POLITICO Pro Morning Energy and Environment, presented by GasNaturally: Making finance green and blue
With thanks to Anca Gurzu, Sara Stefanini, Marion Solletty.
BONN TRAVAIL! Hope never dies. The head of the U.S. delegation to the global climate talks in Bonn on Thursday evening reiterated President Donald Trump’s stance that the U.S. “intends to withdraw at the earliest opportunity” from the Paris agreement. But that doesn’t mean the U.S. doesn’t want to remain engaged with partners on climate issues, said Judy Garber, an acting assistant secretary at the State Department. Washington remains “open to the possibility of rejoining at a later date under terms more favorable to the American people,” she said. U.S. emissions have fallen as the economy has grown, largely thanks to private sector innovation, Garber was keen to point out. She also touted natural gas, nuclear, solar, wind, energy storage and energy efficiency, and said the U.S. is working with countries such as China and India on smart grids and carbon capture and storage (or, how to make coal clean).
COP23 — ANTI-COAL ALLIANCE: The U.K. and Canada staged a political push Thursday to build an anti-coal alliance. The “global alliance to power past coal” now has some 25 partners, Canada’s Environment Minister Catherine McKenna and Claire Perry, the U.K.’s minister for climate change, told reporters. “Coal is literally choking our cities,” McKenna said. The alliance’s declaration left the door open to carbon capture and storage solutions. European members include France and Italy, which both aim to phase out coal in the next decade and so had an arguably easy time joining. Mexico and New Zealand and several Canadian provinces and one U.S. state — Washington — will also join, they said. Emily Holden has more or read below.
— Germans in an awkward spot: Germany’s continued dependence on coal has been a sore spot for this year’s summit host. And with difficult coalition talks underway to form a government, Barbara Hendricks, the German environment minister, was caught in a tight spot when asked about the new alliance. “We were asked whether we want to participate. I have asked for understanding, that we cannot decide this ahead of the next government. The initiative, however, will keep us up to speed about what’s happening,” she said in an emailed statement.
— U.K. gets a pat on the back: The U.K. government hasn’t had an easy time with Brexit, but its anti-coal push was welcomed by NGOs in Bonn. “The U.K. was the first country to industrialize, so it’s important for them to be leading this coal phase-out,” Mohamed Adow of Christian Aid told Sara, adding that it’s important to “pick on coal and get all the developed countries to commit to a coal phase-out by 2020, 2025.”
— Dutch reiterate their emissions push: Eric Wiebes, the Dutch climate minister, told the world about the Dutch plan to push the EU’s emissions reduction target from at least 40 percent to 55 percent, as laid out in the country’s recent coalition agreement. NGOs applauded the move.
**A message from GasNaturally: How to make use of surplus electricity generated from wind and sun? By turning it into storable gas. Power-to-gas is an innovative technology that converts the excess power of variable renewable sources into gas. Advantages: a more flexible, balanced and affordable low-carbon energy system.**
ET BONN VOYAGE! It’s Friday and we’ve reached the final day of the COP23 climate summit. We’re getting ready for the last high-level speeches this morning and the closing session in the afternoon. Fingers crossed, everything will be wrapped and settled by 6 p.m. For a look back at it all, Playbook’s Ryan Heath spoke to Sara in his weekly podcast. But first…
CLEAN AIR IN PARIS: Marion’s weekly Environment Insight landed in your inbox Thursday, and it’s full of news about efforts to cut air pollution across Europe, a controversial motorway in Bulgaria and Europe’s bio-economy.
MARK YOUR CALENDAR: Our weekly calendar for all things energy and environment also landed in your inbox on Thursday. Help us help you: Do feel free to go online to export and plan your week or submit your own event here.
COP23 INTERVIEW — FIGHTING POLLUTION WITH FINANCE: The European Investment Bank (EIB) wants to use finance to fight marine litter, President Werner Hoyer told me in Bonn. “The more plastic garbage is in the ocean the more expensive it will be to clean it up one day,” he said. That’s also why he wants to further develop the “blue bond” market to fund projects that help clean up the oceans. Pollution there is “completely underestimated,” he said. Early next year Hoyer wants to raise the issue of improving financing for the U.N.’s Sustainable Development Goals for 2030 — including clean water — with U.N. Secretary-General António Guterres.
— Green bonds tell a success story: The blue bond idea is inspired by the green bond initiative, which raises money for climate projects, he said. The EIB has a lot of experience on that front, given it’s the biggest issuer of green bonds, Hoyer said. Priority now is to “define the criteria of what a green bond is,” he said. “Some people have the suspicion-raising habit of putting a green label on their suit and consider themselves climate activists, that is not enough,” he said.
ENVIRONMENT — MEPS SUPPORT TOUGHER ENVIRONMENTAL LAW: The European Parliament on Thursday welcomed the Environmental Implementation Review, the Commission’s new tool to monitor progress on implementing EU environmental law across the bloc. The Parliament, however, called on the Commission to strengthen it by including areas such as climate change, chemicals and industrial emissions, which are currently not covered.
— MEPs also called on the Commission to come forward with a legislative proposal on environmental inspections, something the previous Commission worked on but was dropped in this package. The Commission instead came up with a softer version, the review. It aims at encouraging progress through good practices and dialogue with authorities. The EU currently has only non-binding criteria for how EU countries monitor and control the implementation of EU environmental legislation, and great disparities persist.
REGULATION — STATE OF ENERGY UNION: Maroš Šefčovič, vice president for the energy union, wants countries to get a move on preparing for policy plans to implement the bloc’s 2030 energy and climate targets, he said at a POLITICO Playbook Breakfast on Thursday. He’ll have the same message in the upcoming State of the Energy Union report, expected on November 23. The goal will be to “intensively” work with governments to get them begin preparations for their national energy and climate plans for the next decade.
— Why is this important: Šefčovič has repeatedly called on capitals to speed up work on the plans, arguing they bring certainty for investors. In an effort to streamline the process, the Commission prepared templates where governments can fill in their plans’ details. “It shouldn’t be such a difficult rocket science,” he said.
— The problem? It’s that not everyone pays attention to Šefčovič’s nudge. Only two-thirds of EU countries started work on the plans, while the other third is hesitating, he said.
FUELS & REGULATION — TUSK’S NORD STREAM 2 LETTER: European Council President Donald Tusk wants EU countries “to proceed swiftly” in tackling Brussels’ proposal to extend the EU’s gas rules to pipelines from third countries. That’s according to a letter Tusk sent to national governments on November 10 and we obtained. “Time is of the essence, if we are to achieve the objectives of our energy union,” the letter read. Brussels proposed the legal amendment earlier this month in order to bring the future operation of the Nord Stream 2 pipeline under the bloc’s energy liberalization rules. Tusk, a Pole and an avid opponent of the Gazprom-led pipeline, previously warned that the project is not the EU’s best interest since it would make the bloc more dependent on Russian gas.
FUELS — NORWEGIAN OIL WANTS TO DITCH CRUDE INVESTMENTS: NGOs reacted positively to news that Norway’s $1 trillion sovereign wealth fund wants to drop its investments in oil and gas stocks. ”This is big news,” said Colin Roche, extractives campaigner with Friends of the Earth Europe. “That the Norwegian central bank is even contemplating divestment from the oil and gas giants shows that their days are numbered. The world simply cannot afford what they’re selling — continued use of fossil oil and gas.”
— Oil is bad for money: Norges Bank, which manages the fund, said the move would shield the country’s wealth from a potential permanent drop in crude prices. Oil and gas equities currently account for around 6 percent of the fund’s investment, or about €31 billion. However, the bank also said that its advice is based “exclusively on financial arguments” and “does not reflect any particular view of future movements in oil prices or the profitability or sustainability of the oil and gas sector.”
— QUICK HITS:
Clean energy financing for Africa: The European Commission will announce measures next month for using external EU funds to help develop clean energy and boost electricity access across Africa, Šefčovič also said on Thursday. The Commission will give the details on December 12 in Paris at the One Planet Summit, a French government-supported event focused on climate financing.
More Swedish money for climate adaptation fund: That’s what Sweden’s environment ministry announced on Thursday. It’s also a top contributor to the Green Climate Fund.
France’s Hulot has nuclear communication problems: French Energy and Environment Minister Nicolas Hulot had a hard time swallowing the formal announcement that France would drop a 2025 deadline to cut the share of nuclear in its electricity production. “It can’t go on like this,” he said after the presser, where he was flanked by his two junior ministers in the press room of the Elysée palace, according to Le Point. While he told the newspaper he was willing to take responsibility for the decision, he said the comms operation made him angry. “It looked staged. There was no need for this setting which didn’t look like me.”
French pollution a risk to children: Three out of four nurseries investigated by French authorities present risks of exposure to toxic chemicals such as lead or mercury, because they were built on the grounds of former industrial sites, Le Monde reported.
Flanders love nuclear: A report looking into alternatives to nuclear power sparked wide-ranging reactions Thursday, as Belgium is set to shut down its nuclear facilities by 2025. The Flemish N-VA, for one, called for several nuclear plants to continue operating for at least a decade more. That opinion that contrasted with the rest of the political class, according to Belgian radio RTFB.
Biofuels against climate change: Nineteen countries under the Biofuture Platform released a declaration in Bonn on Thursday, promising to develop collective targets for using sustainable bioenergy in transport. The platform counts Denmark, Finland, France, Italy, the Netherlands, Sweden and the U.K. among its members.
**A message from GasNaturally: The gas industry works every day on finding new, innovative solutions to reduce emissions and achieve a clean energy future. Power-to-gas (P2G) is an example of promising technology. P2G is the process of converting surplus electrical power generated from renewable sources such as wind and solar into either methane or renewable gases that can further be injected into the natural gas infrastructure. In the future, power-to-gas will bring flexibility and balance to the transforming energy system and will allow for integration of variable renewable energy without the need for massive investment in new electricity infrastructure. Power-to-gas thus allows maximum benefit from both networks. It also fosters the integration of renewable energy in Europe. This in turn will lower the cost of balancing electricity systems and reduce price volatilities. Maximizing the injection of hydrogen into the gas grid is another challenge for the innovation to be worked alongside the P2G technology.**
***POLITICO Pro article***
New anti-coal push in Bonn pits nations against US
— By Emily Holden
BONN, Germany — Canada and the U.K. on Thursday launched an anti-coal alliance at the global climate summit here, a direct challenge to the Trump administration’s bid to promote new high-efficiency coal-fired power plants.
Canadian Environment Minister Catherine McKenna and Claire Perry, the U.K. minister for climate change, formally launched the 27-member group whose declaration said it will seek to close down existing coal plants and “impose a moratorium on any new traditional coal power stations without operational carbon capture and storage.”
“Coal is literally choking our cities, with close to a million people dying every year from coal pollution,”McKenna said.
Almost 40 percent of global electricity comes from coal, and while McKenna acknowledged that phasing it out would not be easy, she said it was crucial to achieve climate goals and protect public health.
Other members include France and Italy, which both aim to phase out coal in the next decade, and Finland, Mexico and New Zealand. Two U.S. states — Washington and Oregon — will also join. Both have already announced plans to shutter their coal plants. While the group’s members consume only a small fraction of the global coal supply, they aim to form a powerful political partnership.
McKenna said despite the U.S. effort to support coal, the economic case for the fuel was fading.
“There are cheaper, more sustainable sources of power, in particular clean power, renewables,” she said. “The economics dictate it, but we need to be supporting countries that want to make the move. We’ve said that there are developing countries [where] there might be a price deferential. We want to be helping to support them. This is the huge opportunity.”
Officials from the White House have used the annual climate change conference to tout “cleaner” fossil fuels, including at a controversial event on Monday that drew protesters. But the head of the American negotiating team delivered a speech to the assembled nations that carefully steered clear of coal.
Judy Garber, an acting assistant secretary at the State Department, at the COP23 high-level session said the U.S. still intends to withdraw from the 2015 Paris deal and is open to rejoining later under “more favorable” terms. The U.S. team has said it was not planning to discuss those terms at the Bonn meeting.
Garber noted “dramatic decreases in the cost of low-emissions technologies and fuels, including natural gas, solar, wind, energy storage and energy efficiency,” but also referenced work with China and India capturing carbon emissions from coal.
“We know that each country will need to determine the appropriate energy mix based on its particular circumstances, taking into account the need for energy security, promotion of economic growth and environmental protection,” she said. “In that context, we want to support the cleanest, most efficient power generation, regardless of source.”
Not all developed countries are on board with the new anti-coal pitch, including Germany, where Chancellor Angela Merkel is still struggling to form a new government.
“We were asked whether we want to participate. I have asked for understanding, that we cannot decide this ahead of the next government,” said Barbara Hendricks, the German environment minister. “The initiative, however, will keep us up to speed about what’s happening.”
Kalina Oroschakoff contributed to this report.