenhouse Gas Protocol ("GHG Protocol" or "Protocol")—a leading standard setter for measuring and managing corporate greenhouse gas emissions, borne of a partnership between World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD)—has opened stakeholder surveys concerning the revision of its Corporate Accounting and Reporting Standard, Guidance on Scope 2 Emissions, and the Scope 3 Standard and Scope 3 Calculation Guidance.
The GHG Protocol's standards and guidance are a foundational element of the Science Based Targets initiative (SBTi), which helps shape and verify corporate emissions reductions targets and ensure they are aligned with the goals of the 2015 Paris Agreement.协议是大企业首选碳核算机制:2016年92%以上Fortune500公司向CDP报告排放数据时,根据Hgorm协议会计标准这样做。万博体育app手机登录自2004年以来公司会计报告标准从未修订过,范围2排放指南-即自2010年代初首次发布以来与公司电热三维排放相关联的排放量从未修订过。
i2022年3月宣布利害关系方调查过程时,《温室气体议定书》宣布,“关键焦点将是通过重大披露举措确保与正在开发的核算规则相统一和一致..信息披露创举多多样,跨行业和司法权限,但关键共性在于依赖温室气体协议当前框架 。
,例如,美国证券交易委员会s/www.cov.com/en/news-and-inights/inights/2022/03/sec-proposes-landmark-climate-证交会在其提案中明确纳入并采纳了由《温室气体协议》开发的许多概念。
II万博体育app手机登录可再生能源证书作用2范围发布指南
A万博体育app手机登录RECs当前在2范围报告
Hrefss/default/files/Scope%2020Guidance_Final_Sept26.pdf>>当前2范围指导 (发布于2015年)为实体报告2范围排放量框架-即购买电耗、蒸气、热和冷却间接排放当前,实体可以通过定位法(基于实体地理区域平均产生能源排放量)或市场法(基于实体购买RECs的具体生成器排放物)报告CLE2排放量。
RECs是再生电源发布并出售给其他实体的工具,这些实体可能与直接购买电力合同捆绑或不可包绑万博体育app手机登录当前指南解释RECs销售传递可再生能源需求信号,这些信号驱动生产变化万博体育app手机登录RECs设计创建需求端市场信号,当前指南不要求实体证明RECs额外性也就是说,实体无需证明将排减纳入REC兆瓦本不会实现万博体育app手机登录数个其他报告机制,如英国绿楼理事会净零碳建框架,包含 这一额外性需求协议正考虑改变RECs
A部分修改中,协议似乎在重新评估是否和如何计算RECs协议2022年3月公告宣布由Anders Bjorn研究范围2,夏季Bjorn 二大建议 For each of these fifteen categories, the Guidance prescribes a time boundary to account for all emissions related to the entity's activities in the reporting year, even if those emissions occurred in a prior year or are expected to occur in a future year.万博体育app手机登录计算指南还就每一类别规定了一套专用计算排放法。万博体育app手机登录举例说,购买商品和服务产生的排放可用供应商专用法报告(有特定供应商提供的数据)、混合法报告(有某些供应商提供的数据和二级信息补缺)、平均数据法报告(有货物质量和平均排放因子数据)或开支法报告(有货物经济值和平均排放因子数据) C拟议的改变将显著效果报告2排放
Upstream Downstream emissions from purchased goods and services downstream transportation and distribution capital goods processing of sold products fuel- and energy-related activities (not included in scope 1 or scope 2) use of sold products upstream transportation and distribution end-of-life treatment of sold products waste generated in operations downstream leased assets business travel franchises employee commuting investments upstream leased assets IVsites/default/files/mocket-bases%20Survey%20Memo.pdf如上所述,基于市场的核算方法涉及使用合同工具或抵减信用量测量排放量性能,而《温室气体议定书》允许这些方法处理范围2排放问题。万博体育app手机登录然而,当前指南不包括基于市场报告直接(范围1)或供应链排放(范围3)的计算方法这份调查请求利害相关方反馈各种市场化计算方法-包括抵减信用额、嵌套信用额、供销棚/价值链干预、批量平衡认证和书籍填报证书-可能应用到范围1和3排放报告上。
V万博体育app手机登录公司应该从此难得机会生成碳规则
The Fifth Circuit recently allowed the federal government to resume use of the "social cost of carbon" (SCC), after a district court enjoined reliance on the metric earlier this year. The SCC aids cost-benefit analysis of regulatory actions and can provide insights into the impacts of climate change and greenhouse gas emissions reductions. The continued legal back and forth over the SCC demonstrates that it is a highly contested and important concept, supporting much of President Biden's climate agenda and with potential spillover effects for corporate carbon pricing.
Background
The legal battles directly stem from an Executive Order President Biden issued on his first day in office, but continue a dispute that began in the last two presidential administrations.Executive Order 13990 re-established an Interagency Working Group (IWG)!指令发布SCC临时估计sCC使用并指令IWG继续开发SCC定值,原定于今年1月发布。 SCC定序部分本身响应Trump政府的行动,解散IWG并指令使用SCC估计值远低于Obama政府In February 2021, the Biden IWG issued the interim SCC, which returned to the Obama-era estimates as follows:
Source: Interagency Working Group on Social Cost of Greenhouse Gases
Litigation over the Biden SCC estimates and effects on the Federal Government
A host of state attorneys general immediately challenged the interim SCC in two separate lawsuits in Louisiana and Missouri. Among other claims, these suits alleged the interim SCC failed to comply with the Administrative Procedure Act's notice-and-comment requirements, was arbitrary and capricious, and otherwise was enacted without statutory authorization.[1] In February, a District Court Judge in the Western District of Louisiana hearing one of these challenges issued a preliminary injunction, prohibiting agencies from "adopting, employing, treating as binding, or relying upon" any SCC estimates that depart from those used in the Trump Administration.
This opinion immediately reverberated across the federal government. In a motion to stay the injunction pending further appeal, the Justice Department wrote:
The consequences of the injunction are dramatic. Pending rule-makings in separate agencies throughout the government—none of which were actually challenged here—will now be delayed. Other agency actions may now be abandoned due to an inability to redo related environmental analyses in time to meet mandatory deadlines.[2]
In light of this injunction, a host of federal rulemakings, grants, and agency processes were delayed, including federal oil and gas leasing and grants made under a $2.3 billion program for capital-intensive transportation projects. In court filings, the Justice Department further catalogued how the injunction was derailing federal operations dealing with climate change. A declaration filed by a high ranking Office of Management and Budget (OMB) official documented disruptions to at least 21 rulemakings by the Department of Energy, 5 by Environmental Protection Agency, 9 by the Department of Transportation, and 3 by the Department of the Interior.[3] The injunction would have forced the Transportation and Interior Departments to redo 60 and 27 environmental impact analyses, respectively.
Apart from its impact on agency rulemaking, the injunction threatened to implicate the White House's international climate efforts. For instance, the United States engages in regular conversations with the Canadian government to align SCC measurements across borders.[4] Multilateral discussions with the Asian Development Bank may also be affected, as its energy policy reviews often incorporate references to SCC measures.[5] The Justice Department argued the injunction would impede this international cooperation.
On March 16th, the Fifth Circuit stayed the injunction pending appeal. The Court primarily rested its decision on Plaintiff's lack of standing, noting the states' injuries are "merely hypothetical."[6] Even if an agency did consider the SCC, it would only be one factor agencies consider "in determining when, what, and how to regulate or take agency action"[7] The Fifth Circuit also considered the breadth of the impacts on government activities caused by the lower court's sweeping injunction.[8]
The SCC moving forward
The IWG will now continue its work as litigation challenging the SCC continues. This includes the Louisiana proceeding and the Fifth Circuit's stay, as well as a pending 8th Circuit appeal of a Missouri district court decision, [9] which dismissed another challenge to the interim SCC for lack of both standing and ripeness.[10]
The IWG must still promulgate updated "final" SCC figures, which are expected to be higher than the interim ones based on President Obama's IWG. It is unclear when this might occur: neither the White House nor OMB has issued an official update. Prior to the injunction, however, OMB had already solicited and received detailed public comment on how to incorporate the latest peer reviewed science and economics literature into the new SCC measure.[11] Since, technical experts across federal agencies had been synthesizing and summarizing this input, with the "goal of providing updated estimates in the next couple of months."[12] Given delays caused by the litigation, it's uncertain if the Government intends to honor this timeline. Additionally, the IWG had intended to subject their updated estimates to a peer review process and, to this end, EPA had published a request to nominate experts on January 25th.[13]
The IWG's work and the final SCC will be closely watched, both by the federal government and the private sector. Under the SEC's recently proposed climate-disclosure rule, publicly registered companies that use an internal carbon price—i.e., an "estimated cost of carbon emissions used internally within an organization"—would be required to disclose the price per metric ton of carbon dioxide equivalent used, and the company's rationale for selecting that price.[14] While not bound to do so, in setting internal carbon prices some companies may reference or even adopt the IWG's estimate of the SCC. However, with the fate of the interim SCC unclear, and an array of carbon markets around the globe setting other prices on carbon, many companies may be less inclined to adopt the IWG's SCC in their internal carbon pricing.
[1] See, e.g., Complaint, Louisiana et al., v Biden et al., 21-CV-01074 (W.D.La提交日期为2021年4月22日ECF No.unfref2名称SUPDefs运动留置mm.,21-CV-01074公元前LA,2022年2月19日ECF编号103-1.
To achieve the desired economies of scale to meet the Administration's goal to transition to 100 percent CFE on a net annual basis by 2030, the Government has signaled that it is willing to combine CFE procurements across multiple agencies, and to extend contract timelines up to 10 years, where appropriate. The RFI seeks to collect the information to support the solicitation process, and, in terms of content, focuses on collecting information on retail electricity supplied CFE in identified competitive retail markets (specifically PJM, ERCOT, ISO-NE, MISO, and NYISO).[2] Respondents are encouraged to provide the following details for each market:
- proposed or recommended approach to meet the Government's CFE goals,
- annual price for retail electricity supplied CFE in a specific market for a range of supply quantities,
- baseline hourly matching percentage for the CFE supply proposed under category 1, and
- portfolio adjustments necessary to increase the percentage CFE match on an hourly (24/7) basis, as proposed under category 3.
In soliciting this information, the RFI includes a series of tables in which interested respondents are invited to insert information about projected supply, storage, and pricing of CFE, though respondents also may choose to submit information in a narrative format. The RFI also invites respondents to address their management of Renewable Energy Certificates (RECs) and other CFE accounting mechanisms, as well as the associated price of this tracking and certification process.
Interested respondents have the opportunity to submit questions about the RFI by February 25, and the deadline for responses is currently March 7, 2022.
[1] Carbon pollution-free electricity means "electrical energy produced from resources that generate no carbon emissions, including marine energy, solar, wind, hydrokinetic (including tidal, wave, current, and thermal), geothermal, hydroelectric, nuclear, renewably sourced hydrogen, and electrical energy generation from fossil resources to the extent there is active capture and storage of carbon dioxide emissions that meets EPA requirements." E.O.14057, 86 Fed.瑞格70935 ,7094213 2021.
Addressing climate change has been a priority for President Biden since his first day in office. On December 8, 2021, President Biden continued that focus by issuing Executive Order (EO) 14057, Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability, which includes a number of requirements directed at introducing sustainability to federal acquisitions.
This most recent EO announces an administration policy to achieve net-zero emissions from federal procurement by 2050 and comes on the heels of the public comment period extension to January 13, 2022 in response to EO 14030, Climate-Related Financial Risk. Although the administration will likely be rolling out additional sustainability requirements in the coming months, contractors currently have an opportunity to help shape an initial requirement that may end up effectively establishing an environmental, social, and governance or "ESG" reporting requirement.具体地说,联邦获取管理委员会正征求公众评论,以考虑修改联邦获取规则:
政府当前提案类似于机构一级最近的活动,与美国Securities and Exchange Commission ("SEC") announcing an "all-agency approach" in response to investor demand for ESG-related information. The SEC is also seeking public comment in an effort to determine whether current climate change disclosures adequately inform investors and as of December 7, 2021 has received 5,867 comments.
In light of the rapidly evolving scope, demands, and attention placed on board and management accountability for sustainable business practices, Covington's multidisciplinary ESG and Sustainability team created an ESG and Sustainability Toolkit as an entry point for analysis, understanding, and tailored advice on this wide ranging topic.
As part of an effort to reduce federal supply chain emissions, President Biden additionally ordered the General Services Administration to "track disclosure of greenhouse gas emissions, emissions reduction targets, climate risk, and other sustainability-related actions by major Federal suppliers, based on information and data collected through supplier disclosure" of greenhouse gas emissions (as discussed in consideration (i) above).
With new reporting, tracking, and emissions reduction targets potentially on the horizon, federal contractors should consider taking the opportunity to shape aspects of new requirements, such as the preferred method of tracking and reporting emissions data, including how to evaluate the social cost of such greenhouse gases. For example, there would be a number of ways to measure the "social cost" of greenhouse gas emissions, which is generally an estimate of the monetized damages associated with incremental increases in greenhouse gas emissions. As re-established under EO 13990, the Interagency Working Group on the Social Cost of Greenhouse Gases published interim estimates of the social cost of carbon, methane, and nitrous oxide in February 2021 that reflect one method for evaluating emissions data that could ultimately inform requirements imposed on contractors. Although a coalition of states is currently challenging the administration's use of social cost estimates to calculate regulatory costs and benefits under EO 13990,[1] the notice of public comment for EO 14030 still includes the social cost of greenhouse gases as one potential factor when considering greenhouse gas emissions in federal procurement decisions.
Comments may be submitted on the following questions on or before January 13, 2022 for FAR Case 2021-016 at https://www.regulations.gov/document/FAR-2021-0016-0001:
- How can greenhouse gas emissions, including the social cost of greenhouse gases, best be qualitatively and quantitatively considered in Federal procurement decisions, both domestic and overseas?
- 什么可用并受尊重方法测量所购或租产品或所服务生命周期中的温室气体排放?
- 联邦政府通过国内外采购决策可如何考虑和尽量减少与气候有关的金融风险?
- 贵组织将如何提供温室气体排放数据供建议和/或合同性能使用?
- 联邦政府应如何验证温室气体排放报告?
- 政府应如何优先接受国内外供应商的标书或建议书,以最有效实现减少温室气体排放或降低温室气体排放社会成本? 政府可如何考虑供应商承诺减少或减少温室气体排放?
- 采购决策中考虑温室气体社会成本对小企业产生什么影响? 小企业包括处境不利小企业、妇女拥有小企业、服务性残疾老企业和历史利用不足商业区小企业FAR理事会应如何最优化地将目标与确保小企业机会的努力相匹配?
As the United Nations Climate Change Conference of the Parties ("COP") in Glasgow has drawn to a close, with seemingly mixed messages and a somewhat ambiguous conclusion, it is worth reflecting on the overall trajectory of the climate issue, societal expectations, and the accomplishments that — with time — Glasgow is likely to represent. COP26 highlighted the fragility of the planet, as well as the fragility of the global consensus-based United Nations approach to protecting it. It highlighted the sweep of global climate-induced challenges and the scale of transformation needed to address them. With rising temperatures has come a rising global focus on climate and a far greater set of emerging societal expectations for meaningful responses by government and the private sector. Despite the risk that the global agreement forged in Glasgow is seen by climate activists as all talk and no action — what they referred to as "blah, blah, blah" — I believe that a number of features will endure as important accomplishments.
Representatives from 197 nations, businesses, hundreds of civil society organizations, scientists, educators, media, and climate activists — you name it — all converged on Glasgow to shine a global spotlight on the climate crisis. The Conference had some 40,000 registered participants. With just a few thousand of those involved in the negotiations themselves, the rest converged around elevating climate understanding, climate solutions, and climate action. And still tens of thousands of others converged to protest and lend their voices to the climate debate.期望因Covid-19延迟一年以及美国返回巴黎气候进程而提高但这些期望都集中在依赖实现每一项结果一致性的联合国谈判进程上 。
尽管Covid云下集合和大批与会者所构成挑战,但缔约方会议在某些方面组织得比以往更好。它不再完全是一个国际谈判,而更多地是一个通信机制,以凝聚世界对雄心气候行动需求的看法United Nations进程启动全球领导人峰会,有120位国家元首参加It featured inspiring statements from governmental and societal leaders, such as Sir David Attenborough. The Summit then flowed into the overall COP, which had a thematic organization for each day of the conference, by which it highlighted actions or the sweep and scale of climate impacts in a more coherent fashion than ever before — spanning from energy, finance, transport, cities and the built environment, science and innovation, nature, gender, youth, and adaptation to and loss and damage from climate change. And the overall gathering encapsulated a heightened global focus on climate as a defining generational issue in a way that has never happened before.
The World Rallied Around the Urgency Shown By the Evolving Climate Science
The defining element of the Glasgow considerations was the acceptance of a far sharper sense of climate science findings around the scale and urgency of emissions reductions needed to stabilize the earth's climate and prevent catastrophic consequences. Every aspect of the discussions was judged by the context the new climate science shows.
Leading up to the COP, the UN's authoritative science body, the Intergovernmental Panel on Climate Change ("IPCC"), had issued two reports — one in 2018 focused on the imperative of holding global average temperature rise to 1.5 degrees Centigrade, and one in the Summer of 2021 highlighting the "overwhelming" evidence of climate change. The reports showed that a rise in global temperature to 2 degrees would lead to catastrophic results in both the frequency and severity of climate-induced events and global changes. The reports found the science of human-induced impacts "unequivocal" and noted that global temperatures had already risen by 1.1 degrees over pre-industrial levels — demonstrating how limited the remaining carbon budget is — and that climate adverse effects were widespread, rapid, and intensifying.The report further found that urgent action is needed to cut emissions by 45% by 2030 and achieve net zero emissions by 2050 in order to maintain a sustainable trajectory.
The IPCC findings were characterized by UN Secretary General António Guterres as a "code red for humanity." They became the touchstone for judging the adequacy of country pledges and private sector net zero commitments. In addition to the scale of the emissions reductions, the need for an accelerated pace of change also became far clearer and a widely accepted expectation. The notion that we are now in a "decisive decade" to get on the right emissions trajectory was embraced by the COP process. Going into the COP, various assessments, such as from the International Energy Agency, showed that existing country emissions reduction commitments would lead to a global temperature rise of 2.8 degrees by the end of the century. Those pledges covered less than 20 per cent of the gap in emissions reductions needed to be closed by 2030 to keep a 1.5 degree path within reach. According to a number of projections, the plethora of new commitments announced at the COP would, if delivered in full, lower the rise to somewhere between 1.8 and 1.9 degrees. The UN noted that the actual nationally determined contributions ("NDCs") submitted by participating nations would result in an unsustainable global temperature rise of 2.4 degrees.
At the end of the day, the overall agreement reached by 197 countries — including new emissions reductions announcements, the move to more regular revision of national commitments, transparency requirements around that process, and the development of rules for the global carbon markets — at bottom kept alive the possibility of limiting global temperature rise to 1.5 degrees by the end of the century and essentially transformed that temperature target into the new object of the UN process.虽然1.8度和1.5度之间的差值似乎不大,但实际上它代表着减轻气候变化最大破坏性影响的实质性差值。 广泛报道的争议涉及是否逐步停用煤炭和化石燃料补贴,发展中国家是否有足够的气候资金,以及是否向受影响国家提供补偿“损耗和损害”抑制了对协议的热度。 尽管如此,正如缔约方会议主席Alok Sharma得出的结论, “我们现在可以可信地说我们已经保住1.5度。But, its pulse is weak and it will only survive if we keep our promises and translate commitments into rapid action."
Paired with these science targets was a far more prominent voice given to the moral underpinnings to the proceedings that focused on the inequity created because the most vulnerable nations to climate impacts are those who have contributed least to the emissions causing such impacts, and a palpable sense of obligation to future generations. The IPCC report drove home the concept that the COP process is not some future exercise with distant impacts, but that the delegates were poised to address an urgent crisis of the here and now.
The Paris Climate Framework Survived the Absence, and Accommodated the Return, of the United States as an Active Participant
The nations of the world remained committed to the UN Climate Framework Convention's goal of "the stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system" even in the absence of U.S.巴黎气候协议自下而上承诺框架由每个国家根据自身环境确定,体现了应对这一全球挑战的共同全球承诺,没有美国则保持稳定和适切性participation, and the reaffirmation of that framework may be one of Glasgow's greatest accomplishments.
The Paris balance had achieved a "bottom-up" system of emissions reduction commitments that flexibly accommodates the circumstances of individual countries, yet one that does not allow so much flexibility that there is no realistic hope of actually bettering the climate situation by addressing emissions mitigation, adaptation to the already locked-in effects of climate change, and assistance for climate-impacted developing nations. Paris provided a solution and a directional sense of its goals, even as it admitted that its trajectory may need to grow more stringent over time, informed by meaningful science. Glasgow refined that process with a commitment by the parties to revisit their NDCs in one year rather than five and with enhanced transparency around individual country goals and their implementation. This process preserves the possibility that the collective emissions reduction actions are calibrated to avoid the worst climatic impacts.
The durability of the Paris structure was aided, to be sure, by the promise of new technology, which could allow for countries to enhance their emission reduction commitments through cost effective wind, solar, energy efficiency, and electric vehicle technologies — technologies that were still only on the verge in Paris — making a clean energy transformation that is consistent with the Paris climate goals today seem like an attainable objective.
When the United States did return to the negotiating table, it brought with it an ambitious NDC — pledging to achieve a 50-52 percent reduction from 2005 levels in economy-wide net greenhouse gas pollution by 2030, to achieve 100 percent carbon pollution-free electricity by 2035, and net zero emissions no later than 2050. It also brought a bevy of other actions to instill more confidence in its commitment.This included leadership in assembling a global methane reduction coalition by which more than 100 countries agreed to cut emissions to tackle this highly potent short-acting greenhouse gas by 2030, a "first movers" technology coalition, as well as a series of whole-of-government financial and regulatory initiatives.
While the Biden Administration would have liked to have had its actions backed up by climate legislation, particularly power plant incentives and a range of clean energy tax credits in the reconciliation bill, it made a strong case nonetheless about the comprehensive approach it is taking to prioritizing climate outcomes across the government, whether that be in the financial sector, energy, or transportation. And the United States demonstrated ambition in its diplomacy, reaching a surprise commitment with China to work collaboratively across a range of areas to keep alive the prospects for achieving 1.5 degrees. President Biden's address to the COP was complemented by a widely praised speech by former President Obama speaking directly to youth climate activists who had taken to the streets during the COP, as well as by Congressional leadership.
The Global Focus on the Climate Crisis Puts a New Spotlight on the Importance of Business Solutions and the Business Opportunities Around Climate — Subject to Ever Greater and More Intensive Scrutiny
The first week of the COP brought a breathtaking series of collaborative public and private sector announcements to achieve carbon emissions reductions. In many ways, these commitments seem almost as significant in accomplishing a clean energy transformation as the text of the UN agreement itself.
In addition to the methane pledge, leaders from over 120 countries, representing about 90 percent of the world's forests, pledged to halt and reverse deforestation by 2030. Hundreds of financial firms, operating through the Glasgow Financial Alliance for Net Zero (GFANZ), committed over $130 trillion of private capital — representing 40 percent of global financial assets — to transforming the economy for net zero.Various combinations of development organizations and private sector capabilities identified a range of opportunities they will pursue for investments in particular developing nation economies, such as in efforts to stem coal use in South Africa. Nearly 30 national governments, joined by cities, states, major automotive manufacturers, fleet owners, and investors, signed the Glasgow Declaration on Zero-Emission Cars and Vans to end the sale of internal combustion engines by 2035 in leading markets, and by 2040 worldwide. Other transportation commitments touched on heavy duty vehicle electrification, green shipping, and enhancing the deployment of sustainable aviation fuels.
Glasgow in many ways represents a shift in focus from a governmental initiative to a recognition that the scale and pace of the energy and societal transformation and response demanded by climate change necessarily will require swift and credible action by the private sector as well. As one Chief Executive Officer put it, the concept of a "climate-advantaged" company has taken hold, where sustainability has been transformed from a "nice to have" effort being done on the side, to a vital consideration at the center of business strategy, and where such companies can benefit from a substantial value premium. As one of the UN's High Level Climate Champions put it: "Net zero has gone from extreme to mainstream."
Of course, with the proliferation of net zero pledges comes an increasing level of skepticism about the credibility of those commitments and the ability to deliver on them in the long run. In the ramp up to the COP, the IPCC focus on the more stringent and nearer term emissions reductions meant that the Science Based Targets Initiative formally revised its goals for net zero corporate commitments to align with the new 1.5 degree IPCC target and issued a new standard for evaluating company emission reduction offerings. Along these same lines, the so-called "Under 2 Coalition," representing commitments by some 60 percent of world's economy, is recasting itself as the "Net Zero Coalition."
Likewise, the UN Secretary General, at the Opening to the World Leaders Summit portion of the COP and prompted by developing nation and activist concerns over the credibility of emissions reduction commitments, characterized "a deficit of credibility and a surplus of confusion over emissions reductions and net zero targets, with different meanings and different metrics." The Secretary General therefore announced that he will "establish a Group of Experts to propose clear standards to measure and analyze net zero commitments from non-state actors." The Secretary General reiterated his intent to establish a high level group for this purpose at the conclusion of the COP as well. These will likely complement a range of emerging national financial sector and ESG transparency requirements, including the announcement of the formation of a new International Sustainability Standards Board, along with other Paris Climate Agreement provisions, particularly the new carbon market rules.
Indeed, youth activists expressed particular concern over the pace and credibility of emissions reduction commitments, stating quite simply that "we don't believe you" and urging the business community to "prove them wrong." This skepticism was heightened by the overall context of the final COP debate around the failure to honor in a timely way climate finance commitments of $100 billion per year to affected developing countries, the absence of a clear loss and damage compensation commitment, and the somewhat relaxed treatment of fossil fuels, particularly the insistence by some nations to preserve an ongoing role for coal.
Just as there will be these formal processes to help refine net zero expectations, there no doubt also will be enhanced activist group scrutiny of company pledges and climate impacts. Companies will be called to task to demonstrate what they are doing to implement their net zero commitments.This scrutiny is likely to be even more acute given the inability of the formal negotiating process to achieve a level of ambition through country NDCs that will reach the 1.5 degree target or deliver in the short term the climate finance commitments for the developing world and the credibility gap that this outcome may perpetuate. As France's former Climate Ambassador and the key architect of the Paris Climate Agreement, Laurence Tubiana, put it, "Greenwashing is the new climate denial." Climate accountability in many ways will be the new currency.
We Can Expect More Focus on Climate Commitments Going Forward
Building on the Paris accord, the agreement follows the pattern of existing domestic environmental laws in recognizing that it may not be a perfect solution, in and of itself, and that the science will continue to evolve.But those frameworks recognize that it is critical to get started on the emissions reduction process even if the target may be revised in the future. Similar to the Clean Air Act's five year review provision for fundamental health-based pollutants, Glasgow acknowledges the need to calibrate future emissions reductions based on new science more frequently and with greater transparency to assess the success of country measures in meeting the emissions targets, and that there is a fierce urgency of the now being expressed by climate advocates that should inform those evaluations. While the global community has demonstrated that it can, in essence, walk and chew gum at the same time, the question this time is whether it can do so while running.That will be tested starting next year with submissions to the next COP.
Implementation of the various COP26 pledges will be a critical piece of the equation. The test will continue to be how to turn commitments into action for this decade. As the UN Secretary General indicated, "COP27 begins today." In some ways, Glasgow represents a sharper focus on science-aligned plans — by governments and business and in the face of a new global climate consciousness — to maintain climate stability, and the focus will now shift to the implementation and refinement of those commitments. For companies, growing global climate consciousness and risks and opportunities posed by the energy transformation present a new post-Glasgow dynamic necessitating climate engagement, but requiring a credible approach in doing so.
As we have described in prior posts, the social cost of carbon is a tool that expresses in dollar amounts the estimated cost to society of a one metric ton increase in CO2 emissions. Developed by a federal interagency working group (IWG) originally to aid cost benefit analysis in rulemaking context, the tool also has potential use in the project approval, by informing agency assessments of environmental impacts under the NEPA. By and large, however, courts have accepted agency decisions not to utilize the SCC in their analysis, often relying on the well-established rule that NEPA generally does not mandate cost-benefit analysis. See 40 C.F.R.1502.22.
Enter Vecinos, the most recent decision in an evolving area of law. The case concerned FERC approval of liquefied natural gas export terminals and pipelines in Texas. As it has in past projects, FERC quantified the greenhouse gas emissions associated with construction and operation of the facilities, but declined to consider the significance of those effects on the project's contribution to climate change. The Commission justified this position on the grounds that there is no "universally accepted methodology to attribute discrete, quantifiable, physical effects on the environment to" an individual source's greenhouse gas emissions. Local residents, environmental groups, and a nearby city challenged, arguing, inter alia, that the Commission was obligated to use the social cost of carbon in light of 40 C.F.R.§1502.21,CEQ执行NEPA规范要求机构评估基于理论方法或研究方法的影响,即“科学界普遍接受”,即“无法获得可合理预见重大不利影响相关信息”。
d.C电路判定委NEP分析不充分。它关于碳 < ahrf='##ftn1命名s'#ftnref1>>>[1]社会成本的决定完全取决于FERC未考虑§1502.21的潜在效果,而FERC命令或简介中则未讨论或引用该作用。Circuit decision which had upheld FERC's decision not to use the social cost of carbon in other projects, which also did not discuss the regulation.[2]
Accordingly, on remand and in the future, FERC and other agencies will have to more directly evaluate the tool and the rigor of the science behind it. Proponents will argue that the social cost of carbon is the kind of "generally accepted" theoretical approach § 1502.21 requires be incorporated into NEPA: The IWG's SCC framework is at this point over a decade old, and was designed from the start to reflect scientific consensus, incorporating the three most widely cited climate economic impact models, each of which have been extensively peer reviewed. The National Academy of Sciences has recognized the tool and provided recommendations on how to strengthen it, which the Biden Administration is actively working to incorporate through an inclusive public process with stakeholders and experts to ensure that projections are based on the "best available science."
The decision is the latest in a series of cases assessing the adequacy of FERC's NEPA analysis. The D.C.电路要求FERC更充分地考虑核准项目气候后果, 特别是s/www.sierraclub.org/files/blog/FINAL%20ORDER%202020-22-17.pdf'Circuit made clear that it was stopping short of forcing the social cost of carbon on FERC. Indeed, the Vecinos court remanded the approval without vacating it, concluding it was "reasonably likely" that the Commission would be able to reach the same result even after discussing § 1502.21, and that vacatur could "needlessly disrupt completion of the projects." Construction of the facilities continues after the ruling.
Even if Vecinos does not result in broader adoption of the social cost of carbon in project approval, changes from the executive and legislative branches may, for FERC as well as other agencies. By the end of this month, the interagency working group will submit recommendations on "areas of decision-making, budgeting, and procurement" across the federal government where the SCC should be applied, which could include project approval and NEPA analysis. Regarding FERC specifically, President Biden will soon be expected to announce his replacement for Commissioner Neil Chatterjee, potentially shifting the Commission to a Democratic majority and providing additional support to Chairman Glick, who has vocally supported having the Commission consider the significance of greenhouse gas emissions and the social cost of carbon in NEPA analyses.
[1] Vecinos separately held that the Commission's environmental justice analysis was arbitrarily limited, as it did not discuss potential disproportionate effects more than two miles away from the project site.
[2] See EarthReports, Inc.公元前FERC ,828F3d949956Cir市2016年)appalachian声音vFERC 号17-12712019WL847199Cir市二月192019SierraClub公元前FERC ,672FedAppx3839Cir市2016年)
The European Commission is currently discussing a draft of a proposal for a Carbon Border Adjustment Mechanism ("CBAM") Regulation that it is expected to present on July 14, 2021. A CBAM was already announced in the European Commission's Communication for a Green Deal and is intended to protect the EU's domestic industry that is at risk of carbon leakage—to create a level playing field—and to serve as a policy tool to encourage third countries to reduce their greenhouse gas ("GHG") emissions.
The CBAM draft proposal is subject to intense negotiations among the different Directorates-General of the European Commission, and it is likely that it will be amended several times before the Commission finally presents it on July 14. Nevertheless, the draft already suggests that the CBAM proposal will require importers of covered goods into the EU to purchase and surrender a number of CBAM certificates that reflect the goods' embedded emissions.依据欧洲议会s/www.europara.eu/doceo/document/TA-9-2021-0071_EN.html>决议 ,CBAM建议可能包含以下元素:
In addition to the details of the CBAM Regulation yet to be concluded by the EU, it also remains to be seen how the EU's pending efforts to adopt the CBAM will affect other international carbon pricing and climate mitigation efforts. However, the timing of the EU's movement on the CBAM is significant in the context of the G7 Communiqué from the Cornwall meeting, which "acknowledge[s] the risk of carbon leakage" and "recognise[s] the potential of high integrity carbon markets and carbon pricing to foster cost-efficient reductions in emissions levels, drive innovation and enable a transformation to net zero." These actions provide important fodder for the prospect of a more significant international agreement on carbon pricing as momentum continues to build toward the Glasgow COP 26 in November.
很明显,GGPPA允许那些已经建立自己的定价系统(如不列颠哥伦比亚省碳税)的省继续实施,只要它们满足联邦基准并容留Quebec决定继续参与加利福尼亚联通碳市场ahrfs/www.canada.ca/en/encern-climate-changes/climate-crap-thow-it-will-work.html#toc2联邦系统下收到的所有收益都返回产生收益的省对于那些未承诺计费排放的省,政府将在提交报税表时以支付形式向个人退还大约90%的燃料收费收益i/p>
/p>Alblict先前与加利福尼亚州和魁北克省联手建立区间交易程序,2018年新政府当选时突然退出跨边界市场萨斯喀彻温省、安大略省和艾伯塔省质疑GGPA合宪性萨斯喀彻温省上诉法院和安大略上诉法院分判该判决合宪性艾伯塔法院判定它不是.
它还指出,温室气体排放就其性质而言,对省际协调构成具体挑战。The Court observed that, absent a federal pricing floor, any province's failure to implement a sufficiently stringent pricing mechanism could undermine the efficacy of GHG pricing everywhere due to the risk of carbon "leakage," i.e., that emissions reductions occurring in any given province would be offset, as emissions and business activity migrate to provinces implementing weaker programs.
Responding to arguments that the GGPPA amounted to federal infringement upon traditional provincial arenas, including a province's control over its natural resources, the Court emphasized the law's design as a "backstop." It noted that the GHG pricing floor is not imposed on provinces with established, "sufficiently stringent GHG pricing system[s]." By virtue of this design, the GGPPA affords provinces "the flexibility to design their own policies to meet emissions reductions targets." Moreover, to the extent the GGPPA infringes upon traditional provincial arenas, the majority viewed this "limited constitutional impact" as "justified" in light of the irreversible harms posed by climate change, which will be "borne disproportionality by vulnerable communities and regions."
Finally, the Court held that the GGPPA's fuel and excess emission charges are "constitutionally valid regulatory charges," not taxes.3位持异见法官均对GGPPA造成政府内部不平衡表示担忧。科泰大法官同意多数人的意见,即气候变化构成国家关注问题,但认为议会-非行政部门-应负责处理该问题。布朗大法官与罗大法官同意省政府GPA构成联邦超量他们解释说,法律威胁加拿大联邦体系结构,允许国家政府做出更宜留待各省作决定。
pem>Upshot :美国企业和决策者注意到这项决定有几个原因:- First为联邦基准开脱,并部分侵入省政府对脆弱社区,包括土著人民将法院裁决环境司法置于应对气候变化努力中心In this respect, it affirms the stature that the Biden-Harris Administration has accorded environmental justice as a critical component of its climate strategy, including in its Day One executive order and initial efforts to re-establish the social cost of carbon pollution.
- Second, in holding that the risk of carbon leakage warrants a minimum national price, the Court recognizes the fundamental dilemma for any jurisdiction embarking on carbon pricing in the absence of assurances that its neighbors won't undercut its competitiveness.加拿大支持解决碳渗漏问题,同时尊重省政府实验不同碳定价机制,并在此方面可提供实用模式供联邦政策框架使用,既适应又支持已经推进某种形式的碳定价的州的努力。
- 第三批,认为联邦基准不是一种税,而是一种旨在减少排放的合法监管收费,多数法院的裁决与一个重要的
最后,裁决可能重新聚焦于可能对美国出口应用碳边界调整总统气候问题特使John Kerry最近敦促欧洲联盟(EU)延缓拟议的碳边界调整机制, cap-and-tradebase
The Biden Administration has promulgated interim figures for the social cost of carbon (SCC), which will support key policy efforts in the next year until a final, revised figure can be established.
As we noted in a prior post, the SCC is a concept, developed by the Obama Administration's Interagency Working Group, that seeks to quantify the economic harm from climate and other impacts of greenhouse gas emissions by expressing a dollar value cost to society from a one metric ton increase in CO2 (or methane or nitrous oxide) emissions. This is a complex task, as it seeks to quantify future impacts across human civilization, such as human mortality, depressed agricultural production, increased risk of conflict, property damage from extreme weather events, and the value of ecosystem services. Although the Trump Administration continued to apply an SCC in agency decisionmaking, it relied on a revised methodology, which estimated the SCC to be roughly one-seventh of the cost estimated by the Working Group.
Biden's interim SCC figures re-establish the Obama Working Group estimates, adjusting them only for inflation, resulting in an estimated cost per metric ton for current year emissions using a 3 percent discount rate of $51 for CO2, $1,500 for methane, and $18,000 for nitrous oxide. The same policy decisions undergirding the Working Group SCC estimates, most notably the choice to take into account global, not just domestic, damages, remain in place. Additionally, while the Trump Administration used two discount rates recommended by OMB's Circular A-4 – 3 and 7 percent – Biden's interim SCC figures revert to use of three discount rates – 2.5, 3 and 5 percent.
The reconvened Working Group also observes that new evidence on the consumption discount rate (based on the average rate of return on inflation-adjusted 10-year Treasury Securities) supports that the appropriate discount rate is notably lower than 3 percent. The Interagency Working Group also observes that consideration of the uncertainty and ethics associated with discounting intergenerational impacts warrant consideration of discount rates below 3 percent, including 2 percent and lower. As an interim recommendation, the Interagency Working Group urges agencies to consider conducting additional sensitivity analyses using discount rates below 2.5 percent.
An accompanying White House blog post signed by Heather Boushey of the Council of Economic Advisers (on behalf of the Interagency Working Group co-chairs) notes that "our understanding of the appropriate approach to discounting[] has advanced rapidly," and that an upcoming Federal Register notice will invite comment on how to improve the government's approach. This is consistent with another of Biden's day one orders which directed the Director of OMB to "identify ways to modernize and improve" the regulatory review process.
The Interagency Working Group will be working to provide a more comprehensive update by January 2022. These new estimates could look quite different, as the current interim ones do not incorporate the recommendations of a 2017 report by the National Academy of Sciences.
As the Working Group progresses its efforts, expect future SCC estimates to take into account equity considerations, consistent with the President's broader focus on environmental justice. As noted in a recent panel discussion, one of the emerging frontiers in climate econometrics is demonstrating the disproportionate impacts that climate has on disadvantaged areas. Biden's day one executive order directed the Working Group to provide recommendations to revise SCC methodologies to take into account "environmental justice" and weigh these impacts to better steer federal decisionmaking!博客文章确认此焦点并承诺工作组与公众和多方利益攸关方接触,以开发“透明强势科学估计值”。
SCC最终由工作组建立可能产生溢出效果,超出美国政府支持规则制定和环境影响评估的利益成本分析范围。碳市场、内部企业碳核算和投资者对净零变换策略期望都可能受SCC估计量的影响。