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What Just Happened in Solar Is a Bigger Deal Than Oil Exports

December 21, 2015 Webmaster

The clean-energy boom is about to be transformed. In a surprise move, U.S. lawmakers agreed to extend tax credits for solar and wind for another five years. This will give an unprecedented boost to the industry and change the course of deployment in the U.S.

The extension will add an extra 20 gigawatts of solar power—more than every panel ever installed in the U.S. prior to 2015, according to Bloomberg New Energy Finance (BNEF). The U.S. was already one of the world’s biggest clean-energy investors. This deal is like adding another America of solar power into the mix.

The wind credit will contribute another 19 gigawatts over five years. Combined, the extensions will spur more than $73 billion of investment and supply enough electricity to power 8 million U.S. homes, according to BNEF.

“This is massive,” said Ethan Zindler, head of U.S. policy analysis at BNEF. In the short term, the deal will speed up the shift from fossil fuels more than the global climate deal struck this month in Paris and more than Barack Obama’s Clean Power Plan that regulates coal plants, Zindler said.

Data Source: Bloomberg New Energy Finance

This is exactly the sort of bridge the industry needed. The costs of installing wind and solar power have dropped precipitously—by more than 90 percent since the original tax credits took effect—but in most places coal and natural gas are still cheaper than unsubsidized renewables. By the time the new tax credit expires, solar and wind will be the cheapest forms of new electricity in many states across the U.S.

The tax credits, valued at about $25 billion over five years, will drive $38 billion of investment in solar and $35 billion in wind through 2021, according to BNEF. The scale of the new projects will help push costs down further and will stimulate new investment that lasts beyond the extension of the credits.

Few people in the industry expected a five-year extension. Stocks soared. SolarCity, the biggest rooftop installer, surged 34 percent yesterday. SunEdison, the largest renewable-energy developer, climbed 25 percent, and panelmaker SunPower increased 14 percent.

Congress is expected to vote by the end of this week on the tax credits as part of a broader budget deal that also lifts the 40-year-old ban on U.S. oil exports. Oil producers have lobbied for years to lift the ban, but it isn’t likely to significantly affect either consumption of oil or deployment of renewables. Leaders from both parties reached an agreement on the bill late Tuesday.

The 30 percent solar tax credit was set to expire next year and will now extend through 2019 before tapering to 10 percent in 2022. The wind credit had expired at the end of 2014, and the extension will be retroactively applied from the start of 2015 through 2019, declining in value each year.

Wind power has had an especially tumultuous relationship with U.S. lawmakers, who have kept the industry’s credits alive through a disruptive ping-pong game of short-term extensions every year or two. “You open manufacturing plants and then you close them. And then you open them and you close them,” BNEF’s Zindler said. “It’s economically inefficient. This will give them a good five-year line of sight on what the market will look like, and that’s really important.”

Bloomberg

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No cause to celebrate Paris climate agreement

December 21, 2015 Webmaster

Sir Ronald Saunders

Small island states lost out to their larger, more industralised seniors at COP21.

The results of the climate change conference in Paris (COP21) give no reason for small island states to cheer. The agreement reflects many promises and little action.

The one item of concrete action is merely an undertaking to evaluate carbon emissions every five years — and even that has no teeth.

What is not in the agreement is a firm, legally binding commitment to limit average global temperature increases to 1.5 degrees Celsius. Also, not in the agreement is a legally binding commitment to provide developing countries with the funds needed to adapt to, and mitigate against the effects of climate change.

There isn’t even a commitment to a fund, in the sum of US$100 billion a year, that was frequently touted before the conference began.

Once again, the industrialised nations of the world — the worst polluters — took advantage of the weakness of the smallest countries of the world, which are the least polluters and the biggest victims of climate change.

To their credit, though, through the Alliance of Small Island States (AOSIS), representatives of small states did put up a good showing in Paris. Armed with the latest statistics and bolstered by a structured expert report released by the UN Framework Convention on Climate Change, they argued for the containment of global warming to 1.5 degrees Celsius, showing that, at 2 degrees, destruction would be widespread and irreversible. But, in the end, despite all the hoopla, applause and celebration, small states lost.

Representatives of AOSIS countries might have been flattered by a brief visit to them by US President Barack Obama, when he declared: “These nations are not the most populous nations, they don’t have big armies, they have a right to dignity and sense of place.” But, while President Obama was undoubtedly sincere in what he said, he also knew, even as he was saying it, that he could not deliver ratification by the US Congress of any agreement that limited carbon emissions or bound the US legally to warming no higher than 1.5 degrees Celsius.

So, the world has a so-called agreement, still to be ratified by the 196 participating countries, that only expresses an objective to limit global warming to “well below two degrees above pre-industrial levels”. The goal of 1.5 degrees Celsius, as described by Amber Rudd, the British minister for energy and climate change, is merely “aspirational”. In making her statement that the target of 1.5 degrees is aspirational, the minister was sending a clear signal to the British industrial world that driving down carbon emissions from fossil fuels is not an immediate objective and therefore will not affect their business.

In truth, the climate change action plans submitted by 188 countries would lead to a temperature rise as high as 2.7 degrees Celsius. And, if that is not bad enough, the signatories to the Paris agreement are under no legal obligation even to meet that objective; they are legally free to enlarge carbon emissions further. So, no cause for small island states to celebrate over that one, and profound reason for them to worry.

At three degrees, the size of islands will shrink, productive areas will be under water, people will have to move habitats inland and many will be forced to migrate, legally and illegally. We have to hope that all the scientists who predict this scenario are wrong.

On the money side, the developed countries declined to insert into the Paris agreement their often-made oral commitments to transfer funds to poorer countries in order to help them adapt. Yet, all the studies show that even the US$100 billion a year that was promised would not be enough to help developing countries build up a power system quickly or cheaply enough on renewable energy sources rather than coal or oil. Incidentally, even if the US$100 billion a year fund was achieved, access to it by small states in the Caribbean would be long and arduous, particularly if the criterion of “per capita” income continues to be applied as it is now by international financial institutions. The portion available to the Caribbean region would be a small fraction of the total sum.

Some may argue that there are two aspects of the Paris agreement that are beneficial to small states, therefore, attention should be paid to them. The participating countries recognised “the importance of averting, minimising and addressing loss and damage associated with the adverse effects of climate change, including weather events and slow onset events”. But, liability is completely ignored because it was opposed by the polluting industrialised countries. Recognition of a problem is far removed from committing to action to cure it.

Then there is the single binding legal requirement in the agreement. Every country is now required to come back every five years with new targets for reducing their carbon emissions. But there is no sanction if they fail to meet their previous commitment, and no sanction if they simply carry on business as usual.

COP21 in Paris may have been a triumph for some nations, but no self-respecting small island State should claim any satisfaction.

That is why each small State, individually and within the many organisations in which they are members — including AOSIS, the Commonwealth, La Francophonie, the Organization of American States and others — must now redouble their efforts to work on the developed country governments, but also to move beyond them to the conscience of the people of the industrialised world.

This is about survival and development — two defining challenges of this century for small states. It is the work of everyone; governments, businesses and civil society, all are involved and all could be consumed.

Sir Ronald Sanders is Antigua and Barbuda’s ambassador to the US; an international affairs consultant; as well as senior fellow at Massey College, University of Toronto, and the Institute of Commonwealth Studies, London. The views expressed are his own. For responses and to view previous commentaries:

www.sirronaldsanders.com.

The Observer

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Congress Passes Tax Credits for Solar and Wind: ‘Sausage-Making at Its Most Intense’

December 18, 2015 Webmaster

The biggest federal policy development of the year for renewables plays out on Congress’ last day of work in 2015.

Lawmakers in the House and Senate passed a spending package today that includes multi-year extensions of solar and wind tax credits, plus one-year extensions for a range of other renewable energy technologies.

The pair of bills, which included tax extenders and $1.1 trillion in funding to keep the government running for the next year, passed hours before lawmakers adjourned for the holidays.

“May the force be with you,” said Senator Dianne Feinstein, urging her fellow Senators to vote in favor of the package shortly after the House approved the bills.

The force was certainly with renewables.

Under the legislation, the 30 percent Investment Tax Credit (ITC) for solar will be extended for another three years. It will then ramp down incrementally through 2021, and remain at 10 percent permanently beginning in 2022.

The 2.3-cent Production Tax Credit (PTC) for wind will also be extended through next year. Projects that begin construction in 2017 will see a 20 percent reduction in the incentive. The PTC will then drop 20 percent each year through 2020.

Also included were geothermal, landfill gas, marine energy and incremental hydro, which will each get a one-year PTC extension. Those technologies will also qualify for a 30 percent ITC, if developers choose. In addition, the bill expanded grants for energy and water efficiency.

Business groups and analysts say the extensions will support tens of billions of dollars in new investment and hundreds of thousands of new jobs throughout the U.S.

“There’s no way to overstate this — the extension of the solar ITC is the most important policy development for U.S. solar in almost a decade,” said MJ Shiao, GTM’s director of solar research.

According to GTM Research, the ITC extension will help spur nearly 100 cumulative gigawatts of solar installations by 2020, resulting in $130 billion in total investment. More than $40 billion of investment will be “directly attributable to the passage of the extension,” said Shiao.

The American Wind Energy Association expects similar growth. The group did not issue precise figures, but said the PTC extension would support tens of gigawatts of new wind projects through 2020.

The legislation also lifts a 40-year ban on exports of crude oil produced in the U.S. In exchange for lifting the ban, Democrats pushed for multi-year extensions of renewable energy tax credits and demanded that Republicans strip out any riders that would weaken environmental laws.

Both sides got what they wanted.

However, Pelosi publicly worried yesterday that she didn’t have enough votes to support the bill. Many Democrats expressed concern about the oil export ban tradeoff, saying it would increase subsidies to fossil fuels and boost carbon emissions.

Congressional leaders and the White House lobbied hard to convince the Democratic base that the bill would be a win for the environment.

“While lifting the oil export ban remains atrocious policy, the wind and solar tax credits in the Omnibus will eliminate around 10 times more carbon pollution than the exports of oil will add,” wrote Pelosi in a letter to lawmakers.

Katherine Hamilton, a partner with 38 North Solutions, called the bill “sausage-making at its most intense.”

“The product should be palatable for most parties in clean energy. Extensions for renewables and efficiency tax credits were key sweeteners. In addition, clean energy R&D funding, land and water conservation funds, and clean energy funds were included in the deal,” she said.

Other independent analysts found that the deal would be a net positive for the climate. Although emissions would increase slightly because of increased drilling activity, they would be easily offset by increasing renewable energy development and decreased coal consumption.

“Our bottom line: Extension of the tax credits will do far more to reduce carbon dioxide emissions over the next five years than lifting the export ban will do to increase them. While this post offers no judgment of the budget deal as a whole, the deal, if passed, looks like a win for climate,” wrote Council on Foreign Relations fellows Michael Levi and Varun Sivaram.

The tax credit extensions cap a big month for renewable energy policy.

In early December, world leaders agreed to a framework for lowering global greenhouse gas emissions — a deal that will leverage hundreds of billions of dollars in private investment for clean technologies.

And earlier this week, California regulators issued a new proposal on net metering that would preserve the retail rate paid to rooftop solar systems. The new rules — combined with the continued federal tax credit — will ensure strong activity in the top solar state.

National groups will now likely reset their sights on local battles around the U.S., said Hamilton.

“The renewable energy industries can turn their focus to state and local policies, siting and permitting issues, and compliance strategies for the Clean Power Plan,” she said.

President Obama is expected to sign the bill into law today.

Greentech Media

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JPS To Offer Prepaid Meters Islandwide Next Year

December 18, 2015 Webmaster

A Jamaica Public Service technician at work seeking to regularize electricity supply in Denham Town, Kingston.

Utility provider Jamaica Public Service (JPS) will offer prepaid service in all parishes next year, but expects power consumption to dip slightly in the process.

The prepaid service will become available to all residential customers who opt for it, but will not initially be offered to commercial customers.

“By the end of 2016, we will offer prepaid meters to all parishes,” JPS President Kelly Tomblin told the Financial Gleaner in a telephone interview this week. “That’s our goal – to focus on residential customers.”

She explained that the service will eventually launch an app that will allow persons to top-up their accounts on their telephones or other devices.

Expectations of reduced revenues

Tomlin said the prepaid meter service is expected to reduce total revenues to JPS because of an expected reduction in consumption. However, the savings should give customers more disposable income to spend or save.

“It will help to grow the economy because if you use less (energy), then you have more money to spend, which helps the economy,” Tomblin said.

JPS introduced a prepaid electricity service as an option as part of the fulfilment of its pledge to find alternative energy solutions for all Jamaicans.

“It is intended for those Jamaicans who have asked us for a payment option that can better assist them in predicting and budgeting for their electricity bills. Although new to Jamaica, prepaid electricity is a standard service product offered by many electric utilities the world over for decades,” JPS said in response to Financial Gleaner queries.

To introduce the service, JPS opted to do a limited pilot of the programme across Kingston, St Andrew and St Catherine, which the company intends to use to tweak the product before a wider roll-out across the island in 2016.

JPS added that the service is currently available to all residential and Rate 20 (general services/small commercial) customers and potential customers across Kingston, St Catherine and St Andrew.

“Prepaid electricity service was never designed, and is not intended, as a tool to fight electricity theft,” the JPS said.” It has, however, proved to be a very effective tool for budget-conscious customers who want more control to tailor their consumption to match how much they have to spend at any given time,” the company added.

JPS made US$23.7 million in net profit over nine months ending September 2015 on revenues of US$583 million, which nearly doubled the US$12.5 million in profit earned a year earlier. The light and power provider said that it requires a new tariff to be approved by the Office of Utilities Regulation (OUR) as prepaid is a new and different service from the normal post-paid payment solution.

“Designing and developing a new tariff for a new utility service can be a complex matter and JPS and the OUR have been in discussions for many months on the subject,” said the JPS communications department. “This involved JPS making submissions to the OUR, showing different forecasts of what we believe the demand for the new service will be over time and the impact this will have on revenues, depending on the rate and structure of the tariff design,” it added.

The Gleaner

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JPS Closing Negotiations With Alternate Bidder For 190mW Project

December 18, 2015 Webmaster

The Jamaica Public Service Company Ltd (JPS) has made good on its pledge to activate alternative plans to ensure the execution of the proposed 190-megawatt power plant at Old Harbour in St Catherine.

Yesterday, the light and power company said it was now in the final stages of negotiations with an alternate bidder to provide engineering, procurement and construction services, for the plant to be built in Old Harbour, St Catherine.

The original preferred bidder, Abengoa, was selected through a competitive tender process, with the assistance of two international consulting firms, AMEC Foster Wheeler and Power Engineers Collaborative LLC.

In November, the Spanish firm filed for protection from creditors – a possible first step towards filing for bankruptcy.

With the announcement of Abengoa’s financial challenges, JPS has been closely watching the progress of the Spanish company’s financial-restructuring plan.

However, Abengoa has not been able to provide the financial assurances required as a normal part of the process of confirming a bidder.

Kelly Tomblin, JPS president and chief executive officer, said: “We are very close to concluding key terms with one of our alternate bidders. Throughout this time, we have been working closely with the Electricity Sector Enterprise Team (ESET), so they are embedded in the process.”

Commenting on the importance of the project to Jamaica, Tomblin said: “We want to make it very clear that this project is not, and has never been, in danger. JPS shareholders (EWP and Marubeni) are the ones who have committed to bringing equity to the project, and there is keen interest and indicative commitment from a variety of financing sources. I want to make it very clear that the bidder on this project is not the financier. They are an engineering, procurement and construction firm, who will be subject to significant oversight and potential penalties for non-performance. We need to clear up any confusion on their role.”

The Gleaner

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CURE taking JPS case to Privy Council

December 15, 2015 Webmaster

The Privy Council in London comforts foreign investors.

THE Court of Appeal yesterday gave lobby group Citizens United for the Reduction of Electricity (CURE) final leave to take its fight regarding the Jamaica Public Service’s (JPS) exclusive licence to the UK-based Privy Council.

The appellate court, in March of this year, gave CURE provisional leave to appeal to the Privy Council, Jamaica’s final court of appeal.

Cure is challenging the Court of Appeal decision, in January, to overturn a ruling by the Supreme Court that the JPS’s exclusive licence to provide electricity across the island was invalid.

In October 2012, Justice Bryan Sykes ruled that the exclusive aspect of the 20-year all-island licence, issued by the then energy minister to JPS in 2001, was invalid.

Alternative Energy Electricity News

High energy costs push NIC towards alternative power sources

December 15, 2015 Webmaster

As is the case with most local operations, the National Irrigation Commission (NIC) says energy eats up a large chunk of its operational expenses, with the State-run company spending close to $500 million on electricity in 2014/2015.

This accounted for 40 per cent of its operating costs, and already for this year, the commission’s electricity bill is at 47 per cent of operational costs. “So it is increasing as we bring on additional areas. Once there is a drought, then we have to increase the amount of pumping that is done in each of these districts. In some areas, for some months the electricity cost is greater than the revenue that we generate,” NIC Managing Director Mark Richards explained at yesterday’s

Jamaica Observer Monday Exchange.

The NIC provides irrigation services mainly to the agricultural sector, and to a lesser extent industrial and commercial operations in Yallahs, St Thomas; Rio Cobre and Colbeck in St Catherine; central clarendon; New Forest and Duff House, in Manchester; Braco, Trelawny; Hounslow and Beacon/Little Park, in St Elizabeth; and Seven Rivers in St James

“Our electricity cost is one of the significant challenges that we operate under. We are the second-biggest consumer and payee of the JPS. For the year so far up to October, we are at $330 million. So it’s a challenge [and]we are looking at different energy management strategies and engineering strategies [such as] retrofitting our pumps [and] scheduling of our flows in order to better match the service to deal with the demand,” Director of Technical Services Milton Henry explained.

Henry said the commission faces a peculiar challenge, as while energy prices are trending down, the NIC has to be ramping up its operations to satisfy increasing demand for irrigated water.

“Every system we bring on is contributing to our cost, and we have not been able to pass on those costs to our farmers; so as we partner with them, we are saying let us find some more efficient approaches. We have had quite a bit of success… we have grown our business at a time of major challenges and continue to do so,” Henry said, noting that the NIC’s customer base has doubled from 1,265 in 2006 to 2,349 in 2014.

The NIC has moved to cut down on energy costs by retrofitting 15 of its stations with energy-saving devices. It is also looking to solar and wind energy sources. “So far we did a wind study in Manchester with a view to putting in a five megawatt capacity which would meet a significant portion of our demand. The study has been completed and shows that it is feasible. We are expected to move to the next phase… with some urgency,” he said.

The NIC is also eagerly awaiting the resumption of net billing, which the JPS suspended in May to carry out a review of the two-year pilot programme. The assessment which was conducted by the United States’ National Renewable Energy Laboratory has been completed, but up to last month the energy ministry was not able to tell stakeholders in the solar energy sector exactly when the programme would resume.

Jamaica Observer

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16 win UN ClimateSolutions Award

December 11, 2015 Webmaster

A solar panel on a thatch roof in Sub-saharan Africa is part of the Azuri PayGo Energy project, which provides eight hours of emission-free lighting each day and enough power to charge cellphones. Users pay a one-time installation fee and top-up as their needs demand.

PARIS, France (UNFCCC) – Sixteen game-changing initiatives from around the world were honoured as winners of a prestigious United Nations climate change award at a special ceremony at the United Nations Climate Change Conference in Paris, on yesterday evening.

“These ‘Lighthouse Activities’ shine a light on the groundswell of climate action around the world,” said UN Secretary-General Ban Ki-moon in a keynote address. “As the world moves toward a future built on low-emissions sustainable development, these bold ideas can inspire leaders to be more ambitious in their own policies and actions.”

The Momentum for Change initiative is spearheaded by the UN Climate Change Secretariat to shine a light on some of the most innovative, scalable and replicable examples of what people are doing to address climate change. This year’s winning activities range from a seriously cool smartphone that puts social values first, to an initiative that is enabling 40 Latin American cities to take concrete climate action.

“I am honoured to celebrate the leadership shown by the people, organisations, companies, and governments recognised as winners of the 2015 Momentum for Change Awards tonight,” UNFCCC Executive Secretary Christiana Figueres said.

“By showcasing these remarkable solutions and the people behind them we can strengthen efforts that must not only start with an agreement here in Paris, but must continue to build, as we accelerate the global transition to a low-carbon, highly resilient development path,” she said.

To help celebrate and recognise the achievements of the 2015 Lighthouse Activities, attendees at the gala event were treated to powerful photos, inspirational videos and a lively musical performance by Sean Paul.

M Sanjayan, a conservation scientist, writer and Emmy-nominated television news contributor, introduced Conservation International’s newest video in its critically acclaimed Nature for Speaking series, titled Home. Bertrand Piccard, Solar Impulse CEO and UNEP Goodwill Ambassador, served as the evening’s master of ceremonies.

“Modern clean technologies have transformed the expensive problem of climate change into a profitable opportunity,” said Dr Piccard. “A global economy that is powered by renewable energy, implements energy efficient and minimises waste will not only tackle climate change, but will also generate health, job creation and profit in the communities where they take place.”

Each of the 16 winning activities touches on one of Momentum for Change’s four focus areas: Urban Poor, Women for Results, Financing for Climate Friendly Investment, and ICT Solutions. All 16 were showcased at a series of special events during the UN Climate Change Conference.

They are:

Urban Poor

•E-waste: From Toxic to Green, India: Creating jobs to keep e-waste out of landfills

•Solvatten Solar Safe Water Heater — Kenya: Reducing emissions while securing access to safe drinking water

•Emerging and Sustainable Cities Initiative | Latin America & the Caribbean: Supporting sustainable growth in emerging cities

Women for Results

•Fostering Cleaner Production — Colombia: Reducing emissions in manufacturing

•Harvesting Geothermal Energy — El Salvador: Generating income with geothermal waste-heat

•Planting Trees to Save the Mangrove — Guinea: Establishing women-led groups that protect forests and generate income

•SELF’s Solar Market Gardens — Benin: Empowering women farmers through solar drip irrigation

Financing for Climate Friendly Investment

•Azuri PayGo Energy — Africa: Innovating pay-as-you-go energy systems for rural homes

•Deforestation-free Cocoa — Peru: Using a carbon-asset-backed loan to protect forests and produce cocoa

•Microsoft Global Carbon Fee — Global: Transforming corporate culture by putting a price on carbon

ICT Solutions

•ChargePoint Electric Vehicle Charging Corridors — United States of America: Building a network of electric vehicle express charging stations

•Enabling Farmers to Adapt to Climate Change — Uganda: Using ICT solutions to build resilience

•Fairphone — The Netherlands: Producing a phone that improves lives and the environment

•Lifelink Water Solutions — Kenya and Uganda: Using ICT tools to provide safe, sustainable and affordable water

•Mapping Exposure to Sea Level Rise — Tonga, Samoa, Vanuatu and Papua New Guinea: Preparing for risk with online spatial tools

•Mobisol Smart Solar Homes — Rwanda and Tanzania: Powering homes with solar energy

The 2015 Lighthouse Activities were selected by an international advisory panel as part of the secretariat’s Momentum for Change initiative, which is implemented with the support of the Bill & Melinda Gates Foundation and The Rockefeller Foundation, and operates in partnership with the World Economic Forum and the Global e-Sustainability Initiative.

Jamaica Observer

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Coalition urges action to phase out fossil fuel subsidies

December 7, 2015 Webmaster

Members of the Jamaican delegation to COP21 at the Wider Caribbean Pavilion (from left) Ambassador Sheila Sealy Monteith, under secretary for the Multilateral Affairs Division at the Ministry of Foreign Affairs and Foreign Trade; Vilma McNeish, ambassador to the Kingdom of Belgium and the European Union; Senator Arnold J Nicholson, minister of foreign affairs and foreign trade; Dr Orville Grey, senior technical officer in the Ministry of Water, Land, Environment and Climate Change; and Jeffrey Spooner, head of the Meteorological Service of Jamaica.

PARIS, France — An unprecedented coalition of close to 40 governments, hundreds of businesses and influential international organisations have called for accelerated action to phase out fossil fuel subsidies, a move that would help bridge the gap to keep global temperature rise below 2°C and perhaps close to the 1.5°C for which Caricom and other Small Island Developing States are advocating.

On the opening day of the UN Conference on Climate Change (COP21) last week, New Zealand Prime Minister John Key formally presented the Fossil Fuel Subsidy Reform Communiqué to Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change (UNFCCC), on behalf of the Friends of Fossil Fuel Subsidy Reform, The Prince of Wales Corporate Leaders Group and other supporters of the communiqué.

The communiqué calls on the international community to increase efforts to phase out perverse subsidies to fossil fuels by promoting policy transparency, ambitious reform and targeted support for the poorest.

Governments spend over $500 billion of public resources a year to keep domestic prices for oil, gas and coal artificially low. Removing fossil fuel subsidies would reduce greenhouse gas emission by 10 per cent by 2050. It would also free up resources to invest in social and physical capital like education, healthcare and infrastructure, while levelling the playing field for renewable energy.

“Fossil fuel subsidy reform is the missing piece of the climate change puzzle,” Prime Minister Key said. “It’s estimated that more than a third of global carbon emissions, between 1980 and 2010, were driven by fossil fuel subsidies. Their elimination would represent one-seventh of the effort needed to achieve our target of ensuring global temperatures do not rise by more than 2°C. As with any subsidy reform, change will take courage and strong political will, but with oil prices at record lows and the global focus on a low carbon future, the timing for this reform has never been better.”

In accepting the communiqué, Figueres said: “These subsidies contribute to the inefficient use of fossil fuels, undermine the development of energy efficient technologies, act as a drag on clean, green energy deployment and in many developing countries do little to assist the poorest of the poor in the first place.

“The huge sums involved globally could be better spent on schools, health care, renewable energies and building resilient societies. The current, very low oil prices are a good opportunity to really get going on this issue.”

Chair of The Prince of Wales Corporate Leaders Group (CLG) and former president of Alstom Power, Philippe Joubert, also spoke last Monday.

“The CLG’s long-standing efforts to put a price on carbon, including most recently working with the World Bank through the Carbon Pricing Leadership Coalition, will soon deliver results. It doesn’t make sense that, at the same time, governments artificially deflate the cost of coal, oil and gas, the primary cause of GHG emissions. Fossil fuel subsidies must be ended to stop this contradiction and enhance a real transition to low carbon energy,” he said.

For the OECD’s part, Secretary-General Angel Gurría commented that countries need to demonstrate their seriousness about combating climate change with concrete actions and policies.

“Reforming harmful fossil-fuel support is a good place to start,” Gurría stressed.

Close to 40 countries have endorsed the Fossil Fuel Subsidy Reform Communiqué, including Canada, Chile, France, Germany, Italy, Malaysia, Mexico, Morocco, Peru, The Netherlands, The Philippines, Samoa, the United Kingdom, the United States, Uganda, and Uruguay.

The communiqué is supported by The Prince of Wales’s Corporate Leaders Group (23 global companies employing two million people worldwide with combined revenues exceeding US$170 billion) and other business organisations working with thousands of corporations and investors, including The B Team, the World Business Council for Sustainable Development and the We Mean Business coalition.

The communiqué has also been endorsed by influential international organisations, including the International Energy Agency, the OECD and the World Bank.

Eliminating fossil fuel subsidies can accelerate the economic shift needed to tackle climate change and remove one of the obstacles to delivering the low-carbon future for which COP21 is aiming.

“History will prove fossil fuel to be a dead end,” Stefan Löfven, prime minister of Sweden, said. “Sweden will be amongst the first fossil-free welfare nations of the world. And eliminating fossil fuel subsidies is an important step on this path.”

Hakima El Haite, Morocco’s environment minister and candidate for the presidency of COP22, added: “Not only do fossil fuel subsidies put a strain on government coffers but they also don’t help the poorest of society.”

COP21 began on November 30 and will run until Friday, December 11.

Jamaica Observer

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OPEC Keeps Oil Production At Current High Level

December 7, 2015 Webmaster

Nigeria’s Minister of State for petroleum resources and President of the OPEC conference Emmanuel Ibe Kachikwu (left), and OPEC’s secretary general Abdalla Salem El-Badri of Libya attend a news conference after a meeting of the Organisation of the Petroleum Exporting Countries, OPEC, at their headquarters in Vienna, Austria, Friday, December 4, 2015.

OPEC nations decided on Friday to keep producing oil at their current high levels, effectively acknowledging their inability to push up crude prices.

An attempt to nudge the cost of oil higher would have involved lowering output. Instead, the organisation’s endorsement of present output, which is more than 1.5 million barrels a day above the formal ceiling of 30 million barrels, is likely to push the price of oil down further.

The ministers of the Organis-ation of the Petroleum Exporting Countries appeared to have little choice. Major producing nations in the cartel were opposed to reducing output. Instead, OPEC is poised to produce more oil.

Iran, which once pumped around four million barrels a day and is now down to about half that, is preparing to come back fully on line once it sheds nuclear-related sanctions in a few months.

Senior oil official Amir Hossein Zamaninia said last week Iran hopes to bring an extra 500,000 barrels on the market by early next year. He said he hopes the extra output will be accommodated within OPEC’s formal ceiling of 30 million barrels a day.

Arriving for Friday’s meeting, Iranian oil minister Bijan Namdar Zanganeh said Iran is ready to discuss a ceiling for its production but only after his country makes a “full return to the market.”

Iraq is also resurgent. The country has seen the fastest rise in crude production in the world this year. It was pumping more than 4 million barrels a day last month and was responsible for last month’s biggest monthly rise in output among all OPEC countries.

And the ministers agreed to readmit past member Indonesia, to expand their ranks to 13. While that country’s production goes mostly for domestic consumption, that move could also add some to the total amount of OPEC barrels on sale.

A final statement on the meeting was unusual in not mentioning any decision on production ceilings. But conference president Emmanuel Ibe Kachikwu told reporters that there was agreement to maintain “current actual production”, which is well above the formal ceiling set at 30 million barrels a day.

Friday’s news pushed oil prices down, with the US benchmark rate sliding 2.7 per cent on the day to US$39.99.

The decision effectively leaves it up to individual members how much crude to pump and was a strong signal of OPEC’s eroding ability to act as a group in efforts to influence supply, demand and prices.

Kachikwu acknowledged as much, telling reporters asking about Iran’s return: “At the end of the day every country has a sovereign right to bring to the marketplace its resources.”

“The logic is simple,” he said, of OPEC’s present clout in a market where non-members such as Russia and U.S. shale producers play an increasingly large role. “We are only 35 per cent of the producers and there are still 65 per cent out there.”

Some OPEC members are producing at their limit and like at previous meetings, the pressure was on swing-producer Saudi Arabia, which accounts for about a third of OPEC’s output, to cut back. But the desert kingdom remained opposed.

The Saudis already resisted cutbacks a year ago, a strategy calculated to put higher-cost outside competitors like United States shale oil producers out of business. The hope was that would eventually lead to a drop in supply and a rebound in prices.

That plan clearly hasn’t worked, with benchmark US crude’s value falling by more than 40 per cent over the past year and now hovering around the US$40 mark per barrel.

Cushioned by past profits on oil, the Saudis can hold out, even if production costs exceed sale revenues. Not so much some others.

Kachikwu, the conference president who also represented Nigeria at the meeting, acknowledged that continued low prices will hurt his country.

“There will be pain,” he said.

The Gleaner

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