kinesis
kinesis climate monitor
Indonesia sits on around 40% of the earth's geothermal potential.
3,628 Riau
225
Lampung
Bali
5,626
Indonesian Energy Geothermal Potential (megawatts)
REST OF WORLD 3.4%
7.9% EUROPE
3.7% REST OF ASIA
INDIA 9.4% CHINA 9.5%
Indonesian Geothermal In his opening speech at the World Geothermal Congress in April this year, President Susilo Bambang Yodhoyono announced that Indonesia aims to become the world’s largest user of geothermal energy. Indonesia holds 40% of the world’s geothermal energy reserves, equivalent to approximately 28,000 MW of power. Currently Indonesia produces only 1,100 MW through geothermal power generation. This equals just 4.2% of its total capacity. Indonesia intends to invest the equivalent of AUD $9.65 billion in projects and geothermal reserves to produce 2,885 MW of electricity. So far Indonesia has received technical assistance and low interest loans to enable it to pursue its geothermal ambitions from Germany, France,
India’s National Clean Energy Fund
ASIA 88.6%
JAPAN 39.8%
TAIWAN 9.9% KOREA 16.3%
Australian Coal Exports
AUSTRALIA'S BLACK COAL EXPORTS BY DESTINATION 2008–09 Source Australian Coal Association
27,140.5 MW
301
Jakarta West Java
O
TOTAL
2003 9,467.5 MW 4,613 MW 10,027 MW 728 MW 2,305 MW
1,911
2,855
ver the past month the media has focussed on the immediate politics of climate change, particularly, the Rudd Government’s decision to delay the introduction of the Carbon Pollution Reduction Scheme until at least 2013 and the introduction of the American Power Act in the US Senate. This edition of the Monitor ignores this and focuses on four examples of decisions and actions that are likely to achieve emissions reduction. These include two sub–state emissions trading schemes and two examples of decisions that will achieve emissions reductions without a price on carbon.
SPECULATIVE HYPOTHETIC POSSIBLE PROBABLE PROVEN
In the February 2010 budget the Indian Finance Minister, Pranab Mukherjee, announced the creation of a National Clean Energy Fund for the research and development of clean energy technology. The scheme will be funded by a tax of 50 rupees, approximately AUD $1.20 on every tonne of domestic and imported coal used in India. Business Week has reported that the tax could raise approximately 25 billion rupees or AUD $617 million. In announcing the scheme, Mukherjee stated that India “must ensure that the principle of ‘polluter pays’ remains the basic guiding criteria for pollution management”. The coal tax could have implications for Australia. India is the fifth largest importer of Australian coal and currently exports approximately 25 million tonnes of coal to
1,042
Issue 17, May 2010 the Netherlands, the Japan International Cooperation Agency, the World Bank and the Asian Development Bank. The President stated in his announcement that if Indonesia achieves its goal to produce 2,885 MW it will reduce its emissions by 17.3 million tonnes of carbon dioxide per annum. Indonesia aims to reduce its emissions by 26% by 2020 but has not stated a base year. The President has also stated that if sufficient international assistance is provided the target will be raised to 41%. WANT TO KNOW MORE?
To read President Susilo Bambang Yodhoyono’s announcement go to http://www.presidensby.info/index. php/pidato/2010/04/26/1384.html To read Indonesia’s letter to the UNFCCC secretariat of its intention to associate with the Copenhagen Accord go to http://unfccc.int/files/meetings/application/pdf/ indonesiacphaccord.pdf
India per year. The tax could therefore cost Australian coal exporters approximately AUD $30 million per year. Although the tax is currently low and the same for both domestic and imported coal, this could increase, potentially costing Australia an even greater proportion of revenue from its coal exports. Further, if other coal importing countries follow suit then there is potential for Australia’s primary export to become less profitable.
WANT TO KNOW MORE?
To read Pranab Mukherjee’s budget announcement, including details of the National Clean Energy Fund see http://indiabudget.nic.in/ub2010-11/bs/speecha.htm For Business Week’s report go to http://www. businessweek.com/news/2010-02-26/india-to-startnational-clean-energy-fund-by-taxing-coal-use.html For details on where Australia exports its coal see http://www.australiancoal.com.au/the-australian-coalindustry_coal-exports_coal-export-details.aspx
kinesis climate monitor
Regional Greenhouse Gas Initiative Discussion of US climate policy has focused on attempts to pass a national scheme through the two houses of Congress. However, an emissions trading scheme has been operational in the US since 2008. The Regional Greenhouse Gas Initiative (RGGI) is an agreement between ten north eastern and mid–Atlantic states which make up almost 20% of the US economy. RGGI aims to reduce the greenhouse gas emissions from these states’ power plants by 10% below 2008 levels by 2018. The power plants included in the scheme provide approximately 95% of the region’s electricity requirements. RGGI is based on a cap and trade emissions trading scheme. Electrical generators are required to hold greenhouse gas emissions allowances equal to their emissions over a three year control period. Emissions allowances are sold to the generators during quarterly auctions. RGGI auctions 100% of its allowances. None are distributed freely. Each year the total number of
Tokyo Emissions Trading Scheme In the lead up to the Copenhagen Conference, Japan committed to reducing its greenhouse gas emissions by 25% below 2005 levels by 2020. Although Japan has trialled a voluntary emissions trading scheme since April 2006 it had not yet implemented its planned mandatory scheme to help it to meet its emissions reduction target. The draft climate–protection law released in March, which was expected to outline the mandatory scheme, has been criticised as lacking detail. Instead, the Japanese Government has proposed to spend the next year drafting separate legislation to design a cap and trade scheme. It has been speculated that the lack of commitment from the Japanese Government to put forward a mandatory emissions trading scheme was caused by unresolved debate between cabinet and other
1,400 of Tokyo’s most energy and carbon intensive organisations are to meet legally binding emissions targets
allowances auctioned will be reduced until a 10% reduction is achieved in 2018. As part of the memorandum of understanding between participating states, ( http://rggi.org/docs/mou_12_20_05.pdf) 25% of the funds raised through the auctioning of allowances must be used for consumer benefit or strategic energy purpose. These include promoting energy efficiency, promoting renewable or non-carbon-emitting energy technologies or directly mitigating electricity ratepayer impacts. So far, $538 million in auction proceeds have been distributed to state energy programs. As the cap on emissions tightens, these funds will continue to go towards additional measures to reduce each state’s emissions. By auctioning permits RGGI has the dual benefit of driving emissions reductions amongst the participating electricity generators, as well as providing revenue to fund further reductions beyond the scope of the scheme. RGGI is one of three regional emissions trading schemes currently being established in the US. On the West Coast, six US states and four Canadian Provinces have joined to form
ministries and pressure from Japanese industry. Despite the confusion surrounding national action, the Tokyo Metropolitan Government has begun the implementation of its own mandatory emissions trading scheme. Announced in the Tokyo Climate Change Strategy 2007, it will be the first emissions trading scheme in operation in Asia. The scheme, which commenced in April 2010, will require 1400 of Tokyo’s most energy and carbon intensive organisations to meet legally binding emissions targets. For the initial phase of the scheme, which will run until 2014, organisations will be required to reduce their greenhouse gas emissions by 6%. After 2011 organisations which fail to operate within their emissions budget will be required to purchase emissions allowances to cover their excess emissions. Tokyo’s scheme ultimately aims to reduce the emissions of participating businesses by 25% below 2000 by 2020.
the Western Climate Initiative. In the mid–west, six US states and one Canadian Province have formed the Midwestern Greenhouse Gas Reduction Accord. Analysis by Point Carbon has shown that a patchwork of state based market mechanisms, including RGGI, could meet 41% of the United States’ pollution–reduction commitments under the Copenhagen accord by 2020 and generate as much as $100 billion in revenue for clean energy investments at the state level.
WANT TO KNOW MORE?
To see the official RGGI website go to http://www.rggi.org For a detailed analysis of RGGI by Sean Pool from the Center for American Progress go to http://www. americanprogress.org/issues/2010/03/rggi_roadmap. html To read about the Western Climate Initiative see http://www.westernclimateinitiative.org/ For information on the Midwestern Greenhouse Gas Reduction Accord go to http://www.midwesternaccord.org/ To read the Point Carbon analysis (subscription required) see http://www. pointcarbon.com/research/cmana/cmana/1.1416963
WANT TO KNOW MORE?
To find the Tokyo Metropolitan Government’s official emissions trading scheme website go to http://www2. kankyo.metro.tokyo.jp/sgw/e/climate_cap.html To read a LA Times article on the Tokyo Government’s sustainability initiatives, including the emissions trading scheme, go to http://www.latimes.com/business/la-fi-green-tokyo20100423,0,4896892,full.story To read about Japan’s voluntary emissions trading scheme go to http://www. japanfs.org/en/pages/026919.html and http://www. japanfs.org/en/pages/026063.html To read more about the delay of Japan emissions trading scheme go to http:// www.businessgreen.com/business-green/news/2259063/ concerns-mount-vague-japanese and http://www.reuters. com/article/idUSTRE62A28720100311
www.kinesis.org Level 2, 255 Riley Street, Surry Hills telephone 02 8005 4290
Indonesia sits on around 40% of the earth's geothermal potential.
3,628 Riau
225
Lampung
Bali
5,626
Indonesian Energy Geothermal Potential (megawatts)
REST OF WORLD 3.4%
7.9% EUROPE
3.7% REST OF ASIA
INDIA 9.4% CHINA 9.5%
Indonesian Geothermal In his opening speech at the World Geothermal Congress in April this year, President Susilo Bambang Yodhoyono announced that Indonesia aims to become the world’s largest user of geothermal energy. Indonesia holds 40% of the world’s geothermal energy reserves, equivalent to approximately 28,000 MW of power. Currently Indonesia produces only 1,100 MW through geothermal power generation. This equals just 4.2% of its total capacity. Indonesia intends to invest the equivalent of AUD $9.65 billion in projects and geothermal reserves to produce 2,885 MW of electricity. So far Indonesia has received technical assistance and low interest loans to enable it to pursue its geothermal ambitions from Germany, France,
India’s National Clean Energy Fund
ASIA 88.6%
JAPAN 39.8%
TAIWAN 9.9% KOREA 16.3%
Australian Coal Exports
AUSTRALIA'S BLACK COAL EXPORTS BY DESTINATION 2008–09 Source Australian Coal Association
27,140.5 MW
301
Jakarta West Java
O
TOTAL
2003 9,467.5 MW 4,613 MW 10,027 MW 728 MW 2,305 MW
1,911
2,855
ver the past month the media has focussed on the immediate politics of climate change, particularly, the Rudd Government’s decision to delay the introduction of the Carbon Pollution Reduction Scheme until at least 2013 and the introduction of the American Power Act in the US Senate. This edition of the Monitor ignores this and focuses on four examples of decisions and actions that are likely to achieve emissions reduction. These include two sub–state emissions trading schemes and two examples of decisions that will achieve emissions reductions without a price on carbon.
SPECULATIVE HYPOTHETIC POSSIBLE PROBABLE PROVEN
In the February 2010 budget the Indian Finance Minister, Pranab Mukherjee, announced the creation of a National Clean Energy Fund for the research and development of clean energy technology. The scheme will be funded by a tax of 50 rupees, approximately AUD $1.20 on every tonne of domestic and imported coal used in India. Business Week has reported that the tax could raise approximately 25 billion rupees or AUD $617 million. In announcing the scheme, Mukherjee stated that India “must ensure that the principle of ‘polluter pays’ remains the basic guiding criteria for pollution management”. The coal tax could have implications for Australia. India is the fifth largest importer of Australian coal and currently exports approximately 25 million tonnes of coal to
1,042
Issue 17, May 2010 the Netherlands, the Japan International Cooperation Agency, the World Bank and the Asian Development Bank. The President stated in his announcement that if Indonesia achieves its goal to produce 2,885 MW it will reduce its emissions by 17.3 million tonnes of carbon dioxide per annum. Indonesia aims to reduce its emissions by 26% by 2020 but has not stated a base year. The President has also stated that if sufficient international assistance is provided the target will be raised to 41%. WANT TO KNOW MORE?
To read President Susilo Bambang Yodhoyono’s announcement go to http://www.presidensby.info/index. php/pidato/2010/04/26/1384.html To read Indonesia’s letter to the UNFCCC secretariat of its intention to associate with the Copenhagen Accord go to http://unfccc.int/files/meetings/application/pdf/ indonesiacphaccord.pdf
India per year. The tax could therefore cost Australian coal exporters approximately AUD $30 million per year. Although the tax is currently low and the same for both domestic and imported coal, this could increase, potentially costing Australia an even greater proportion of revenue from its coal exports. Further, if other coal importing countries follow suit then there is potential for Australia’s primary export to become less profitable.
WANT TO KNOW MORE?
To read Pranab Mukherjee’s budget announcement, including details of the National Clean Energy Fund see http://indiabudget.nic.in/ub2010-11/bs/speecha.htm For Business Week’s report go to http://www. businessweek.com/news/2010-02-26/india-to-startnational-clean-energy-fund-by-taxing-coal-use.html For details on where Australia exports its coal see http://www.australiancoal.com.au/the-australian-coalindustry_coal-exports_coal-export-details.aspx
kinesis climate monitor
Regional Greenhouse Gas Initiative Discussion of US climate policy has focused on attempts to pass a national scheme through the two houses of Congress. However, an emissions trading scheme has been operational in the US since 2008. The Regional Greenhouse Gas Initiative (RGGI) is an agreement between ten north eastern and mid–Atlantic states which make up almost 20% of the US economy. RGGI aims to reduce the greenhouse gas emissions from these states’ power plants by 10% below 2008 levels by 2018. The power plants included in the scheme provide approximately 95% of the region’s electricity requirements. RGGI is based on a cap and trade emissions trading scheme. Electrical generators are required to hold greenhouse gas emissions allowances equal to their emissions over a three year control period. Emissions allowances are sold to the generators during quarterly auctions. RGGI auctions 100% of its allowances. None are distributed freely. Each year the total number of
Tokyo Emissions Trading Scheme In the lead up to the Copenhagen Conference, Japan committed to reducing its greenhouse gas emissions by 25% below 2005 levels by 2020. Although Japan has trialled a voluntary emissions trading scheme since April 2006 it had not yet implemented its planned mandatory scheme to help it to meet its emissions reduction target. The draft climate–protection law released in March, which was expected to outline the mandatory scheme, has been criticised as lacking detail. Instead, the Japanese Government has proposed to spend the next year drafting separate legislation to design a cap and trade scheme. It has been speculated that the lack of commitment from the Japanese Government to put forward a mandatory emissions trading scheme was caused by unresolved debate between cabinet and other
1,400 of Tokyo’s most energy and carbon intensive organisations are to meet legally binding emissions targets
allowances auctioned will be reduced until a 10% reduction is achieved in 2018. As part of the memorandum of understanding between participating states, ( http://rggi.org/docs/mou_12_20_05.pdf) 25% of the funds raised through the auctioning of allowances must be used for consumer benefit or strategic energy purpose. These include promoting energy efficiency, promoting renewable or non-carbon-emitting energy technologies or directly mitigating electricity ratepayer impacts. So far, $538 million in auction proceeds have been distributed to state energy programs. As the cap on emissions tightens, these funds will continue to go towards additional measures to reduce each state’s emissions. By auctioning permits RGGI has the dual benefit of driving emissions reductions amongst the participating electricity generators, as well as providing revenue to fund further reductions beyond the scope of the scheme. RGGI is one of three regional emissions trading schemes currently being established in the US. On the West Coast, six US states and four Canadian Provinces have joined to form
ministries and pressure from Japanese industry. Despite the confusion surrounding national action, the Tokyo Metropolitan Government has begun the implementation of its own mandatory emissions trading scheme. Announced in the Tokyo Climate Change Strategy 2007, it will be the first emissions trading scheme in operation in Asia. The scheme, which commenced in April 2010, will require 1400 of Tokyo’s most energy and carbon intensive organisations to meet legally binding emissions targets. For the initial phase of the scheme, which will run until 2014, organisations will be required to reduce their greenhouse gas emissions by 6%. After 2011 organisations which fail to operate within their emissions budget will be required to purchase emissions allowances to cover their excess emissions. Tokyo’s scheme ultimately aims to reduce the emissions of participating businesses by 25% below 2000 by 2020.
the Western Climate Initiative. In the mid–west, six US states and one Canadian Province have formed the Midwestern Greenhouse Gas Reduction Accord. Analysis by Point Carbon has shown that a patchwork of state based market mechanisms, including RGGI, could meet 41% of the United States’ pollution–reduction commitments under the Copenhagen accord by 2020 and generate as much as $100 billion in revenue for clean energy investments at the state level.
WANT TO KNOW MORE?
To see the official RGGI website go to http://www.rggi.org For a detailed analysis of RGGI by Sean Pool from the Center for American Progress go to http://www. americanprogress.org/issues/2010/03/rggi_roadmap. html To read about the Western Climate Initiative see http://www.westernclimateinitiative.org/ For information on the Midwestern Greenhouse Gas Reduction Accord go to http://www.midwesternaccord.org/ To read the Point Carbon analysis (subscription required) see http://www. pointcarbon.com/research/cmana/cmana/1.1416963
WANT TO KNOW MORE?
To find the Tokyo Metropolitan Government’s official emissions trading scheme website go to http://www2. kankyo.metro.tokyo.jp/sgw/e/climate_cap.html To read a LA Times article on the Tokyo Government’s sustainability initiatives, including the emissions trading scheme, go to http://www.latimes.com/business/la-fi-green-tokyo20100423,0,4896892,full.story To read about Japan’s voluntary emissions trading scheme go to http://www. japanfs.org/en/pages/026919.html and http://www. japanfs.org/en/pages/026063.html To read more about the delay of Japan emissions trading scheme go to http:// www.businessgreen.com/business-green/news/2259063/ concerns-mount-vague-japanese and http://www.reuters. com/article/idUSTRE62A28720100311
www.kinesis.org Level 2, 255 Riley Street, Surry Hills telephone 02 8005 4290
