In the first two months of 2013, there were only 58 requests (according to the United Nations Framework Convention on Climate Change, UNFCCC) to register  Clean Development Mechanism (CDM) projects in the world, compared to 280 requests in January and February 2012. CDM is one of the three flexible mechanisms defined in the Kyoto Protocol that provides for emissions reduction projects with Certified Emission Reduction (CER) units, essentially credits that can be traded in emissions trading schemes. Developed countries can fulfill their commitments to reduce emissions by buying CERs from developing countries, which, in turn, achieve sustainable development by building emissions reduction projects.

The CDM provides a solution for financing low carbon projects in developing countries, as CDM projects can derive revenue from two sources: operational revenue, such as selling electricity or decomposition product, and selling the CERs from the project to Annex I (industrialized) countries under the Kyoto Protocol. For example, a wind power plant can sell its generated electricity to domestic grid companies while gaining extra income from selling CERs after achieving a certain amount of CO₂ emission reductions.

However, as shown by the lack of new CDM projects, the mechanism is failing. Due to oversupply of CERs, the price for each unit is falling rapidly. Two years ago, the CER price was above €12/ton of carbon dioxide equivalent (tCO2e) (US$15.46/tCO2e). At present, it is less than €0.5/tCO2e (US$0.64/tCO2e) (See Figure 1).

China is especially hard hit as it dominates the CDM market with the largest investment of CDM projects in the world ($220 billion, or 61.8 percent of total registered CDM projects globally). These Chinese CDM projects have supplied 738 million CERs, or 61.2 percent of all 1,200 million CERs issued from 2005 to present.

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Sometimes it looks as if the Parties to the UN Framework Convention on Climate Change have bet large amounts of money against themselves on the success of climate negotiations.

"Are we done yet?” Poland has hardly been an enthusiastic actor in UNFCCC negotiations (Source: IISD.ca)

Countries are now engaged in an excruciatingly slow race to reach an agreement by 2015, which would for the first time commit both the developed and the developing world under “a protocol, another legal instrument or an agreed outcome with legal force” (ah, the beauty of UNFCCC language…), in order to meet the goal of 2 degrees warming by the end of the century, the “safe” limit that was agreed upon at the 2009 Copenhagen summit.

Given what’s at stake, and the inefficiencies inherent to the UN process, you’d think that the world’s nations would make sure that not a minute is lost in the talks. And yet, after a Qatari Presidency that left everyone with the vivid memory of conference chairman Abdullah bin Hamad al-Attiyah literally hammering out a last-minute deal, Poland has been designated to host the 19th annual Conference of the Parties (COP19) next October.

It may not be obvious, at first sight, why Poland hosting the climate talks seems like a step backwards. After all, the ambitions around COP19 are not to come up with a global agreement, but rather to make substantial advances on pressing issues in preparation of the Durban Platform deadline, fixed for 2015 (and a very likely French Presidency). But it helps to remember that the last COP on the road to the rather underachieving Copenhagen Conference in 2009 took place in Poznań, which could say something about the capacity of a Polish COP Presidency to pave the way for ambitious deal-making. These fears, of course, are not enough to dismiss Poland as a valuable host. What weighs heavier is that the country does have a history of blocking progress in climate negotiations, particularly at the European Union level.

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By Cinthya Alfaro Zúñiga

As a native Costa Rican and Worldwatch Institute/INCAE Research Fellow, I was excited to attend the Energy and Environment Partnership’s (EEP) 21st Regional Forum in my home country earlier this month. EEP’s primary objective is providing finance for renewable energy projects, but it also seeks to build capacity by exploring diverse topics such as different energy technologies, policies needed for successful implementation, and regional obstacles and opportunities through stakeholder dialogues.

Worldwatch and INCAE presented Phase 1 of "The Way Forward for Renewable Energy in Central America" in Costa Rica in March.

Under the title “Biogas and Energy Efficiency in Central America,” the most recent Forum convened a group of 200 experts, project developers, governmental representatives, financiers, and the general public. The speakers addressed topics such as the contribution of energy efficiency policies and renewable energy toward carbon emissions reductions. Other important themes included the status of biogas and energy efficiency in Central America, as well as a run-through of EEP energy efficiency and biogas projects in the region.

The three-day event featured speakers from the German Cooperation Agency (GIZ), the Costa Rican Electricity Institute (ICE), the Economic Commission for Latin America and the Caribbean (ECLAC), the Central American Bank for Economic Integration (CABEI), and the Worldwatch Institute, among others.

On behalf of Worldwatch, President Emeritus Christopher Flavin presented on the global status of renewable energy and Climate & Energy Director Alexander Ochs summarized the results from the first phase of the Worldwatch/INCAE project, “The Way Forward for Renewable Energy in Central America,” which applies the Institute’s sustainable energy roadmap methodology to the region. Dr. Ana María Majano, Associate Director of the INCAE Business School’s Latin American Center for Competitiveness and Sustainable Development (CLACDS), joined Ochs as the lead in-country implementation partner.    

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Following the call to action and sweeping plan of attack offered by President Obama during his Second Inaugural Address last month and State of the Union this week, it is clear that he has made climate change a priority in his second term.  From outlining the need to increase renewable energy research and installations to setting an ambitious goal of improving efficiency in homes and businesses by 50 percent over the next twenty years, President Obama’s wide-reaching plan has the potential to once again make the United States a global leader in environmental action.

President Obama discusses Hurricane Sandy, an extreme weather event that has been linked with climate change, with disaster response officials. Obama has reaffirmed his intention to fight climate change in his second term (Source: The White House)

While President Obama’s renewed commitment to address climate change has raised hopes, it is important to review the successes and failures of his last four years in order to set realistic expectations for what is possible during his second term.

Early during his first term, the United Nations climate negotiations in Copenhagen presented President Obama with a major international opportunity to demonstrate how his Administration would differ from the previous eight years of the United States playing foil to international environmental cooperation during the Bush Era.  The Obama Administration did not rise to the challenge, instead offering minor concessions while continuing to push for stalling the negotiations until 2015 and beyond, effectively deferring the responsibility for an international treaty to the next Presidential term.

Domestically, Obama’s environmental track record fared somewhat better.  The Administration has advanced environmental protection by increasing vehicle mileage standards, expanding protected areas, strengthening air quality standards, and raising federal investment in clean energy to the highest levels in US history.  On the other hand, the Obama Administration failed to oversee comprehensive climate legislation, and has drawn out the decision on the Keystone XL tar sands pipeline.

Of course, there are some extenuating circumstances that Obama faced in his first term that made success more difficult to achieve.  While a lack of political readiness or will to move may be to blame for the Administration’s lack of forward progress at international negotiations, domestically the Obama team’s success was tempered by a divided congress, the prolonged economic depression, and a desire to remain an appealing candidate throughout a hotly contested re-election. 

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The DR’s National Energy Commission leads by example using Net Metering to reduce monthly bills. This solution also provides surplus renewable energy to the grid, reducing the country’s total amount of fossil fuel-based energy.

Since October 2012, the energy sector in the Dominican Republic has been in the spotlight as a result of President Danilo Medina’s efforts to deal with the country’s larger fiscal crisis. Over the years, decisions made within the sector have led to an unsustainable level of debt, poorly maintained infrastructure, and a reliance on fossil fuels that, in 2010, cost the government US$2.6 billion.

With all of this attention, the opportunity exists to overhaul the floundering electricity sector and bring it in line with the country’s vision of a sustainable future. The Dominican Republic has a stated goal of obtaining 25 percent of its energy from renewable sources by 2025. And at the recent United Nations climate talks in Doha, Qatar, Mr. Omar Ramirez, Executive Vice-President of the Dominican National Council for Climate Change and the Clean Development Mechanism (CNCCMDL), said the country will reduce its carbon emissions 25 percent from 2012 levels by 2030.

These are ambitious targets for a country that relies on fossil fuels for more than 90 percent of its primary energy. But they can be achieved if decision makers seize this moment and embrace new thinking. It will not be enough to just add more generating capacity to the mix. Real reform will come when subsidies not longer hide the true cost of fossil fuel use, when renewable energy promotion is prioritized, and when energy sector agencies are structured in a way that provides transparency and accountability and is in line with stated long-term energy goals.

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The recent increase in U.S. oil production after four decades of decline has attracted great excitement in the energy industry and beyond.  The International Energy Agency, projects that North America could become a net oil exporter within the next few decades.

While these developments are undeniably dramatic, they may be obscuring some other unexpected and potentially transformative changes with large implications for the U.S. economy and the global environment.  They include:

1.  U.S. energy consumption declined in 2012 for the fourth time in the last five years—even as economic recovery began to take hold.  According to preliminary Worldwatch estimates, total energy use in 2012 was a full 7 percent below the 2007 level, the steepest five-year decrease in at least 60 years.  Most of this decline results from advances in U.S. energy productivity—dominated by gains in transportation fuel economy and building efficiency.

2.  Reliance on natural gas is growing rapidly, particularly in power generation.  Falling natural gas prices, sparked by the shale gas boom, has led electric utilities to switch from  coal to gas while many manufacturing companies have been replacing oil with gas.  (Not surprisingly since gas prices averaged the equivalent of $18 per barrel in 2012 while oil hovered at $100.)  Natural gas provided the U.S. with 27 percent of its total energy in 2012, compared with just 18 percent from coal.

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Worldwatch's Shakuntala Makhijani presents early findings of the Sustainable Energy Roadmap for Jamaica.

Recently, members of Worldwatch’s Climate & Energy program traveled to Kingston, Jamaica to conduct a Stakeholder Consultation for the ongoing Sustainable Energy Roadmap project. The workshop comprised a morning session where the Roadmap’s early findings were presented to members of the country’s electricity sector followed by an afternoon dialogue addressing some of the key questions at the heart of the team’s ongoing research. The consultation came at a very key time as Jamaica is in the midst of some significant changes in the electricity sector while it faces an ongoing energy crisis.

The Sustainable Energy Roadmap for Jamaica is part of a multi-year project sponsored by the International Climate Initiative of the German Ministry of Environment. Worldwatch is examining recently assessed renewable resource potential, current energy policy frameworks, the potential for adding energy efficiency measures, technical challenges to renewable energy integration and underlying economic factors to try and help decision makers understand the choices available for making the country’s electricity sector more sustainable. Not surprisingly, the country has a tremendous solar resource, an average of 5 to 7 kilowatt-hours per meter squared per day (kWh/m²/day), similar to the Southwest of the United States. It also has strong wind potential including some significant locations off the Southeast coast of the island.

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This article was originally published in Outreach Magazine. The original can be found here.

The latest UN climate negotiations are underway in Doha, Qatar but the talks need a stronger focus on energy's role in climate change. (Source: UNFCCC)

More than half of all human-caused greenhouse gas emissions result from the burning of fossil fuels for energy supply. Even excluding traditional biomass, fossil fuel combustion accounts for 90 percent of carbon dioxide (CO₂) emissions. Against this background, it is surprising how limited a role energy is playing in the ongoing climate negotiations. And yet this discussion could be instrumental in refocusing the debate about what is necessary and what is possible in both the areas of climate mitigation and adaptation—bringing it back down from the current inscrutable spheres of negotiation tracks, subsidiary bodies, parallel sessions, ad-hoc working groups, and special meetings (which, let’s be frank, nobody outside the negotiators understands anymore).

First, a focus on energy shows how far we are from solving the climate crisis. Energy-related CO₂ emissions grew 3.2 percent in 2011 to more than 31 gigatons—despite the economic crisis. We know that if we don’t want to lose track of the 2-degree Celsius threshold of maximum warming that would hopefully avoid major disasters, energy emissions must decline by at least one third to 20 gigatons in 2035, despite expectations that energy demand might double in the same time frame.

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Figures for the first half of 2012 show a remarkable shift in U.S. energy trends. Coal-fired power generation has plummeted to 20 percent below last year’s level and 31 percent below the peak reached in 2007.  Far from being the fossil fuel of the future (according to many industry leaders and even some environmentalists) American coal may now be in an irreversible downward spiral.

Coal’s decline has two main causes.  Electricity use has virtually leveled off in the United States since the great recession began in 2008, leaving many U.S. utilities with excess generating capacity and more latitude to choose which of their power plants will operate.  Meanwhile, the rapid decline in U.S. natural gas prices this year—averaging the equivalent of $13 per barrel of oil—has allowed utilities to fire up some of their newer and more efficient gas plants while idling many of their coal plants.

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Climate scientists are getting their fair share of surprises this year, from the record-breaking ice melt in the Arctic to the fact that first-quarter U.S. carbon dioxide (CO₂) emissions have hit their lowest point since 1992. CO₂ emissions from energy consumption for the January-March period fell to 1.34 billion metric tons, down 8 percent from a year ago. While the depressed economy and rising renewable energy generation have contributed to emissions reductions in the past few years, the early 2012 low-point is due mainly to a combination of three factors: the relatively warm winter, reduced gasoline demand, and the continued decline in coal-fired electricity.

Natural gas and wind dominated new capacity additions in the first half of 2012 (Source: EIA)

The declining demand for coal power is especially significant. Although emissions from natural gas and petroleum each dropped nearly 3 percent from the same period in 2011 (mainly because of lower heating demands in the mild winter), coal emissions fell 18 percent, to their lowest point since 1986.

The first half of 2012 also saw significant additions of new renewable energy capacity, although natural gas plants accounted for the vast majority of new capacity in states that traditionally rely on coal power. The low price of natural gas, bolstered by the U.S. shale gas boom, has driven many power producers to shift from dirtier coal generation to cleaner natural gas-fired power plants. When burned, natural gas emits around half of the CO₂emissions as coal combustion.

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