News June 2009

The following are summaries of news stories from the June 2009 print edition of Environmental Finance magazine

US climate bill fight heads to committees, Senate

The US House of Representatives is likely to vote in favour of a greenhouse gas (GHG) cap-and-trade bill in the coming weeks, following a vote by a key committee last month. Attention is now turning to the Senate, amid speculation that compromises forged to win over Democrats in the House may lead to increased support among senators.

On 22 May, the House energy and commerce committee voted 33:25 to send the American Clean Energy and Security Act for a vote on the floor of the House. The bill would set caps on sources responsible for 85% of US GHG emissions from 2012, reducing them to 17% below 2005 levels by 2020, and 80% below by 2050. More... 

Climate negotiators enter final furlong

Government officials have begun substantive negotiations on a successor agreement to the Kyoto Protocol – due to be agreed in Copenhagen in December – following the publication of three draft negotiating texts last month.

Yvo de Boer, executive secretary of the UN Framework Convention on Climate Change, welcomed a near-complete list of post-2012 emission reduction pledges from industrialised countries, included in their submissions to the draft texts, but warned that the level of ambition is not high enough. More...  

Renewables sector sees spate of fund raisings

A number of renewable energy companies have successfully raised funds on the public markets, sparking hopes that conditions in the sector are on the up.

London-based analysts at New Energy Finance said the fund raisings may indicate that the first quarter of 2009 will mark the “low point” for clean energy investment in the aftermath of the financial crisis. “It does look as though the worst is past,” said NEF chairman and chief executive Michael Leibreich. More...

Weather risk market halves in 08/09 –WRMA

The notional value of transactions in the weather risk market in 2008/09 fell to $15.1 billion, less than half the previous year’s $32 billion, as the economic meltdown took its toll on risk capital, according to an annual survey by the Weather Risk Management Association.

The number of trades fell to approximately 601,000, compared with 985,000 the previous year, according to the survey, which runs from 1 April to 31 March. More... 

Despite Array, clouds on horizon for UK offshore wind

The UK government will have to extend its additional subsidy for offshore wind, or the industry will have to cut its costs, if the UK’s medium-term targets for renewable energy are to remain in sight, according to bankers and analysts.

This warning comes despite the news last month that the first 630MW phase of the world’s largest offshore wind farm, the London Array, will go ahead, after months of uncertainty regarding its economic viability. More...  

EBRD earmarks €3bn–5bn for sustainable energy

The European Bank for Reconstruction and Development (EBRD) has unveiled plans to invest €3 billion–5 billion ($4 billion–7 billion) in the second phase of its Sustainable Energy Initiative, over 2009–11. The SEI Phase 2 aims to attract private sector cofinancing of an additional €9billion–15 billion in efficiency and renewable energy projects, and reduce some 25 million–30 million tonnes of carbon dioxide emissions each year.

“This initiative is an integral part of the EBRD’s mission: dealing with endemic energy wastage; reducing the region’s dependence on imported energy; and responding to the overall global challenge of climate change,” said Thomas Mirow, EBRD president, at the launch in May. More... 

US biofuels package provides some relief for producers

US ethanol producers praised efforts announced last month by President Barack Obama’s administration to aid the struggling biofuels sector, but vowed to keep pushing to prevent the inclusion of indirect land-use change in the assessment of the environmental impacts of domestic ethanol production – a move that threatens the viability of much ethanol production.

The Environmental Protection Agency, the Department of Energy and the US Department of Agriculture announced initiatives to expand domestic biofuels supply and help distressed producers navigate the current financial crisis. More... 

Standard to aid companies on climate reporting

Corporations wanting to report data relevant to climate change now have a standard procedure to follow, with the launch of a draft framework by the Climate Disclosure Standards Board (CDSB) at the end of last month.

The CDSB was founded in 2007 to enhance corporate disclosure of climate change data for the benefit of shareholders and prospective investors. More... 

Carbon market doubled in value in 2008 – World Bank

The carbon market grew by 100% in value between 2007 and 2008, to more than $126 billion, according to the World Bank’s annual State and Trends of the Carbon Market report.

However, the World Bank found that primary transactions in the Kyoto Protocol’s project-based mechanisms – that is, direct purchases of carbon credits from Clean Development Mechanism and Joint Implementation projects – shrank in 2008, in both volume and value terms. More... 

CCX leads doubling of voluntary market volumes

Voluntary carbon markets doubled in size and value in 2008, consistent with the trend in 2007 and in line with earlier predictions, according to a recent report. But that pattern is unlikely to be repeated this year, with volumes in the first three months of 2009 down 50% on the quarterly average last year, according to the report authors.

“It’s not looking that rosy for 2009, but obviously as the economy picks up, you would expect the same for the markets,” said Milo Sjardin, head of North America for New Carbon Finance in New York, which co-authored the State of the Voluntary Carbon Markets 2009 report with Ecosystem Marketplace. More... 

Obama unveils plan to improve US fuel economy

Car companies with significant numbers of hybrids and electric cars, as well as parts manufacturers that can help create more fuel-efficient vehicles, are set to gain from US President Barack Obama’s new fuel efficiency policy, analysts and investors said.

Obama’s standards, which were announced on 19 May, aim to increase fuel economy and reduce greenhouse gas emissions from all new cars and trucks sold in the US. The standard will require an average fuel economy of 35.5 miles per gallon (mpg) in 2016, up from 25 mpg at present, and above the 35 mpg by 2020 mandated by the Corporate Average Fuel Economy law passed by Congress in 2007. More... 

PRI urges investors to step up on climate

Investors must not wait for policy-makers to encourage them to act on the threat of climate change, according to a report by an investor coalition.

The report, by the UN-backed Principles for Responsible Investment, argues global investors – particularly pension funds, which have a longer-term investment horizon than many investors – need to take more substantive action in the move towards a low-carbon economy. It also outlines best practice from across the investor spectrum. More... 

Econcern breakup imminent

Dutch renewable energy company Econcern is facing break-up, after seeking “suspension of payments” in late May, following the expiry of its financing facility on 1 April.

The company – which employs 1,200 people worldwide – obtained short-term bridging finance early in June, but is seeking to divest itself of potentially all of its joint ventures and operating companies. More... 

go to Features June 2009