Canada’s fire season erupts, sending harmful smoke into United States

Air quality alerts are in effect in Minnesota and Wisconsin — an unwelcome reminder of last summer, when Canadian wildfire smoke spread south.

By Ian Livingston, The Washington Post, May 13, 2024

Wildfires in Canada have roared back to life, sending harmful smoke into the northern United States — an unwelcome reminder of last summer’s historic fire season that also repeatedly sent plumes of noxious haze southward.

Almost a year to the date from the explosive start to the 2023 fire season, hundreds of fires have erupted in Canada, including a dozen major and out-of-control blazes. At least 500,000 acres (200,000 hectares) of land have burned so far, much of it in recent days.

Smoke from the blazes has led to air quality alerts for much of Alberta and its surrounding provinces, as well as Minnesota and Wisconsin. Edmonton was subjected to red-tinged skies and hazardous air quality over the weekend because of wildfires to its north.

International Falls, Minn., awoke Monday to air quality alerts, which expanded to cover a large portion of Minnesota and Wisconsin, including Minneapolis and Green Bay.

Wildfires roar to life

Even during winter, numerous blazes in Canada — known as “zombie fires” — smoldered beneath the snow. The combination of a warm and very dry winter set the stage for flames to quickly expand this spring.

Belts of extreme to exceptional drought are draped across the zone from central British Columbia to northern Alberta, where many of the worst fires rage. The majority of provincial land from Canada’s west coast to Ontario is experiencing at least moderate drought.

More than 100 fires were burning in British Columbia on Monday morning, and just shy of four dozen in Alberta. Other large blazes were scorching provinces to the east.

The largest uncontrolled fire was burning in the mining region of Manitoba near the border with Saskatchewan, about 400 miles north of the North Dakota border. It had grown to at least 86,000 acres (35,000 hectares) by early Sunday since igniting three days earlier. The fire led to evacuations in the town of Flin Flon and power cuts across the region.

Farther west, a blaze near Fort McMurray in Alberta’s wooded north was also out of control. The fire, about 225 miles from Edmonton, more than tripled in size from over the weekend, according to the Canadian Broadcasting Corp. An evacuation alert was in effect there for residents to be prepared to leave if necessary.

In adjacent eastern British Columbia, another out-of-control fire was threatening Fort Nelson in the Canadian Rockies about 650 miles north of Vancouver. Some residents of that area have also been urged to evacuate.

Smoky skies return downwind into United States

The worst of the smoke from these fires has been near the source in southwestern Canada. The air quality reached Code Purple — the most hazardous level — over the weekend in an area along the British Columbia-Alberta border region, according to the U.S. government’s AirNow pollution monitoring website.

Parts of northwest Minnesota saw air quality decline to Code Red on Sunday, signifying unhealthy levels of smoke pollution; this area even briefly experienced Code Purple conditions. Much of the northern Plains and the Upper Midwest, as well as adjacent Canadian prairies, have experienced at least Code Red levels.

Smaller quantities of smoke riding along the high-altitude winds of the jet stream even reached the East Coast of the United States over the weekend.

Over the next two to three days, hazy skies and the acrid smell of smoke should continue to spread across portions of Canada, the Upper Midwest and the Great Lakes. The smoke may sink southward into the eastern Plains and the Midwest at times on Tuesday.

Fires in Mexico also send smoke into the United States

It’s not just Canada that is sending smoke into the United States. Mexico is also contributing to hazy conditions because of rapidly spreading fires fueled by excessive heat and drought.

A large plume of smoke from Mexico is poised to spread over far-southern Texas, the southern Gulf states and Florida in the days to come.

Like Canada, large parts of Mexico are covered by the two most extreme levels of drought. Its drought has intensified extraordinary and persistent heat, as high as 123 degrees Fahrenheit (51 Celsius) in recent days — the hottest ever observed in May in the Northern Hemisphere, according to weather historian Maximiliano Herrera.

Human-caused climate change intensifies heat, droughts and fire intensity.

What’s next?

Unusually warm and dry conditions are predicted in British Columbia and Alberta into June, leading officials to warn of an elevated fire risk. A developing La Niña climate pattern may eventually offer more consistent rains late summer or fall reducing the threat somewhat.

More broadly, human-caused climate change will continue to elevate the fire risk in Canada because temperatures are climbing so fast in the region. The warming dries out the land surface and makes it more combustible.

Jason Samenow contributed to this report.

https://www.washingtonpost.com/weather/2024/05/13/canadian-wildfire-smoke-minnesota-wisconsin/

Here’s how EVs could get 200 miles per gallon

A new report says that electric vehicles could double in efficiency in the next decades — if automakers make the right moves

By Shannon Osaka, The Washington Post, April 10, 2024

When the Toyota Prius cruised into North America for the first time in the early aughts, drivers were shocked. At a time when the average sedan got just 23 miles per gallon (and the average passenger car just 20 miles per gallon), the Prius got 48. Thanks to regenerative braking and the little electric motor, its city mileage was better than its highway mileage.

That was then. Now, when it comes to miles per gallon, electric vehicles blow hybrid cars out of the water. The average electric car in the United States gets the equivalent of 106 miles per gallon. And, according to a new report, that number could more than double in the next decades, to the equivalent of more than 200 miles per gallon.

That growth in efficiency — possible with existing technologies — could help ease the strain that electric vehicles are expected to place on the grid, extend battery range and even limit the need for public car charging. With a concerted push, the U.S. transition to EVs could be made smoother and billions of dollars cheaper for consumers, experts argue.

Without it, the country could face increased electricity demand equivalent to about a quarter of all current U.S. electric power use.

“It’s like walking by money on the sidewalk,” said Luke Tonachel, a senior strategist at the Natural Resources Defense Council and one of the authors of the report released Wednesday by NRDC and the Electric Power Research Institute. “We’ll miss out on savings that are right there in front of us.”

The groups’ analysis finds that increasing the efficiency of EVs could cut energy consumption per mile in half by 2050 — and in so doing, reduce pressure on the grid by about half.

For decades, vehicles have been getting more efficient. In 1975, when fuel economy standards were first introduced in the United States, the average car or truck in the country got just 13 miles per gallon and belched pollutants that wafted into the atmosphere and people’s lungs. Now, the average car, truck or SUV gets around 27 miles per gallon — although the popularity of larger SUVs has slowed progress.

EVs change the calculus. Electric cars start with a huge advantage: They don’t create waste heat. In a gas car, only 16 to 25 percent of the fuel energy actually goes into the wheels — the rest is lost mostly in the form of heat and friction. In an electric car, on the other hand, 87 to 91 percent of the energy in the battery goes to power its wheels.

That’s why electric cars start with staggeringly high miles “per gallon,” in some cases over 100 miles per gallon equivalent. (Miles per gallon equivalent is a metric defined by the Environmental Protection Agency; a gallon of gas has about 115,000 BTUs of energy, or about 33.7 kilowatt-hours.)

Sandy Munro, an automotive engineer and the founder of the consulting firm Munro and Associates, says that EVs have the potential to make greater efficiency gains, but internal combustion engines do not. “We’ve wrung out the ICE vehicle as far as it can go,” he said.

Munro helped develop the gasoline Vulcan V6 engine, which, he says, dramatically lowered engine costs — but the engine is now basically obsolete.

“Now, it’s a boat anchor,” he said. “If I had one, I’d just throw it overboard.”

But even among EVs, there can be big variability in efficiency. While drivers of electric cars are more focused on range and the distance between charging stations, efficiency matters as well. The Ford F-150 Lightning, for example, gets just 70 miles per gallon equivalent, while Tesla Model 3 can get up to 142 MPGe. Even within cars of around the same weight and size, some EVs can be much more efficient than others.

In the new report, researchers found that a combination of increasing battery density, reducing tire rolling resistance, and cutting the weight of vehicles through high-strength steel or carbon fiber could double efficiency by 2050. As a guide, the study authors looked at the Mercedes EQXX, a concept car that recently drove the 627 miles from Riyadh, Saudi Arabia, to Dubai on a single charge.

The study modeled those improvements for passenger cars, SUVs and pickup trucks. The result, they projected, could be vehicles that got the equivalent of 277 miles per gallon by 2050, or more than 8 miles per kilowatt-hour. If those efficiency leaps happen, they could save $200 billion annually in electricity costs by 2050 and save more than 1,000 terawatt-hours in electricity demand, the researchers projected.

“If we want electric vehicles to succeed, if we can reduce the burden on the grid — that would be hugely beneficial,” said Marc Wiseman, the founder of Oberon Insights and a report co-author.

The question is whether automakers are planning to move toward that greater efficiency. Although the EPA requires EVs to have the same fuel economy stickers as gas-powered cars, experts say neither consumers nor automakers are looking closely at the efficiency of electric cars right now.

Frank Menchaca, president of SAE Sustainable Mobility Solutions, said that the shift to more efficient cars will depend on how quickly automakers can change their manufacturing to electric cars and secure supply chains, and how fast consumers adopt the vehicles. Automakers need to know that the transition is progressing, he said, to push for advanced efficiency.

But, he said, automakers will be motivated. “The more efficient the vehicle is, the more of a selling point it is,” Menchaca said.

Ultimately, some analysts say the United States may need to create specific fuel economy standards for electric vehicles. Now, fuel economy standards are largely targeted toward gas-powered cars — EVs help any company raise the average miles per gallon of its fleet.

“That’s a relic of a market dominated by gas vehicles,” Tonachel said. “But in the future, EVs will be the main market, and standards need to keep up with that reality.”

The EPA recently released new standards for emissions from tailpipes; the Transportation Department is expected to set new fuel economy standards in the next few months.

EV owners might not have as much motivation to push for greater efficiency because switching from gas already lowers their fuel costs so dramatically. But better efficiency could also mean Americans won’t need as many public chargers — one of the largest hurdles to U.S. adoption of electric transportation.

“The efficiency thing is a bit of a surprise — people think, ‘Oh we’re done,’ when you move to electric vehicles,” Wiseman said. “But you forget that there’s all these other benefits.”

https://www.washingtonpost.com/climate-solutions/2024/04/10/ev-efficiency-double-2050/

A Carbon Tax Is Back on the Table

The Trump tax cuts expire in 2025, which means things are about the get wacky in Washington.

By Matthew Zeitlin, Heatmap News, March 4, 2024

Climate policy has been all over the place lately thanks to pressure from interest groups, pre-election jitters, and the plausibility of a re-elected President Donald Trump laying waste to existing climate policy.

But further in the future, beyond the ups and downs of electoral politics, there’s a policy cataclysm coming that, some hope, could create an opening for that long sought, always denied dream of climate policy: the carbon tax.

Let’s back up. There are two things happening that might free up this policy space, one domestic, and the other overseas. At the end of 2025, much of the Tax Cuts and Jobs Act, otherwise known as the Trump tax cuts, will expire, including several provisions that many in Congress will want to extend, including lower income tax rates, a higher standard deduction and personal exemption, and an expanded child tax credit.

At the same time, much of the revenue that helped pay for those tax cuts — such as limitations on deductions for mortgage interest and state and local taxes — will also expire.

Measures that reduce taxes tend to be popular and those that raise them tend not to be, and that’s as true with the Trump tax cuts as with anything. (Since basically the day the TCJA passed, there’s been intense bipartisan opposition to the limitation on deductions for state and local taxes, for example.) That they’re expiring all at the same time will create a policy free for all.

And just as the Trump tax cuts expire, the European Union’s Carbon Border Adjustment Mechanism will come into full effect in January 2026, complementing its existing cap-and-trade and carbon pricing system. Essentially, CBAM is a tariff on imports from countries that don’t price carbon the same way the EU does, and it’s designed to prevent what’s known as “leakage,” where producers in countries with a carbon price simply offshore emissions-intensive production to countries that don’t. (It also helps make sure those products from other countries aren’t able to undercut domestic producers on price, a facet of the policy some have pooh-poohed as protectionist.)

Starting last year, EU trading partners had to begin reporting the carbon content of some emissions-intensive exports in preparations for payments starting in 2026. One of those trading partners is the United States, which exports some $351 billion worth of goods to the EU, second only to Canada.

Bills that would just address the carbon price gap have been proposed several times in the current Congress, including by climate stalwart and Democrat from Rhode Island, Senator Sheldon Whitehouse, plus some Republicans who think America should get an advantage over China for having a less carbon-intensive manufacturing sector.

This all creates a kind of celestial alignment in favor of a policy that has been rejected so many times (RIP the 2009 cap-and-trade bill and Bill Clinton’s BTU Tax) — or at least that’s what its advocates hope. Based on the history of carbon taxation and related polices, you might be pessimistic. But we haven’t seen a year like 2025.

“If you think about carbon price relative to raising people’s income taxes, when you put it in the whole fiscal conversation that’s going to happen in 2025, it’s going to look more attractive,” Catherine Wolfram, a Massachusetts Institute of Technology economist and former Treasury official in the Biden administration, told me. Wolfram was also one of the authors of a paper released last week by the Brookings Institution’s Hamilton Project mapping out how various climate policies could emerge from the witch’s brew of TCJA expiring and carbon tariffs would actually effect U.S. emissions.

The paper concluded that of the seven 2025 climate policy options they considered — including doing nothing to the IRA and enacting planned new emissions rules, doing nothing to the IRA with no new emissions rules, repealing the IRA, expanding the IRA tax credits for clean electricity, instituting a carbon fee starting at $15 a ton, instituting a clean electricity standard that would mandate a certain portion of electricity be produced from non-carbon-emitting sources with fees for noncompliance, and a carbon fee along with repealing some parts of the IRA — the carbon fee and the clean electricity standard would bring emissions down by the most, just missing the stated 2030 target.

And that’s just U.S. emissions. Wolfram said that if the U.S. were to institute a carbon fee, it would be a major step towards a worldwide carbon price, as countries would want to avoid paying fees to both the U.S. and Europe for pollution-intensive exports. “The more countries that get in this game,” Wolfram said, “the more powerful that policy can be.”

Whitehouse spoke at a Brookings event last week, saying, “We’ll find out a lot when people start getting tariffed through the European Union CBAM,” and that even Republicans were “pricing curious” due to the specter of carbon tariffs. “The forces are converging on making that work,” he added about the idea of finally getting a carbon price of our own.

Wolfram is also — cautiously — optimistic. “We haven’t tried since 2009. That’s 15 years ago,” she said. “The climate continues to change, and it’s changed pretty dramatically in the last 15 years. I don’t think we should have too many conclusions about what’s possible.”

https://heatmap.news/economy/carbon-tax-2025?_hsenc=p2ANqtz--Cd6pPOSdnwwnQVPMo5x8-K6hQpXijFYZ8tYtR2Orb0QMXIW7Bac3gfHCn3ktbVBsrjcrrCQgWiPM3RwRMPOdhqP9yN1luNsjUO2Tb2PSOBBBtJBw&campaign_id=54&emc=edit_clim_20240305&instance_id=116801&nl=climate-forward&regi_id=66704053&segment_id=159908&te=1&user_id=97eb24ff9121d1a70f01fac05f86ea1b&utm_campaign=Hot+News&utm_content=296871532&utm_medium=email&utm_source=hs_email#

Will America ever stop building more highways?

As emissions rise, some environmentalists are turning their attention to widening roads as well as pipelines

By Shannon Osaka, The Washington Post, Feb. 15, 2024

For decades, the United States has built and expanded a 220,000-mile network of state and interstate highways, easing cross-country travel while dividing cities and boosting suburban sprawl.

But as the planet warms, some activists are fighting back — citing the future emissions of adding lanes and the devastation faced by communities razed to make way for them. Their push against giant multilane highways represents an emerging frontier for the environmental movement, which has historically been more focused on fossil fuel projects than seven-lane roads.

“We don’t often think of it in those terms, but expanding highways is essentially like building new oil pipelines,” said Ben Crowther, the policy director for America Walks. “It increases emissions in the same way.”

Last week, a coalition of almost 200 groups called for a nationwide moratorium on expanding highways — citing their environmental harm and the forced relocation of nearby low-income communities of color. A new national group called the Freeway Fighters is uniting local ones under one umbrella, helping activists learn from each other on how to slow expansion — from an almost $10 billion project to widen Interstate 45 around downtown Houston to a plan to enlarge Interstate 5 around Portland, Ore.

It might seem to be an improbable fight for a country long known for its “love affair” with the car. But with the United States aiming to cut emissions to zero by 2050 — and less than 1 percent of cars on the road electric — activists say America’s main transportation system has to change.

Historically, much of America’s public money spent on transportation has gone to highways. In 2017, $177 billion in public money went to highways, according to the Congressional Budget Office, more than double the $75 billion spent on mass transit and rail infrastructure. Even now, with many of the nation’s highways in disrepair, about 20 to 30 percent of all public highway spending goes to expansion, rather than programs to fix and repair existing roads.

State and local transportation officials say highway expansions can help relieve traffic jams, improve road safety and boost economic development. If planned correctly, they also argue that such projects can boost bus movement and ride-sharing.

Jim Tymon, executive director of the American Association of State Highway and Transportation Officials, said in a statement that each state transportation department “uses a wide variety of strategies to advance safety, mobility, and access across the state and in every community.”

But experts argue that expansion projects do little to reduce traffic congestion — and add to the country’s climate problems. Almost 30 percent of U.S. carbon emissions come from transportation — most of it from cars and trucks. While interstate highways make up only around 1 percent of the nation’s roads, they carry around a quarter of its traffic.

“We continue to spend significant amounts of money at the federal level and at the state level expanding our highway networks,” said Tony Dutzik, a senior policy analyst with Frontier Group. “Given the climate issues that we are already facing — and the fact that we are already building out a massive highway network around the country — I think it’s legitimate to ask whether that’s the right set of priorities.”

One of the arguments against such expansions is the theory that adding more lanes just leads to more traffic — what economists call “induced demand.” Sitting in traffic on a highway during rush hour may seem like an advertisement for expanding the highway — after all, more lanes allow a greater flow of traffic. Under that logic, traffic operates a bit like water through a pipe: The larger the pipe, the more water can get through.

But economists and traffic engineers say that’s not a good analogy. When lanes are added to a highway — or any road, for that matter — more cars arrive to fill the available space. People might decide to drive more, or the expansion might further develop an area and encourage people to move in.

“Induced demand is just what happens when you increase supply,” said Matthew Turner, a professor of economics at Brown University. In 2009, Turner and his colleague Gilles Duranton published a paper showing that vehicle miles traveled in U.S. cities increased “in exact proportion” to highways. The result has since been replicated in Japan, China and many countries around the world, including in Europe. “It looks like this is a fact about the world,” Turner said.

Turner says that this doesn’t mean building a highway is always the wrong choice — but that building a highway to reduce congestion is not effective. “If you are trying to build to reduce road congestion, you should stop,” he said. “If you are trying to add road congestion to facilitate people moving around, that’s a whole different thing.”

But anti-highway activists say this link between bigger roads and more highway traffic — combined with the heavy pollution burden on communities — should take expansions off the table.

Some environmentalists also say they feel betrayed that the Biden administration is not spending all of the approximately $350 billion in highway funding in the Bipartisan Infrastructure Law on repairing existing highways.

According to the American Road and Transportation Builders Association, more than 20 percent of the funding, which is spread out over five years, so far has gone to expanding or widening roads. An additional 6 percent has funded new construction. According to the U.S. Public Interest Research Group, 17 of the 20 largest highway projects supported by the infrastructure law include expansions.

“This money could have been used to change the status quo,” Crowther of America Walks said. “Instead, we’ve seen a doubling down on new highway projects.”

“The Biden-Harris Administration has taken the strongest actions of any Administration in history to reduce carbon pollution in transportation,” Samantha Keitt, a spokesperson for the Federal Highway Administration, said in an email. She pointed to funding in the infrastructure law for electric buses, public transit, EV charging stations, and bicycle and pedestrian projects.

President Biden’s 2022 Inflation Reduction Act also included money to tear down highways that divided communities. But that program only has $1 billion in dedicated funds — a tiny sliver of the tens of billions of dollars going to expanding existing highways. The infrastructure law also included approximately $3 billion in a program that could remove roads dividing neighborhoods.

The Biden administration has encouraged the adoption of electric cars as a path to meeting climate goals. But it will be difficult to deploy EVs fast enough to completely remove emissions from transportation. According to one study in the journal Nature Climate Change, 90 percent of vehicles would need to be electric by 2050 to meet climate goals. And even if EV adoption accelerates dramatically, many gas-powered cars will still be on the road by mid-century.

Beyond the climate impact, activists argue that highways displace communities of color and expose neighborhoods to deadly air pollution. According to one analysis of data from the National Air Toxics Assessment, the risk of respiratory illness is 3.4 times higher for people living less than one mile from a highway than for those living more than 10 miles away.

“We’re thinking about air quality and what it does to people’s bodies,” said Ally Smither, a singer and an organizer for Stop TxDOT I-45, a group opposing the Houston highway expansion.

Coalitions resisting highway expansions can include a range of different groups — community efforts, environmental groups and other civic organizations. In the push to stop the widening of I-45, neighborhood groups are joined by public health advocates, bike organizations and the local chapter of the youth-led Sunrise Movement.

Kendra London, a Houston activist and the founder of Our Afrikan Family, learned about the expansion project four years ago. Since then, she has hosted community meetings and scheduled bike tours to show the houses and residents who will be displaced if the project, which is estimated to demolish over 1,000 homes, goes through. “We’re left out of too many vital conversations,” London said.

Activists have rallied hundreds of highway opponents at public meetings and protested outside of state transportation offices. Other groups file civil rights lawsuits or complaints under the National Environmental Policy Act, which triggers stringent reviews for many major projects.

“Turn out as many people as you possibly can and put up a show of force,” Crowther said.

Some states are challenging the status quo outright. The Colorado Department of Transportation has set strict emissions targets in response to a 2019 law. The new rules require the state to analyze how highway expansions would increase emissions — including induced demand — and offset those increases with transit, bike or pedestrian projects elsewhere.

Matt Frommer, a senior transportation associate at the Southwest Energy Efficiency Project, said the rules had helped block an expansion of Interstate 25 after the state realized that the project would exceed new pollution limits.

The state plans to spend some of the hundreds of millions of dollars saved on bus and transit projects.

https://www.washingtonpost.com/climate-solutions/2024/02/15/will-america-ever-stop-building-more-highways/

Insight: No global carbon price? Some companies set their own

By Ross Kerber, Simon Jessop and Peter Henderson

BOSTON/DUBAI/SAN FRANCISCO, Dec 11 (Reuters) - A growing list of global companies are setting a price or charging themselves for each metric ton of their carbon emissions, looking to shape their investments and business for future pollution taxes or other new climate rules.

Their prices are all over the place, from less than $1 per metric ton of carbon emissions to $1,600, the most of any company worldwide, set by California drugmaker Amgen.

Regulators, too, have offered a range of prices, including the Biden administration's "social cost," of carbon, around $200, and a suggestion from the International Monetary Fund that it should be at least $85 by 2030.

Incorporating the cost of carbon dioxide and other greenhouse gas emissions into business decisions has been a dream of climate activists for decades as a way to force corporations to cut emissions.

While a standardized global carbon price is not going to be set at the COP28 climate summit underway in Dubai, the concept has many uses in business such as enabling executives to charge their own divisions extra to use power from fossil fuels, thus making renewables more attractive.

"While there are other strategies to do so, failure to use this tool could imply that companies may be failing to adequately plan for the medium- to long-term realities of the cost of carbon," said Amir Sokolowski, global director for climate change at CDP.

An analysis by the non-profit for Reuters found that 20% of 5,345 global companies making climate-related disclosures said they used an internal carbon price last year, up from 17% the year before. Another 22% planned to do so in the next two years, although historically only a fraction of the companies that planned to implement one have done so.

The analysis from CDP, not previously published, reveals both that companies have embraced the new planning tool but also that much debate remains about what prices will spur significant action by companies to cut emissions.

Shown the trends, several analysts told Reuters the emerging picture is one of executives getting ready for some type of new emissions regulation even if they lack a clear sense of what's ahead.

Companies are "getting ready for the reality that it’s going to be required" said Columbia University economist Joseph Stiglitz. But the median prices are still too low to have a major impact on corporate decision-making, making the effort a "mixed bag", the Nobel Prize winner said.

Companies do not have a simple path to follow, since using a high carbon price can dramatically change investment plans, while using a low one can bring charges of "greenwashing."

Several executives who spoke with Reuters said internal pricing plans help them cut emissions and clarify the implications of capital spending and other business activities for the planet.

Market prices for carbon offsets can range from $5 to $1,500 a metric ton, said Joe Speicher, chief sustainability officer at software maker Autodesk (ADSK.O), opens new tab.

Autodesk has steadily raised its internal carbon price to $20. Ideally regulators would clarify how companies should treat emissions costs, Speicher said. "Wouldn't it be nice to have a public authority to help to create a more coherent market?" he said.

The company uses the price to help identify things like the value of its investments in carbon-removal projects, he said.

TYING IN TO MARKETS

Various carbon markets operate globally, including the European Trading System (ETS), where carbon currently trades around $70 per metric ton.

British Airways owner IAG in its CDP disclosure offered a range of internal carbon prices from 10 to 130 euros (about $11-$140) per metric ton that are used in connection with or to prepare for different regulations and agreements, including UK emissions targets and ETS compliance.

Different regulatory approaches have resulted in a range of prices around the globe, said IAG Sustainability Insights Manager Michael Evans.

The multitude of price by companies reflects many different factors, he said: "Variations in carbon prices can reflect wider economic outlooks, levels of financial investor interest, and even energy demand."

Many companies have designed their own internal mechanisms. When carmaker Volvo embraced internal carbon pricing, it could not find a good model to follow because "very, very few companies" used such prices throughout their business, Jonas Otterheim, Volvo's head of climate action, said in an interview.

Volvo has incorporated a "shadow price" of 1,000 krona per metric ton, about $92, in decisions ranging from which model vehicles to produce to what materials to use in factories. Adding the cost of carbon pollution to aluminum, for instance, made using aluminum created with renewable energy a "super high priority" because it has less than a quarter of the carbon emissions of typically made material, he said.

Similarly, Volvo reconsidered the real cost of its bigger cars as stricter EU rules come into effect.

The discussion "actually made us change the whole volume planning of the company to say that we should not prioritize some cars versus other even though they look more profitable, because they will actually sort of give us a penalty that other cars won't," Otterheim said.

Drugmaker Amgen assesses an "internal fee" of $1,000 per metric ton on higher-emitting projects. Proceeds are then used to fund emissions-cutting projects. For example, a utility expansion project in Ireland added $700,000 to its sustainability budget, a spokesperson said.

In its 2023 CDP climate report, Amgen said it also uses an "investment evaluator" to judge whether to buy new emissions-reduction equipment, using an even higher price for carbon.

"Sustainability projects that cost more than traditional projects but are less (than) $1,600 per (metric ton) of CO2e emissions reduced are considered reasonable for design," the report states. Amgen as a science-based company aims to be carbon-neutral within its own operations by 2027, the spokesperson said.

Several analysts who spoke with Reuters offered a range of views about what price companies should use.

Gunther Thallinger, a board member of German insurer Allianz and a member of a U.N. climate advisory council, said a comprehensive global carbon market would be "a massive boost" to efforts to cut emissions. But the current variation in prices is a problem, especially with some prices below $5 per metric ton.

"I fear this is going in the direction of greenwashing," he said.

However, Anita McBain, head of EMEA ESG Research for Citi, said practical uses matter more than high prices.

“We'd rather see a carbon price with teeth than one without. We'd rather see a $25 price that's actually influencing decisions versus a $75 price that's just a tick-the-box," she said.

https://www.reuters.com/sustainability/no-global-carbon-price-some-companies-set-their-own-2023-12-10/?utm_source=Sailthru&utm_medium=Newsletter&utm_campaign=Power-Up&utm_term=121123&user_email=4c48fcdbb12eee6826c7817244fc1960521df71996adb905afbfc4e36d0f936d

The problem with every country’s promise to phase out fossil fuels

Nobody is really planning for a fossil fuel phaseout

Analysis by Shannon Osaka, The Washington Post, Dec. 20, 2023

Last week, world leaders celebrated a climate first: a call by nearly 200 countries to “transition away” from fossil fuels. Many heralded the agreement as a new phase in climate talks and the beginning of the end of fossil fuels.

But beneath the U.N. agreement lies a darker truth: No fossil fuel company or country has a real plan for phasing out fossil fuels. On the contrary, almost all expect to continue extracting coal, oil and gas far into the future — far beyond what is needed to cut emissions in line with climate goals of keeping global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit), or even 2 degrees Celsius (3.6 degrees Fahrenheit).

And part of the reason is that almost every country and company sees itself in a unique position: as the future last producer of fossil fuels.

“Every country has their own reason why they should be the last,” said Michael Lazarus, a senior scientist at the Stockholm Environment Institute and one of the authors of the Production Gap Report, which analyzed countries’ plans for fossil fuel expansion.

In recent years, the gap between countries’ plans for fossil fuels — and the downward trajectory needed to hit climate goals — has become a yawning chasm. According to the Production Gap Report, a project of the U.N. Environment Program and research groups, countries’ projections and plans for fossil fuel production in 2030 are more than double the amount needed for a 1.5-degree Celsius warming limit.

The report analyzed fossil fuel production estimates from the governments of 20 large fossil fuel-producing countries, including the United States, Russia, Mexico and the United Arab Emirates. By 2050, the gap is projected to be even larger — according to the study, countries expect to produce 2½ times more fossil fuels in 2050 than would align with a target of 2 degrees Celsius.

At that threshold, scientists predict higher sea level rise, increased extreme heat and a greater possibility of crossing catastrophic tipping points than at 1.5.

“It’s a complete disconnect between what governments are planning for and what is required to meet Paris goals,” said Greg Muttitt, a senior associate at the International Institute for Sustainable Development.

Part of the reason for that disconnect, Lazarus said, is that many countries think they should keep producing fossil fuels while others stop. Norway, for example — which generates almost all of its electricity from renewables and has one of the highest percentages of electric vehicles in the world — touts the low carbon intensity of its oil and gas and argues that its exports are essential to Europe’s energy security.

Saudi Arabia and other Persian Gulf states argue that they can produce oil and gas at lower cost than their competitors; the United States plans for its emissions to be “abated” through carbon capture and storage so they won’t pollute the atmosphere.

The result is nations rushing to gain the upper hand and market share before the world turns more solidly toward renewables. “There’s a rush to produce while the social license remains somewhat intact,” Lazarus said.

And oil and gas companies are doing the same thing. While some are paying lip service to the idea of switching to renewables (largely European majors) or building out carbon capture and storage (largely U.S. majors), their investments in these areas are minuscule.

According to an analysis from the International Energy Agency, fewer than 3 percent of fossil fuel companies’ capital expenditures — the amount they spend on physical things — now fund clean energy. By 2050, the agency projects, 50 percent of those expenditures should support clean energy if the world hopes to hit its climate goals.

Carbon capture and storage faces similar headwinds. Each year the world captures only 45 million tons of the CO2 produced by fossil fuels — a rounding error compared with the over 36 billion tons of CO2 released into the atmosphere. And a lot of the CO2 that is captured ultimately goes into drilling for more oil.

But just like world leaders, many oil and gas companies seem to be betting they’ll survive beyond their peers. “Some oil companies thus seem to be planning to be among the last producers standing,” Jason Bordoff, the director of the Columbia University Center on Global Energy Policy, wrote recently.

Climate change has always been filled with contradictions — those who use the smallest amount of fossil fuels suffer the worst impacts, for example. But in recent years, the fossil fuel contradiction has become the largest of all. More than 2,000 fossil fuel lobbyists were estimated to attend the most recent climate summit in Dubai; this year, the United States is projected to extract more oil and gas than ever before and is currently producing more oil than any country in history.

“We can’t solve the climate crisis without solving the biggest cause of it, which is fossil fuels,” said Kelly Trout, the research co-director of Oil Change International.

But many countries appear to believe they can do just that.

https://www.washingtonpost.com/climate-environment/2023/12/20/fossil-fuel-companies-phase-out/