News February 2006

The following are summaries of news stories from the February 2006 print edition of Environmental Finance magazine

EU governments likely to struggle with EU ETS plans

Many European governments are likely to struggle to provide the data required to support their plans for the second phase of the EU Emissions Trading Scheme, according to carbon market experts. The European Commission is insisting that the so-called ‘national allocation plans’, drawn up by each member state government, include precise information on the contribution of other policies and measures, outside the trading scheme, to reducing emissions, and evidence of government purchases of carbon credits from the international market.

“Some countries have not dedicated sufficient resources to quantify the impacts of other policies and measures,” says Abyd Karmali, head of the European climate change team at ICF Consulting in London. “And, for those that have, if can be very difficult to estimate reductions from things like increased energy efficiency directives.”

Questions are also being raised about the likely reliability of government projections on buying carbon credits from outside the scheme, via the Kyoto Protocol’s Clean Development Mechanism and Joint Implementation programmes.

D+: Banks must try harder, say NGOs

Even those banks with the most detailed social and environmental policies only deserve a D+ for their efforts, according to a survey by WWF and BankTrack, two NGOs.

The study – which assessed the policies of 39 international banks across a range of issues, from human rights to chemicals – welcomed recent developments in the banking sector’s approach to sustainability but said that firms needed to move beyond the Equator Principles and develop more detailed, bespoke policies.

California plans 3,000MW solar programme

The California Public Utilities Commission (PUC) approved a solar energy programme on 12 January that aims to stimulate 3,000MW of rooftop solar capacity by 2017.

The California Solar Initiative will provide $2.9 billion over 10 years, and the commission sees the plan as helping to meet Governor Arnold Schwarzenegger’s greenhouse gas reduction goals. The governor pushed a “Million Solar Roofs” programme in the legislature in 2005, but that bill died, so he redesigned the plan to be addressed by the PUC.

US investors unfazed by climate change

Only 20% of US institutional investors consider climate change to be ‘very’ or ‘somewhat’ important in investment terms, according to a survey by Mercer Investment Consulting. Although a further 37% of the respondents expected the issue to be important in five years time, it still ranked as the least relevant investment issue out of 12 social and environmental concerns, beneath water use, terrorism and employee relations.

Jane Ambachtsheer, the US-based head of Mercer’s responsible investment business, says that she was surprised by how low climate change ranked, especially given the attention it has received from major pension funds such as the California Public Employees Retirement System and initiatives such as the Investor Network on Climate Risk.

Asia-Pacific pact will allow emissions to double – WWF

The Asia-Pacific climate pact could lead to 23% fewer emissions of greenhouse gases (GHGs) by 2050 compared with projected levels, according to a report from an Australian government research agency. But conservation group WWF claims that the pact – which brings together the US, Japan, China, India, South Korea and Australia – will result only in a slowing of emissions growth and total global GHG emissions will continue to rise.

The Australian Bureau of Agricultural and Resource Economics report was released during the Asia-Pacific Partnership on Clean Development and Climate’s inaugural meeting in Sydney on 11–12 January. It estimates that savings of more than 90,000 million tonnes of carbon equivalent between 2006 and 2050 could be achieved through the efforts of the partnership. But, despite these savings, global GHG emissions would double by 2050, WWF says.

Critics line up against EPA’s toxic reporting plan

The attorneys general of 12 states have joined environmental and investment groups in urging the US Environmental Protection Agency (EPA) not to ease reporting requirements under the Toxic Release Inventory (TRI) programme. The TRI is a public EPA database that shows releases of toxic chemicals by certain industries and federal facilities.

The EPA has proposed a ‘Burden Reduction’ rule that is says will simplify reporting. The agency wants to allow companies that release up to 5,000 pounds annually to file a “short form” that does not provide details of their releases. That form may now only be used by emitters of 500 pounds or less.

Sempra sets up weather desk

Sempra Energy has opened a weather desk to hedge its own energy trading and offer hedges to wholesale energy buyers in North America.

The desk, which became operational towards the end of last year, is part of Sempra Commodities, based in Stamford, Connecticut, which includes Sempra Energy Trading.

It offers weather hedges to customers of Sempra Energy Trading in North America, which markets electricity, natural gas, crude and refined petroleum products, ethanol, natural gas liquids and coal.

US companies up renewable purchases

Three US companies – Whole Foods Market, FedEx Kinko’s and Walgreens – signalled their commitment to green energy by announcing major procurement programmes in early January.

Of these, the biggest commitment was made by Whole Foods Market, which became the first Fortune 500 company to offset all of its electricity use in the US and Canada with renewable energy certificates (RECs).

FedEx Kinko’s, which is part of the FedEx Group and provides printing and business services, has increased the number of RECs it purchases annually by 67.5% – or 40,000MWh – this year.

Pharmacist Walgreens, meanwhile, has taken a different approach. In a joint initiative with ImaginIt, a Denver-based solar energy supplier, it is to install solar panels at 112 of its 5,000 stores and at two distribution centres.The companies say that the panels will generate more than 13,800MWh of electricity per year, making it the largest solar power project in the US.

WilderShares, NEF launch clean energy index

WilderShares and New Energy Finance (NEF) have launched what they say is the first quoted equity index tracking clean energy stocks globally. The WilderHill New Energy Global Innovation Index (NEX) is designed to “act as a magnet for capital into the sector,” according to NEF chief executive Michael Liebreich.

NEX, calculated by the American Stock Exchange, comprises 86 constituents in 18 markets around the world “whose technologies and services focus on the generation and use of cleaner energy, conservation and efficiency, and advancement of renewable energy”.

Airtricity, Babcock make renewables acquisitions

Ireland’s Airtricity and Australia’s Babcock & Brown (B&B) have closed major renewable energy development acquisitions in recent weeks, the latest landmark transactions in the sector.

In December, B&B paid €490 million ($603 million) to acquire Portuguese developer Enersis, which has 620MW of wind and hydroelectric projects in operation or construction in Portugal, Spain and France, plus 360MW in development.

Meanwhile, in the US in December, Dublin-based Airtricity acquired Renewable Generation, which has about 1,000MW of wind projects in various stages of development in Texas, Colorado and New Mexico.

GRI opens consultation on draft guidelines

The Global Reporting Initiative (GRI) has released for consultation a draft version of its ‘third generation’ guidelines on sustainability reporting. The new guidelines, which can be found on a dedicated website, update the existing version drawn up in 2002. Their release follows a year of stakeholder consultation by the GRI and they incorporate a number of new features.

The GRI guidelines, first launched in 2000, are a globally applicable set of guidelines designed to help companies report on their social, environmental and economic impacts in a standardised manner and are, according to the GRI, used by more than 750 companies.

It says that the latest “innovations [are] intended to enhance the comparability, clarity, ease of use, and assurability of the guidelines and reports that are prepared using the guidelines.”

go to Features February 2006