News March 2008

The following are summaries of news stories from the March 2008 print edition of Environmental Finance magazine

Bush mercury rules go up in smoke

A US court has struck down Environmental Protection Agency (EPA) plans to introduce a cap-and-trade scheme for mercury pollution from power plants.

On 8 February, the US Court of Appeals for the District of Columbia Circuit ruled that the EPA broke the law by failing to implement plant-by-plant cuts in mercury pollution in favour of a cap-and-trade regulatory scheme. “This [EPA] explanation [for the Clean Air Mercury Rule] deploys the logic of the Queen of Hearts, substituting EPA’s desires for the plain text” of the Clean Air Act, the court said in its ruling. More...  

ADB safeguard policy review under fire

The Asian Development Bank (ADB) is under pressure over plans to change the environmental and social standards projects must fulfil to receive a loan, after at least two NGOs quit the consultation process in protest.

“We believe that continuing consultations on the current, flawed draft would be an inappropriate use of limited time and resources,” Shefali Sharma, south Asia coordinator for the Asia programme at the Bank Information Center (BIC), said in a letter to the ADB. Sharma called for the bank to tear up the draft and start again. More...  

UK offsetting code leaves VERs in the cold

The UK government has announced a code of best practice for carbon offsetting, but has irked many firms in the business by backing only Kyoto Protocol-compliant credits. Voluntary or verified emission reductions produced outside the Kyoto Protocol – used by many UK offsetters – are excluded until industry can provide a “similar level of assurance about the standard of the credits”.

Environment secretary Hilary Benn said the code would help businesses and individuals to act on carbon emissions and understand offsetting. The code includes a table of emission factors for transport, addressing concerns that some ‘carbon calculators’ were estimating radically different levels of emissions for the same journey. Offset providers can apply to use a ‘kitemark’ indicating their products meet the code.

Carbon project pioneer applies for court protection

Dublin-based carbon project developer AgCert has applied to the Irish courts for protection from its creditors, under a process called ‘examinership’.

This will see the firm protected from its creditors for 70 days (extendable by 30 days) while a court-appointed examiner assesses the business and tries to devise a plan for restructuring. More...  

US renewables sector voices concerns as latest PTC extension stalls

US renewable energy associations are warning that the second recent failure to extend a crucial tax credit risks putting the brake on renewable energy investment, well ahead of its expiry at the end of this year.

In February, the latest attempt to extend the Production Tax Credit – by including it in the politically popular economic stimulus package – failed to pass the US Senate. If the 1.9 cents per kilowatt-hour credit is allowed to expire at the end of this year, it would be its fourth latency period in the past nine years. More...  

US carbon market could hit $1 trillion by 2020

The value of the US carbon market could reach $1 trillion in 2020, if the US closes the door to cheap international credits, says New Carbon Finance. Such a move would raise carbon prices to $40/tonne of carbon dioxide (CO2), adding 20% to power prices, 10% to the cost of natural gas and 12% to petrol prices at the pump.

However, allowing US firms to buy carbon credits from the international market would lower the average US carbon price to $15/t, saving the US economy $145 million each year, the London-based carbon market analysis company says. More...  

Banks to apply ‘Carbon Principles’ to power plant lending

Citi, JPMorgan Chase and Morgan Stanley have launched a set of guidelines to govern the way electricity generation projects are financed.

The banks have committed to using the ‘Carbon Principles’ as a framework for engaging with clients in the sector and gauging the carbon risk associated with conventional power plants. More...  

EDP plans renewables spin-off

Energias de Portugal (EDP) has announced plans to float around 25% of its renewable energy unit, despite the current unfavourable market conditions. However, analysts say the Portuguese utility is nonetheless likely to be able to pull off the deal.

EDP said on 28 January that it plans an initial public offering of EDP Renovaveis – which boasts 3.6GW of installed capacity – on the Lisbon Euronext in the second quarter of 2008. More...  

Bank of America sets up green investment group

Bank of America has announced the launch of an 'environmental strategic investments group', as part of its $20 billion environmental investment commitment.

The San Francisco-based group, to be headed by managing director Dick Cohen, will “work with the various lines of business to maximise green business opportunities and earn adequate risk-adjusted returns", a spokeswoman said. More...  

Investors sign up to $10bn climate action plan

Almost 50 institutional investors signed up to a ‘climate risk action plan’ last week, which includes a promise to plough $10 billion into clean technology within two years.

At a summit at the United Nations in New York, signatories also pledged to require asset managers, consultants and advisors to consider climate change risks and opportunities in their investment processes – for example by using a sustainability or climate risk screen. More...  

go to Features March 2008